TORONTO (Reuters) - Gildan Activewear Inc GIL.TO GIL.N said on Wednesday that its first-quarter profit beat its earlier forecasts, as the T-shirt maker’s sales surged on higher volumes and prices.
The company also raised its earnings-per-share outlook for the full year to a range of $1.85 to $1.90, from $1.85 earlier. It projected a second-quarter profit of 42 cents per share.
Gildan said it earned $27.5 million, or 23 cents per share, in the three months ended December 30. That was up from a profit of $15.6 million, or 13 cents per share, in the same period a year earlier. The results beat its forecast by 2 cents per share, it said.
It said revenue soared to $250.5 million from $185.8 million, thanks to much higher sales of socks because of Gildan’s earlier acquisition of V.I. Prewett & Son Inc. Volumes for its other products, as well as higher selling prices, also helped drive the top line.
Analysts had expected the Montreal-based company to earn 22 cents a share, on average, on sales of $241.7 million.
During the quarter, Gildan sealed its first underwear deal with a “U.S. national mass-market retailer,” it said. Shipments are expected to start in May.
It said gross margin rose to 31.5 percent from 29 percent a year earlier.
Gildan has closed a string of North American plants and moved production to lower-cost plants in Honduras and the Dominican Republic.
Analysts say a recently announced U.S. government plan to impose a duty on socks imported from Honduras should not hurt Gildan badly. The short-term tariff will apply only to cotton socks and run until the end of 2008.
Gildan released its results after markets closed. During the session, its shares fell 85 cents, to $35.46, on the Toronto Stock Exchange.
Reporting by Wojtek Dabrowski; Editing by Janet Guttsman