Gildan Reports Record Third Quarter Revenue and Adjusted Diluted EPS Superscript 1 and Updates its Full Year 2025 Guidance
Executive Summary
- Gildan Activewear reported record Q3 2025 net sales of $911 M and adjusted diluted EPS of $1.00, beating prior‑year results.
- The company narrowed its 2025 adjusted diluted EPS guidance to $3.45–$3.51 and raised full‑year adjusted operating margin guidance by ~20 bps.
- Updated details on the definitive merger agreement with HanesBrands: equity consideration of 0.102 Gildan shares plus $0.80 cash per HanesBrands share (≈ $2.2 B equity value, $4.4 B enterprise value), expected close late‑2025/early‑2026.
Key Details
- Q3 2025 Operating Results
- Net sales: $910.6 M (+2.2% YoY) – Activewear $830.6 M (+5.4%), Hosiery & underwear $80.0 M (‑22.1%).
- Gross profit: $306.6 M (33.7% margin, +250 bps YoY).
- Adjusted operating income: $211.6 M (23.2% adjusted margin, +80 bps YoY).
- GAAP diluted EPS: $0.80 (‑2.4% YoY); Adjusted diluted EPS: $1.00 (+17.6% YoY).
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Net financial expenses rose to $43.7 M due to financing fees for the HanesBrands acquisition.
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Full‑Year 2025 Outlook (updated)
- Revenue growth: mid‑single digits (previous guidance unchanged).
- Adjusted operating margin: up ~70 bps vs prior guidance of +50 bps.
- Capital expenditures: ≈ 4% of sales (down from 5%).
- Adjusted diluted EPS: $3.45–$3.51 (up ~15‑17% YoY, narrowed from $3.40–$3.56).
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Free cash flow: projected ≈ $400 M (previously “above $450 M”).
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Merger Agreement with HanesBrands (announced Aug 13 2025)
- Consideration: 0.102 Gildan common shares + $0.80 cash per HanesBrands share.
- Equity value to HanesBrands shareholders: ≈ $2.2 B; enterprise value of combined entity: ≈ $4.4 B (based on Gildan closing price Aug 11 2025).
- Transaction approved by both boards; subject to shareholder approval and customary closing conditions.
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Expected close: late 2025 or early 2026.
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Financing Activity
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Private placement of senior unsecured notes – aggregate principal $1.2 B (two series) announced in Q3, proceeds earmarked for the HanesBrands acquisition, debt refinancing and transaction costs.
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Cash & Debt Position
- Net debt at quarter‑end: $1.741 B; net‑debt leverage ratio: 2.0× adjusted EBITDA (midpoint of target 1.5–2.5×).
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Free cash flow Q3: $200.4 M; YTD free cash flow: $188.9 M.
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Share Repurchase & Dividend
- NCIB expired Aug 8 2025; share repurchases paused pending leverage target.
- Quarterly dividend declared: $0.226 per share (payable Dec 15 2025).
Notable Quotes
“We were pleased with this quarter’s results… our low‑cost vertically integrated business model will be further enhanced by the added capabilities and reach introduced through the HanesBrands acquisition.” – Glenn J. Chamandy, President & CEO.