Gildan Activewear's CEO Discusses Q2 2011 Results - Earnings Call Transcript

Joining me here this morning are Glenn Chamandy, our President and Chief Executive Officer; and Laurence Sellyn, our Executive Vice President and Chief Financial and Administrative Officer. Laurence will provide a brief overview of our second quarter financial results and our business outlook. After which, we will open the call to questions.

Before we begin, let me remind everyone that certain statements included in this conference call may constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve unknown and known risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. We refer you to the company’s filings with the U.S. Securities and Exchange Commission and Canadian Securities Regulatory authority that may affect the company’s future results.

I would now like to turn the call over to Laurence.

Laurence Sellyn

Good morning. This morning, we reported our fifth consecutive quarter of record quarterly results. In addition, we substantially increased our earnings guidance for the full fiscal year in spite of significantly higher cotton cost in the second half of the fiscal year compared to the first six months.

Sales for the second quarter were $383 million, up 17.3% from $327 million in the second quarter last year. EPS before restructuring charges was $0.53, a record for the second quarter of our fiscal year and up 29% from $0.41 per share in the second quarter of fiscal 2010. The growth in sales revenues was primarily due to the impact of higher net selling prices for activewear, which increased by close to 20% as a result of successive selling price increases and lower promotional activity.

In addition, unit sales volumes for activewear and underwear increased by 6% in spite of continuing low finished goods inventory and capacity constraints, which prevented the company from maximizing its market share and fully servicing distributor demand to replenish inventories.

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