Gildan Activewear, a Montreal-based clothing company, saw a drop in its shares before the opening bell in New York. The company revised its earnings and sales guidance for the full year, leading to a 5.8% decrease in premarket trading.
Revised Revenue and Earnings Forecast
Gildan Activewear now expects its revenue for the year to be between flat and down by low-single digits, compared to its previous projection of low-single-digit growth. Similarly, adjusted earnings are forecasted to be between $2.55 and $2.65 per share, including the impact of share buybacks in 2023. This is a downgrade from the record $3.11 per share earned last year.
Market Share Gains and Near-Term Uncertainty
Despite gaining market share and anticipating revenue growth in the second half of the year, Gildan Activewear acknowledges near-term uncertainty in the macroeconomic environment. Consumers are currently more focused on lower-priced products.
Second Quarter Performance
In the second quarter, Gildan Activewear reported net earnings of $155.3 million, or 87 cents per share, compared to $158.2 million, or 85 cents per share, in the previous year. Adjusted earnings per share fell slightly to 63 cents, surpassing the mean forecast of 61 cents by analysts polled by FactSet. Sales for the quarter were $840.4 million, exceeding market expectations of $818.6 million.
Share Buyback Program
Gildan Activewear has received approval from the Toronto Stock Exchange to renew its share buyback program. The program allows the company to repurchase up to about 5% of its outstanding shares.