MONTREAL—Gildan reports a dip in third-quarter sales for 2019. The company expects sales to be approximately $740 million, down 2% over the same quarter last year.
In its preliminary third-quarter results released on Oct. 17, the company attributes the drop in sales to “softness in international imprintable markets.”
“Specifically, in the U.S. imprintables channel, where the company was expecting low-single-digit growth in distributor point-of-sales (POS), actual POS during the third quarter was down high-single-digits compared to last year,” says Gildan in the report. “Further, in international imprintable markets where the company was forecasting growth, continued softness in Europe and China resulted in lower international sales for the quarter compared to last year.”
In light of the latest results, Gildan says it plans to revise its 2019 guidance to reflect the approximate $50 million sales shortfall for the quarter. The company says it predicts "the current demand weakness for imprintables both in North America and internationally will persist through the fourth quarter.” The company also says with” the downturn in demand, it projects “significantly” lower year-end distributor inventory levels than previously expected. Gildan says the current conditions reduce the sales projection for the fourth quarter by approximately $70 million, and the company "anticipates distributor inventory destocking will negatively impact sales by approximately $100 million.”
Elsewhere, some outlets report the earnings update caused a ripple effect with investors. The Winston-Salem Journal notes that the update “startled” some analysts and investors “in as much as a 34% plunge in its share price Friday.”
Gildan plans to report its full third-quarter results on Oct. 31.
See the preliminary results here.