Our net loss for the first quarter was $0.38 per share compared with our December forecast of approximately $0.40 per share. Net selling prices for Printwear were slightly higher than projected in December, due to lower-than-projected promotional discounting in the month of December. The loss in the first quarter compared to adjusted net earnings of $0.30 per share in the first quarter of fiscal 2011. The first quarter loss was due to the following factors: Number one, we continued to consume inventories during the first quarter, which had been previously manufactured with peak cost cotton. Our average cotton cost during the first quarter was slightly more than double our cost of cotton in the first quarter of last year. The higher cotton cost in the quarter, compared to the first quarter of fiscal 2011, negatively impacted EPS by close to $0.45 a share.
The second factor was the selling prices in Printwear were reduced during the first quarter to align with current cotton futures, initially through short-term promotions and eventually through a formal reduction in gross selling prices, which was announced in early December. Selling prices in the Branded Apparel division, which have remained largely unchanged during the course of fiscal 2011, were increased at the end of the fiscal year in order to reflect current cotton future costs.
In anticipation of the above selling price reductions in Printwear, U.S. wholesale distributors delayed replenishment of their inventories and supply demand from screenprinters by defeating inventory levels. Distributors were able to operate with lower inventories in the first quarter, as the first quarter is the lowest seasonal quarter for Printwear sales. This destocking of distributor inventories resulted in close to a 40% reduction in Gildan's unit sales in the first quarter and was significantly more impactful than the 3.9% decline in screenprinter demand compared to the first quarter of last year.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV