For the quarter ended March 29, 2026, Gildan reported net sales from continuing operations of $1.17 billion, up 63.8 per cent year on year (YoY), in line with guidance. The surge was primarily attributed to the HanesBrands acquisition, partially offset by integration initiatives and a proactive reduction of inventory across customer channels.
Gildan Activewear Inc, a Canadian apparel manufacturer, posted record first-quarter net sales of $1.17 billion, rising 63.8 per cent YoY, driven by the full consolidation of HanesBrands.
Despite the revenue jump, Gildan reported a net loss of $55.1 million from continuing operations and an operating margin of negative 0.1 per cent.
Adjusted operating margin reached 14.3 per cent.
“We are pleased with our first quarter performance, reflecting disciplined execution across the organisation and continued progress against our strategic priorities,” said Glenn J Chamandy, president and CEO, Gildan Activewear Inc.
The net loss from continuing operations was $55.1 million, compared with net earnings of $84.7 million a year earlier, while adjusted net earnings from continuing operations stood at $80.1 million, down 10.9 per cent, Gildan said in a press release.
The operating loss was $1.3 million, with adjusted operating income at $166.8 million, up 23.1 per cent. The reported operating margin was negative 0.1 per cent, while the adjusted operating margin was 14.3 per cent, ahead of guidance.
Diluted loss per share from continuing operations was $0.30, and adjusted diluted earnings per share (EPS) from continuing operations were $0.43, down from $0.59 in Q1 2025. Gross profit reached $278.4 million, or 23.9 per cent of net sales, while adjusted gross profit was $384.7 million, or 33 per cent of net sales.
“We advanced our integration initiatives as planned, with early actions reinforcing our operating model and strengthening our ability to drive efficiency and synergy capture. While the external environment remains uncertain, we are focused on what we can control—driving operational excellence, advancing our integration of HanesBrands, maintaining cost discipline and consistent execution—all supported by our low-cost vertically integrated platform and strong balance sheet, which position us well to deliver on our strategic and financial objectives,” added Chamandy.
Cash flows used in operating activities totalled $279.5 million, with free cash flow at negative $309.9 million. Net debt at quarter-end was $4.87 billion, with a leverage ratio of 3.3 times trailing twelve months proforma adjusted earnings before interest, tax, depreciation and amortisation (EBITDA).
Retail channel and US region drive growth
Gildan’s revenue growth was led by the retail channel, where sales soared to $614 million from $85 million in the prior year, mainly due to the HanesBrands acquisition and higher selling prices. Wholesale sales declined 11.9 per cent to $552 million, reflecting a proactive inventory reduction and the non-recurrence of preemptive buying ahead of tariffs last year.
Regionally, the United States accounted for $1.07 billion of net sales, up 69 per cent year on year, while Canadian sales fell 10.7 per cent to $25 million and international sales rose 40.5 per cent to $72 million.
Margin analysis and integration impact
Gross margin declined to 23.9 per cent from 31.2 per cent a year earlier, while adjusted gross margin improved to 33.0 per cent, reflecting favourable pricing actions and the positive contribution from HanesBrands. Adjusted operating margin was 14.3 per cent, down 470 basis points YoY, mainly due to HanesBrands’ lower historical operating margins.
Selling, general and administrative (SG&A) expenses rose to $219 million, or 18.8 per cent of net sales, driven by the acquisition, though partially offset by realised synergies. Adjusted EBITDA reached $221.1 million, up 33.3 per cent from the prior year. The company incurred $61 million in restructuring and acquisition-related costs and $106.3 million related to the inventory fair value step-up from the HanesBrands acquisition.
Guidance and outlook
Gildan maintained its full-year 2026 guidance, projecting revenue of $6.0–$6.2 billion, an adjusted operating margin of approximately 20 per cent, and adjusted diluted EPS in the range of $4.20 to $4.40, representing 20–25 per cent growth year on year.
Capital expenditure is expected to be around 3 per cent of net sales, and free cash flow above $850 million. For the second quarter of 2026, net sales are forecast at approximately $1.6 billion, with an adjusted operating margin of 19.7 per cent.
The company continues to target $100 million in synergies for 2026 and $250 million in annual run-rate cost synergies over the next three years, supported by ongoing integration and optimisation of its vertically integrated manufacturing network.
Gildan said its outlook assumes no material deterioration in market conditions and continued successful execution of the HanesBrands integration plan, while remaining vigilant to evolving macroeconomic and geopolitical risks.
Fibre2Fashion News Desk
