Gildan Activewear Inc. Reports Decline in Q3 Profit, Exceeding Expectations
Earnings Performance: Gildan Activewear Inc. reported a profit of $120.2 million, or $0.80 per share, for the third quarter, a decrease from $131.5 million, or $0.82 per share, in the same period last year, but still beating analyst expectations.
Adjusted Earnings: Excluding special items, the company reported adjusted earnings of $148.8 million, or $1.00 per share, surpassing the average analyst estimate of $0.98 per share.
Revenue Growth: The company's revenue increased by 2.2% to $910.6 million compared to $891.1 million in the previous year.
Future Guidance: Gildan Activewear Inc. provided full-year EPS guidance in the range of $3.45 to $3.51.
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Reasons Behind Gildan Activewear's Stock Success on Tuesday
Analyst Price Target Increase: UBS analyst Jay Sole raised Gildan Activewear's price target by nearly 38% to $110 per share, maintaining a buy recommendation, which led to a nearly 6% stock price gain on the day of the announcement.
Impact of Acquisition: The price target increase is largely attributed to Gildan's recent acquisition of Hanesbrands, which is expected to enhance Gildan's market presence and visibility in retail.
Potential Financial Benefits: The acquisition may also allow Gildan to divest Hanesbrands's Australia business, potentially using the proceeds to reduce debt and consider share buybacks.
Stock Advisor Recommendations: Despite the positive outlook on Gildan, it was not included in the Motley Fool Stock Advisor's list of the 10 best stocks to buy currently, which have historically provided significant returns.
Gildin's HanesBrands Integration Under Scrutiny as Key Stakeholder Offloads 137,548 Shares
Ararat Capital Management's Stake Reduction: Connecticut-based Ararat Capital Management sold 137,548 shares of Gildan Activewear in Q3, reducing its position by approximately $4.9 million, leaving it with 217,685 shares valued at $12.6 million.
Gildan Activewear's Growth and Performance: Gildan's third-quarter revenue reached a record $911 million, although net earnings fell to $120.2 million, indicating cyclical challenges despite the company's recent acquisition of HanesBrands, which is expected to enhance its market position.
Strategic Recalibration: The reduction in Ararat's stake appears to be a strategic recalibration rather than a loss of confidence, as Gildan transitions into a larger global player with improved operational efficiencies and cost synergies from the HanesBrands acquisition.
Market Context: Gildan's shares have increased by about 17% over the past year, outperforming the S&P 500, which rose nearly 13%, reflecting a positive market sentiment towards the company's evolving business model.
What Impact Will HanesBrands' Acquisition Have on Gildan's Scale?
Acquisition Overview: Gildan Activewear Inc. has completed its acquisition of HanesBrands, significantly expanding its scale and brand portfolio, positioning itself as a major player in the global activewear and innerwear market.
Integration Strategy: The post-acquisition focus will be on a smooth integration process that aligns operations and systems, aiming for at least $200 million in annual cost synergies through enhanced efficiencies and improved supply chain management.
Financial Structure: The acquisition was financed through a combination of stock, cash, and loans, allowing Gildan to address HanesBrands' debt while avoiding over-leveraging its balance sheet.
Market Positioning: Gildan's strategy aims to leverage its low-cost manufacturing model alongside HanesBrands' premium brands to drive revenue growth and innovation, enhancing shareholder returns in a competitive market.
Gildan Completes HanesBrands Acquisition, Targeting $200 Million in Cost Synergies
- Scale Doubling: Gildan's acquisition of HanesBrands marks a significant scale increase, combining iconic brands with a low-cost, vertically integrated platform, thereby enhancing market competitiveness.
- Synergy Realization: The transaction is expected to generate at least $200 million in annual run-rate cost synergies, indicating the company's focus on improving operational efficiency and reducing costs during integration.
- Market Positioning: By integrating activewear and innerwear products, Gildan is positioned to better serve global customers, enhancing its influence in North America, Europe, and Asia-Pacific, which drives long-term sustainable growth.
- Innovation Engine: The acquisition will provide Gildan with a powerful engine for innovation, leveraging the strengths of both companies to drive new product development and market expansion, further solidifying its leadership in the global apparel industry.
Sandisk Replaces Interpublic in S&P 500 Index
- Index Changes: Sandisk Corp. will replace Interpublic Group in the S&P 500 on November 28, 2025, highlighting its growing significance and likely attracting increased investor attention.
- Acquisition Activity: Omnicom Group is acquiring Interpublic Group, with the deal expected to close soon, which may influence market perceptions and investment strategies in the advertising sector.
- Small Cap Adjustments: PTC Therapeutics will replace Sandisk in the S&P SmallCap 600, reflecting ongoing investor interest in the biotechnology sector and favoring emerging companies.
- Industry Restructuring: Upwork will replace Premier in the S&P SmallCap 600, indicating market recognition of flexible employment platforms and potentially driving further growth in related industries.
Sandisk Corp. Set to Take Over Interpublic Group of Companies in S&P 500 Index
S&P 500 Changes: Sandisk Corp. will replace The Interpublic Group in the S&P 500 due to Omnicom Group's acquisition of Interpublic, effective November 28.
S&P SmallCap 600 Adjustments: PTC Therapeutics will take Sandisk's place in the S&P SmallCap 600, while Upwork Inc. will replace Premier Inc., both effective November 28.
