Gildan Activewear Acquired Alstyle Apparel

Yesterday’s Consumer Pops and Drops: LNCE, NKE, and FLO

(Continued from Prior Part)

Price movement

Gildan Activewear (GIL) has a market cap of $7.0 billion. It rose by 0.51% to close at $29.77 per share on May 26, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 3.6%, -5.2%, and 5.3%, respectively, on the same day.

This means that GIL is trading 0.24% below its 20-day moving average, 0.89% below its 50-day moving average, and 3.3% above its 200-day moving average.

Related ETFs and peers

The PowerShares FTSE RAFI Developed Markets ex-US Small-Mid Portfolio ETF (PDN) invests 0.13% of its holdings in Gildan. This ETF tracks a fundamentally weighted index of small-cap and midcap developed-market securities outside the US. The YTD price movement of PDN was 4.0% on May 26, 2016.

The FlexShares Morningstar Developed Markets Ex-US Factor Tilt ETF (TLTD) invests 0.05% of its holdings in Gildan. TLTD tracks an index of equities from developed countries outside the US. The index favors smaller, value-oriented firms.

The market caps of Gildan Activewear’s competitors are as follows:

• Hanesbrands (HBI) — $10.5 billion

• Ralph Lauren (RL) — $7.7 billion

Gildan Activewear acquired Alstyle Apparel

Gildan Activewear has completed the acquisition of Alstyle Apparel, LLC, effective May 26, 2016. The company acquired 100% of the equity interest in Alstyle Apparel and its subsidiaries.

Performance of Gildan Activewear in fiscal 1Q16

Gildan Activewear (GIL) reported fiscal 1Q16 net sales of $593.3 million, a fall of 6.7% from the net sales of $636.2 million in fiscal 1Q15. Sales from its Printwear and Branded Apparel segments fell by 9.1% and 1.8%, respectively, between fiscal 1Q15 and fiscal 1Q16.

Its adjusted net income and adjusted EPS (earnings per share) rose to $69.0 million and $0.28, respectively, in fiscal 1Q16, from $57.5 million and $0.24 in fiscal 1Q15. It reported adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $111.8 million in fiscal 1Q16, a rise of 21.3% compared with fiscal 1Q15.

Projections

Gildan Activewear (GIL) has made the following projections for fiscal 2016:

• consolidated net sales of more than $2.6 billion, which consist of printwear sales of more than $1.6 billion and branded apparel sales of more than $1.0 billion

• adjusted EPS of $1.50–$1.60

This guidance does not include the planned acquisition of Alstyle.

For ongoing analysis of this sector, please visit Market Realist’s Consumer Discretionary page.

Browse this series on Market Realist:

• Part 1 - Who Were the Outliers in the Consumer Space on May 26?

• Part 2 - KeyBanc Capital Rated Snyder’s-Lance as ‘Sector Weight’

• Part 3 - Nike Made Management Changes to Drive Innovation