Montreal - Gildan Activewear says it remains confident over the pace of the market recovery after reporting return to profit in its first quarter, boosted by a significant increase in sales across both its hosiery and activewear sectors.

Overall, net sales for the first quarter were $589.6 million, up 28.4 per cent compared to the first quarter of 2020, consisting of activewear sales of $484.6 million, up 30.1 per cent, and sales of $105.0 million in the hosiery and underwear category, up 21.4 per cent.

The increase in activewear sales was driven by double digit unit sales volume growth in North American and international imprintables markets and activewear sold in retail channels, as well as favourable product-mix, partly offset by lower net selling prices. Imprintables volume growth reflected the impact of net restocking by distributors and positive point-of-sales (POS) compared to the first quarter last year.

The increase in the hosiery and underwear category was driven by the strength of underwear sales which reflected strong double-digit volume growth over both the first quarters of 2020 and 2019.

Net earnings for the quarter were $98.5 million compared to a net loss of $99.3 million in the first quarter last year.

“Our first quarter results reflected a strong start to 2021 as continued benefits from our Back to Basics strategy supported sell-through across all channels and drove strong operating margin performance, allowing us to deliver net earnings significantly above prior year and first quarter 2019 levels,” said Gildan President and CEO, Glenn J. Chamandy. “While large events have not yet restarted, we continue to be encouraged by the strength of our imprintables business and on the retail side we were pleased with strong double-digit growth in underwear and activewear sales compared to the first quarters of 2020 and 2019.”

Gildan also noted that overall, Points of Sale in U.S. and international markets are currently down approximately 10 per cent compared to pre-pandemic 2019 levels. In retail, sales in all product categories are tracking above prior year levels. "Overall, we are encouraged by the economic recovery we are seeing related to continued re-openings, the impact of U.S. stimulus on consumer demand, and the strong progress of the vaccine rollout in the U.S," Gildan said. “However, large gatherings have not yet restarted and on the supply chain side we are monitoring labour shortages in the U.S. affecting certain industries, including yarn spinners, tightness in raw material inputs, as well as the impact of port backlogs and transportation-related factors globally.

"Consequently, we remain cautious regarding the pace of overall recovery. Nonetheless, we are confident that the combination of the steps we took during the crisis in 2020 and the strength of our Back to Basics strategy is positioning us well to capitalize on market share opportunities and create value for our shareholders over the long-term."