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Opinions Cole Kachur
Gildan Activewear Inc.GIL.TOCOMMENTOct 25, 2017
Stock price when the opinion was issued
As of Jun 19, 2026. Market Open.
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EPS of 74c beat estimates of 71c; revenue of $869M beat estimates by 3%. GIL actually lowered guidance but the stock rose anyway as the degree of adjustment was less than expected. RBC raised its target. EPS is now expected at the low end of the prior $2.55 to $2.65 range. Margins dipped, but this is a case of 'investors were expecting worse' and the stock has staged a very nice rally this week.
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GIL has performed well amid a challenging macro outlook, and is now trading at a 10.5x forward P/E. In the 4Q, GIL’s revenue declined 8% to $720M, missing estimates of $761M and EPS of $0.65 slightly missing estimates of $0.68.
GIL’s management expects margin pressure in the first part of 2023 but expects to deliver strong margin performance for the rest of the year.
The company has executed well on its long-term growth strategy by taking advantage of the vertically integrated models as a low-cost manufacturer to expand production to low-cost labour areas such as Bangladesh.
It does so while continuing to expand its margins and returns on net assets (RONA).
Overall, the company has been executing well on its growth plans, has been increasing dividends, and plans on repurchasing shares over the next few years.
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Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. EPS beat estimates by 16c at 76 cents. Revenues also beat estimates at $784M. Dividends were also raised 10%. Their stock buyback continues as well. Sales rose 14%, with free cash flow at $116M. Good results. Unlock Premium - Try 5i Free
Stockchase Insights
Ryan Modesto
Douglas Kee
Has a huge market share in the screen printing business in the US. A good track record and good history, but doesn’t see huge upside growth. Prefers something where you can get a higher return and better dividend.