UPDATE 2-Apparel maker Gildan's forecast misses as cotton costs stay high
By Sneha Banerjee
Nov 21 (Reuters) - Canadian clothing maker Gildan Activewear Inc forecast first-quarter profit below analysts' estimates, saying its cotton costs would remain high because it bought the raw material before prices declined.
Gildan shares fell as much as 5 percent on the Toronto Stock Exchange on Thursday, even though the company reported a 9 percent rise in fourth-quarter profit.
Cotton prices have fallen nearly 17 percent from a five-month peak of about 94 cents per pound in August.
Montreal-based Gildan, which supplies T-shirts and other basic clothing items to screen printers, said cotton costs in the first three quarters of 2014 would be higher from a year earlier.
The company told analysts on a post-earnings conference call on Thursday that it could not raise prices of its cotton clothing to pass on higher raw material costs.
Gildan, like other retailers, said demand would remain weak.
Retailers such as Macy's Inc, Wal-Mart Stores Inc and Best Buy Co Inc have responded to weak demand by offering big discounts even at the risk of a decline in margins. Continued...