Gildan Activewear Inc., a Montreal-based company known for its popular brands Gildan and American Apparel, has reported a significant loss for the first quarter of 2020 due to the devastating impacts of the Covid-19 pandemic. The company announced a loss of $99.3 million, or $0.50 per diluted share, in comparison to net earnings of $22.7 million, or $0.11 per diluted share, during the same period last year.
The decline in sales affected all segments of Gildan’s business, resulting in a considerable decrease in revenue. The total sales for the first quarter amounted to $459.1 million, which is a 26.4% drop from $623.9 million in the previous year. Sales in the activewear segment decreased by 24.5% to $372.6 million, while the hosiery and underwear category experienced a decline of 33.7% to $86.5 million.
While Gildan had anticipated a decline in sales for the first quarter, the impact of the global health crisis far surpassed their expectations. CEO Glenn Chamandy recognized the unprecedented challenges brought about by the Covid-19 pandemic and emphasized the company’s commitment to supporting its stakeholders during this difficult time.
To mitigate the negative effects of the coronavirus, Gildan has implemented various proactive measures. These include suspending its quarterly cash dividend and share repurchases, accessing funds from its long-term bank credit facility, and reducing the salaries of senior staff by 25% to 35%. Chamandy and other top executives have voluntarily sacrificed 50% of their salaries since March 30th.
Due to the uncertainty surrounding the crisis, Gildan withdrew its financial guidance at the end of March. The company now expects to face a significant earnings loss in the second quarter. However, despite the challenges brought about by the pandemic, Gildan remains focused on its core strengths and aims to emerge from this crisis as a resilient and well-positioned company.
Link 1: For more information on Gildan Activewear Inc.’s financial performance and news updates, visit their official website: https://www.gildancorp.com/.
Link 2: If you’re interested in learning more about the impacts of the Covid-19 pandemic on the global economy, you can explore this insightful article by The Guardian: https://www.theguardian.com/business/2020/apr/14/global-economy-on-brink-of-recession-because-of-coronavirus-warns-imf.