Further SmallCap Changes: First Interstate BancSystem will replace Hanesbrands in the S&P SmallCap 600, effective December 2, as Gildan Activewear acquires Hanesbrands.
Disclaimer: The views expressed in the article are those of the author and do not necessarily reflect the opinions of Nasdaq, Inc.
Reasons Behind Gildan Activewear's Stock Success on Tuesday
Analyst Price Target Increase: UBS analyst Jay Sole raised Gildan Activewear's price target by nearly 38% to $110 per share, maintaining a buy recommendation, which led to a nearly 6% stock price gain on the day of the announcement.
Impact of Acquisition: The price target increase is largely attributed to Gildan's recent acquisition of Hanesbrands, which is expected to enhance Gildan's market presence and visibility in retail.
Potential Financial Benefits: The acquisition may also allow Gildan to divest Hanesbrands's Australia business, potentially using the proceeds to reduce debt and consider share buybacks.
Stock Advisor Recommendations: Despite the positive outlook on Gildan, it was not included in the Motley Fool Stock Advisor's list of the 10 best stocks to buy currently, which have historically provided significant returns.
Gildin's HanesBrands Integration Under Scrutiny as Key Stakeholder Offloads 137,548 Shares
Ararat Capital Management's Stake Reduction: Connecticut-based Ararat Capital Management sold 137,548 shares of Gildan Activewear in Q3, reducing its position by approximately $4.9 million, leaving it with 217,685 shares valued at $12.6 million.
Gildan Activewear's Growth and Performance: Gildan's third-quarter revenue reached a record $911 million, although net earnings fell to $120.2 million, indicating cyclical challenges despite the company's recent acquisition of HanesBrands, which is expected to enhance its market position.
Strategic Recalibration: The reduction in Ararat's stake appears to be a strategic recalibration rather than a loss of confidence, as Gildan transitions into a larger global player with improved operational efficiencies and cost synergies from the HanesBrands acquisition.
Market Context: Gildan's shares have increased by about 17% over the past year, outperforming the S&P 500, which rose nearly 13%, reflecting a positive market sentiment towards the company's evolving business model.
What Impact Will HanesBrands' Acquisition Have on Gildan's Scale?
Acquisition Overview: Gildan Activewear Inc. has completed its acquisition of HanesBrands, significantly expanding its scale and brand portfolio, positioning itself as a major player in the global activewear and innerwear market.
Integration Strategy: The post-acquisition focus will be on a smooth integration process that aligns operations and systems, aiming for at least $200 million in annual cost synergies through enhanced efficiencies and improved supply chain management.
Financial Structure: The acquisition was financed through a combination of stock, cash, and loans, allowing Gildan to address HanesBrands' debt while avoiding over-leveraging its balance sheet.
Market Positioning: Gildan's strategy aims to leverage its low-cost manufacturing model alongside HanesBrands' premium brands to drive revenue growth and innovation, enhancing shareholder returns in a competitive market.
Gildan Completes HanesBrands Acquisition, Targeting $200 Million in Cost Synergies
- Scale Doubling: Gildan's acquisition of HanesBrands marks a significant scale increase, combining iconic brands with a low-cost, vertically integrated platform, thereby enhancing market competitiveness.
- Synergy Realization: The transaction is expected to generate at least $200 million in annual run-rate cost synergies, indicating the company's focus on improving operational efficiency and reducing costs during integration.
- Market Positioning: By integrating activewear and innerwear products, Gildan is positioned to better serve global customers, enhancing its influence in North America, Europe, and Asia-Pacific, which drives long-term sustainable growth.
- Innovation Engine: The acquisition will provide Gildan with a powerful engine for innovation, leveraging the strengths of both companies to drive new product development and market expansion, further solidifying its leadership in the global apparel industry.
Sandisk Replaces Interpublic in S&P 500 Index
- Index Changes: Sandisk Corp. will replace Interpublic Group in the S&P 500 on November 28, 2025, highlighting its growing significance and likely attracting increased investor attention.
- Acquisition Activity: Omnicom Group is acquiring Interpublic Group, with the deal expected to close soon, which may influence market perceptions and investment strategies in the advertising sector.
- Small Cap Adjustments: PTC Therapeutics will replace Sandisk in the S&P SmallCap 600, reflecting ongoing investor interest in the biotechnology sector and favoring emerging companies.
- Industry Restructuring: Upwork will replace Premier in the S&P SmallCap 600, indicating market recognition of flexible employment platforms and potentially driving further growth in related industries.
Sandisk Corp. Set to Take Over Interpublic Group of Companies in S&P 500 Index
S&P 500 Changes: Sandisk Corp. will replace The Interpublic Group in the S&P 500 due to Omnicom Group's acquisition of Interpublic, effective November 28.
S&P SmallCap 600 Adjustments: PTC Therapeutics will take Sandisk's place in the S&P SmallCap 600, while Upwork Inc. will replace Premier Inc., both effective November 28.
Further SmallCap Changes: First Interstate BancSystem will replace Hanesbrands in the S&P SmallCap 600, effective December 2, as Gildan Activewear acquires Hanesbrands.
Disclaimer: The views expressed in the article are those of the author and do not necessarily reflect the opinions of Nasdaq, Inc.
