Gildan Reports Record Fourth Quarter Revenue and Adjusted Diluted EPS Superscript 1, Initiates Guidance for 2026, Provides Integration Update, Raises Targeted Run-Rate Synergies and Announces Plans to Build Bangladesh Phase 2

Executive Summary

• Record Q4 2025 net sales from continuing operations of $1.078 bn (+31.3% YoY) and full‑year sales of $3.619 bn (+11%).
• Adjusted diluted EPS for Q4 rose 15.7% to $0.96; full‑year adjusted diluted EPS up 17% to $3.51.
• Completed HanesBrands acquisition (Dec 1 2025); integration ahead of plan with revised run‑rate cost synergies target of ~$250 m over 2026‑2028 and a 10% dividend increase for 2026.

Key Details

• Financial Performance – Q4 2025
• Net sales (continuing): $1,078 million (+31.3%). Excluding Hanes contribution: +4.9%.
• Adjusted operating margin: 20.7% (vs. 21.3% prior).
• GAAP diluted EPS (cont.): $0.32 (‑62.8% YoY); adjusted diluted EPS: $0.96 (+15.7%).
• Operating income: $99 million (9.2% of sales); adjusted operating income: $223 million (20.7%).

• Cash flow from operations: $336 million (+59.8% YoY). Free cash flow: $304 million (+46.4%).

• Financial Performance – Full Year 2025

• Net sales (continuing): $3,619 million (+11%). Excluding Hanes contribution: +4%.
• Adjusted diluted EPS (cont.): $3.51 (+17% YoY). GAAP diluted EPS (cont.): $2.57 (+4.5%).
• Adjusted operating margin: 21.5% (up 20 bps).
• Operating income: $620 million (17.1% of sales); adjusted operating income: $779 million.

• Free cash flow: $493 million (+26.7%). Capital returned to shareholders: $319 million.

• Acquisition & Integration

• HanesBrands acquisition closed Dec 1 2025; integration ahead of schedule.
• Revised run‑rate cost synergies target: ~$250 m (≈$100 m in each of 2026‑27, ≥$50 m in 2028).

• Early‑2026 closure of two Hanes textile facilities to reallocate capacity; inventory reduction underway.

• Strategic Review – HanesBrands Australia (HAA)

• HAA classified as held for sale; formal sale process initiated.
• Expected 2026 net sales from HAA: ~$675 million; diluted EPS: $0.21.

• Proceeds to be used to reduce debt, moving leverage toward target range of 1.5‑2.5× net debt/adjusted EBITDA.

• 2026 Guidance (Excluding HAA)

• Revenue (continuing): $6.0 bn – $6.2 bn (≈65‑70% YoY growth).
• Adjusted diluted EPS: $4.20 – $4.40 (≈20‑25% YoY increase).
• Adjusted operating margin: ~20%.
• Capex: ≈3% of net sales.

• Free cash flow: >$850 million.

• Dividend & Share Repurchase

• Board approved a 10% dividend increase; quarterly dividend set at $0.249 per share (payable Apr 13 2026).

• NCIB paused until leverage returns to midpoint of target range; no repurchases planned until then.

• Capital Structure

• Net debt end‑2025: $4,417 million; net‑debt/adjusted EBITDA ratio: 3.0× (above target).

• Debt repayments include $2.32 bn Hanes debt and $115 mn term‑loan drawdown.

• Operational Highlights

• Activewear sales up 10.3% to $788 million; Innerwear sales surged 170.7% (driven by Hanes).
• International sales grew 5.1%; U.S. sales up 33.7%.

• New Bangladesh Phase‑2 textile facility planned, production start late‑2027; capex within guidance.

• Leadership & Organizational Changes

• Chuck Ward appointed EVP, Chief Commercial Officer (new commercial structure).
• Reporting to shift from “Activewear/Innerwear” to “Retail/Wholesale” beginning Q1 2026.

Notable Quotes

“Our results underscore the impressive execution by our global team whose focus is now on fully capturing the value of our expanded platform… we now expect to deliver higher than initially targeted run‑rate cost synergies reaching approximately $250 million by the end of 2028.” – Glenn J. Chamandy, President & CEO