(Reuters) - Canadian apparel maker Gildan Activewear Inc (GIL.TO) raised its full-year outlook, as it expects lower cotton prices and higher sales to boost revenue through the year, after reporting second-quarter results above analysts' estimates.
The company now expects full-year adjusted earnings of $2.65 to $2.70 per share — at the upper half of its previous guidance of $2.60 to $2.70 per share. It now expects revenue in excess of $2.15 billion, up from its prior forecast of $2.1 billion.
Gildan's net earnings rose to $72.3 million, or 59 cents per share, in the quarter ended March 31 from $26.9 million, or 22 cents per share, a year earlier.
Excluding items, the company earned 59 cents per share.
Analysts on average expected the company to earn 56 cents per share on a revenue of about $519.7, according to Thomson Reuters I/B/E/S.
Net sales rose 8.4 percent to $523 million, driven primarily by branded apparel business sales, which jumped 27.4 percent to $155 million. The branded business makes family apparel such as socks, underwear and activewear, primarily for U.S. retailers.
Revenue from Gildan's largest business, printwear, rose 2 percent to $368 million.
Gross margin expanded to 28.9 percent from 17.8 percent as average cotton price fell 11 percent to 83.45 cents per pound in the quarter.
The company, which holds the U.S. sock licenses for Under Armour Inc (UA.N) and New Balance, has been shifting away from the private label business, spending more to market its own brands such as Gildan and Gold Toe.
Gildan said it expects to earn between 92 cents and 95 cents per share, on an adjusted basis, in the third quarter.
Shares of the company closed at C$41.05 on the Toronto Stock Exchange on Wednesday.
Reporting by Krithika Krishnamurthy in Bangalore; Editing by Joyjeet Das