Gildan Activewear's Q4 2024: Contradictions in Innovation, Margins, and Brand Strategy

These are the key contradictions discussed in Gildan Activewear's latest 2024Q4 earnings call, specifically including: Product Innovation and Market Share Gains, Gross Margin Expectations, Champion Brand Strategy, and Product Innovation Focus:



Record Revenue and Earnings Growth:
- Gildan Activewear reported record fourth quarter sales of $822 million, which were up 5% versus last year, and record revenues of about $3.3 billion for the year.
- The growth was driven by a strong performance in Activewear, increased sales volumes, and successful product innovations like soft cotton technology.

Operating Margin Improvement and Tax Impact:
- The company's adjusted operating margin for the fourth quarter was 21.3%, up 160 basis points year-over-year, with a gross margin of 30.8%, up 60 basis points.
- The improvement was due to lower raw material costs, although the adjusted effective income tax rate increased to 13.4% due to global minimum tax implementations in Canada and Barbados.

International Market Recovery:
- Sales in international markets increased by 20% year-over-year for the second consecutive quarter, driven by strong performance in Europe and improved product availability.
- This growth stemmed from improved in-stock levels supported by the company's global manufacturing footprint, which enhanced serviceability.

Capacity and Innovation Expansion:
- Gildan's new manufacturing complex in Bangladesh ramped up fully, supporting growth expectations and lowering the cost structure.
- The company's innovation pipeline is the largest in its history, with several new product launches expected in 2025, supporting market gains and product category expansion.