Why Gildan Activewear (GIL) Stock Is Up On Friday

NEW YORK (TheStreet) -- Shares of Gildan Activewear (GIL) are up 5.08% to $54.39 today after the company released its 2014 second quarter earnings report.

The apparel company reported net earnings increased 8.9% to $79.2 million, or 64 cents per share, from $72.7 million, or 59 cents per share from the 2013 second quarter.

Gildan reported 2014 second quarter net sales were $548.8 million, a 4.9% increase from $523.0 million reported for the year ago quarter.

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TheStreet Ratings team rates GILDAN ACTIVEWEAR INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate GILDAN ACTIVEWEAR INC (GIL) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 27.67% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, GIL should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • GILDAN ACTIVEWEAR INC has improved earnings per share by 17.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. During the past fiscal year, GILDAN ACTIVEWEAR INC increased its bottom line by earning $2.61 versus $1.21 in the prior year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the Textiles, Apparel & Luxury Goods industry average, but is less than that of the S&P 500. The net income increased by 18.1% when compared to the same quarter one year prior, going from $35.29 million to $41.69 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 15.2%. Since the same quarter one year prior, revenues slightly increased by 7.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • GIL's debt-to-equity ratio is very low at 0.04 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.07, which illustrates the ability to avoid short-term cash problems.
  • You can view the full analysis from the report here: GIL Ratings Report
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