Gildan Activewear Inc. reported first‑quarter 2026 net sales of $1.17 billion, a 63.8% year‑over‑year increase that lifted the company to record revenue levels. The surge is largely attributable to the integration of HanesBrands, whose acquisition closed on December 1, 2025, and is expected to contribute roughly $200 million in incremental revenue during the quarter. Wholesale sales to distributors and screen printers fell 11.9% YoY, but the decline was offset by robust growth in retail channels, reflecting a shift in the company’s channel mix after the acquisition.
Adjusted gross profit reached $385 million, or 33.0% of net sales, an improvement of 180 basis points over the prior year. The margin expansion reflects a favorable pricing mix and cost efficiencies that have been realized as Gildan scales its operations and integrates HanesBrands’ supply chain. The company’s ability to maintain a higher gross margin despite the integration’s short‑term cost impact signals disciplined execution across the organization.
Adjusted operating income climbed to $167 million, translating to a 14.3% operating margin. The operating margin, while lower than the 19.0% margin reported in Q1 2025, is driven by the higher structural SG&A costs associated with the HanesBrands acquisition. The company’s operating leverage has been partially eroded by these costs, but the overall operating income growth demonstrates that revenue gains are translating into profitability gains.
GAAP diluted earnings per share were a loss of $0.30, while adjusted diluted EPS were $0.43, beating the consensus estimate of $0.3943 by 9.05%. The EPS beat is largely due to the company’s cost‑control initiatives and the pricing power it has gained through the expanded product portfolio. The adjusted EPS decline from $0.59 in Q1 2025 reflects the short‑term impact of integration initiatives that are expected to accelerate synergies captured in the coming quarters.
The company maintained its full‑year 2026 guidance and declared a quarterly dividend of $0.249 per share, payable on June 15, 2026 to shareholders of record on May 20, 2026. The acquisition of HanesBrands increased Gildan’s net debt to $4.87 billion, raising the net debt‑to‑EBITDA ratio to 3.3x, above the company’s target range of 1.5–2.5x, and has led to a pause in share buybacks. A recent U.S. Supreme Court ruling partially reduced tariff costs, providing a tailwind for the company’s cost structure.
"We are pleased with our first quarter performance, reflecting disciplined execution across the organization and continued progress against our strategic priorities. We advanced our integration initiatives as planned, with early actions reinforcing our operating model and strengthening our ability to drive efficiency and synergy capture," said President and CEO Glenn J. Chamandy. "We delivered record Q1 sales from continuing operations of nearly $1.2 billion, which were up 64% versus last year primarily due to the Hanes brand acquisition. We also reported adjusted diluted earnings per share from continuing operations of $0.43 compared to $0.59 in the first quarter of 2025, reflecting the short‑term impact of integration initiatives that we have put in place to accelerate synergies captured." "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."
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