Gildan Activewear Inc. Q1 FY2026 earnings call

• Pleased with Q1 performance, reflecting discipline and execution. • Progressing well with Hanes acquisition integration, relocating textile production volumes. • Confident in attaining ~$250 million run rate cost synergies over 3 years, including ~$100 million in 2026. • Navigated uncertain external environment, good visibility on 2026 input costs. • Enhancing distribution network and standardizing IT systems. • Maintaining guidance for 2026 and 2026-28 objectives.

Record Q1 sales from continuing operations of nearly $1.2 billion, up 64% vs last year due to Hanes brand acquisition. Wholesale net sales $552 million vs $626 million prior year; retail net sales $614 million vs $85 million prior year. Gross profit $278 million (23.9% of net sales) vs $222 million (31.2%) prior year. Adjusted gross profit $385 million (33% of net sales) vs 31.2% prior year. SG&A expenses $219 million vs $87 million prior year. Adjusted operating income $167 million, up 31 million year-over-year. Adjusted operating margin 14.3% of net sales, down 470 basis points vs last year.

• 2026 revenue $6 billion to $6.2 billion. • Full year adjusted operating margin ~20%. • CapEx ~3% of net sales. • Adjusted diluted EPS $4.20 to $4.40 (20%-25% y-o-y increase). • Free cash flow above $850 million. • Q2 net sales from continuing operations ~$1.6 billion, adjusted operating margin ~19.7%.

• Uncertain external environment, especially Middle East situation. • Potential deterioration in Bangladesh operations, but contingency plans in place. • Higher borrowing levels related to Haynes Brands acquisition impacting financial expenses.

Q: Review point of sale for Gildan Printware and Hanes business in Q2 and strategy evolution.

A: Chuck and others discussed market performance, share gain in wholesale and retail, and integration to leverage innovation.

Q: Clarify Bangladesh facility operation and gross margin/SG&A targets.

A: Bangladesh facility running normally, contingency plan in place. Guidance on adjusted operating margin and sequential improvement in margins explained.

Q: Optimization of Haines facility integration and major synergies buckets.

A: Integration advancing, bulk volume produced in Gildan's world, major synergies in supply chain and cost control.

Q: Quantify Q1 synergies and inventory reduction impact.

A: Well on track for $100 million 2026 synergies, inventory reduction impact on sales explained.

Q: Demand environment and growth assumption.

A: Believed flat to low single-digit growth assumption still valid, outperforming market in certain areas.

Q: Market share gain in underwear and activewear.

A: Explained factors driving share gain in underwear and progress in activewear development.

Q: Pricing strategy for rising input costs.

A: Hedging energy and other inputs, good visibility, and history of passing on costs.

Q: Printware market distributor network and end market shifts.

A: Market consolidated, customers cautiously optimistic, shift to higher value products.

Q: Bangladesh expansion and contingency plans.

A: Expansion on pace, contingency plans for energy and other disruptions.

Q: Gildan business sensitivity to confidence levels and outlook.

A: Cautiously optimistic, continuing to take market share with new products.

Q: Normalized organic growth profile for wholesale and retail channels.

A: Both channels showing growth, underlying strength supports 3%-5% CAGR.

Q: Leverage expectations and buyback timeline.

A: Targeting working capital reduction, aiming to return to leverage framework and restart buyback.