Gildan Reports Record Fourth Quarter Revenue and Adjusted Diluted EPS¹ and Initiates Guidance for 2025

^{(all amounts are in U.S. dollars except where otherwise indicated)}

(1) Please refer to "Definition and reconciliation of non-GAAP financial measures" in this press release

• Record fourth quarter net sales of $822 million, up 5% vs. the prior year
• Fourth quarter operating margin of 21.8%, adjusted operating margin¹ of 21.3%
• Fourth quarter GAAP diluted EPS of $0.86 and record fourth quarter adjusted diluted EPS¹ of $0.83
• Cash flow from operations of $211 million in Q4 and $501 million for the full year; free cash flow¹ of $208 million in Q4 and $389 million for the full year
• Capital returned to shareholders of $246 million in Q4 and $889 million for the full year, through dividends and share repurchases
• Company announces 10% dividend increase for 2025
• Company initiates 2025 annual guidance

The Company's 40th anniversary year concluded on a high note with record revenue of $3,271 million, adjusted operating margin¹ of 21.3% and year over year adjusted diluted EPS¹ growth of 17%, fully in line with guidance provided. "This past year has been a testament to the collective strength and dedication of our global team, the loyalty of our customers, and the ongoing support and trust of our shareholders. Reflecting on our full-year performance, it's clear that our success has been driven by our unwavering focus on executing our GSG strategy. By reinforcing our core competencies as a low-cost, large-scale, vertically integrated sustainable manufacturer, we continued to enhance our competitive advantage, and we are well positioned for continued growth in the years ahead," said Glenn J. Chamandy, Gildan's President and CEO.

Fourth Quarter 2024 Results

Net sales were $822 million, up 5% over the prior year. Excluding the impact of the Under Armour phase-out, net sales were up low double digits. Activewear sales of $714 million, were up 11% driven by higher sales volumes. We saw positive POS across channels and product lines and continued to capture market share in key growth categories, with a strong market response to our recently introduced products which feature key innovations, including our new Soft Cotton Technology. Furthermore, we saw continued POS strength with National Account customers, driven by our competitive positioning and as we continue to benefit from recent changes in the industry landscape. International sales increased by 20% year over year. In addition to higher year over year sell-through in certain international markets, distributors continued to replenish inventory benefiting from our improved ability to service these markets through our global manufacturing footprint. In the Hosiery and underwear category, net sales were down 23% versus the prior year, in line with our expectations, mainly owing to the phase out of the Under Armour business. Excluding the impact of the Under Armour phase-out, sales for the Hosiery and underwear category were up high single digits in the fourth quarter.

We generated gross profit of $253 million, or 30.8% of sales, versus $237 million, or 30.2% in the prior year representing a 60-basis point improvement which was primarily driven by lower raw material costs.

SG&A expenses were $78 million compared to $88 million in the prior year. Adjusting for charges related to the proxy contest and leadership changes, adjusted SG&A¹ expenses were $78 million, or 9.5% of net sales, compared to $82 million or 10.5% of net sales for the same period last year. The year over year reduction reflected the positive benefit of the jobs credit introduced by Barbados partly offset by higher variable compensation expenses and higher distribution expenses.

The Company generated operating income of $179 million, or 21.8% of net sales including the positive impact from a $4 million restructuring and acquisition-related recovery. This compares to $178 million, or 22.8% of net sales last year, which included the favorable impact of a $41 million reversal of hosiery-related impairment charges partly offset by $11 million of restructuring and acquisition-related costs related to the closure of a yarn-spinning plant in the U.S. Adjusted operating income¹ was $175 million, or 21.3% of net sales, up $21 million or 160 basis points compared to the prior year.

Net financial expenses of $27 million, were up $6 million over the prior year due to higher interest rates and higher borrowing levels, with the Company repurchasing over 4 million shares in the quarter. As part of our ongoing strategy to optimize our capital structure, in the fourth quarter we completed our inaugural bond issuance in the principal amount of C$700 million in senior unsecured notes across two series. The majority of the net proceeds were used to repay outstanding debt under our credit facilities.

Reflecting the impact of the enactment of Global Minimum Tax (GMT) in Canada and Barbados, the Company's adjusted effective income tax rate¹ for the quarter was 13.4% versus 3.1% last year. After reflecting the positive benefit of a lower outstanding share base, GAAP diluted EPS were $0.86, down 3% versus the prior year, while adjusted diluted EPS¹ were $0.83 compared to $0.75 last year, up 11% year over year.

Full Year 2024 Results

For the year ended December 29, 2024, net sales were $3,271 million, up 2% versus the same period last year, in line with guidance. Excluding the impact of the Under Armour phase-out, which had minimal impact on profitability, net sales were up mid-single digits year over year. In Activewear, we generated sales of $2,831 million, up $163 million or 6%, driven by increased shipments. We saw positive POS trends in North America and observed strong momentum at National Account customers, which were partly offset by slightly lower net selling prices. Activewear sales also reflected market share gains in key growth categories, and a strong market response to our recently introduced products featuring key innovations. International sales of $252 million were up 12% versus last year, reflecting demand stabilization and some recovery in POS, as well as distributor inventory replenishment from previously suboptimal levels. In the Hosiery and underwear category, sales were down 17% versus the prior year mainly reflecting the phase out of the Under Armour business, less favourable mix and broader market weakness in the underwear category. Excluding the impact of the Under Armour phase-out, sales for the Hosiery and underwear category increased by mid-single digits year over year.

The Company generated gross profit of $1,004 million up $124 million versus the prior year, driven by the increase in sales and gross margin. Gross margin of 30.7%, was up by 320 basis points year over year mainly a result of lower raw material and manufacturing input costs, partly offset by slightly lower net selling prices.

SG&A expenses were $391 million, $60 million above prior year levels, mainly reflecting higher expenses related to the proxy contest, leadership changes and related matters which were $83 million in 2024 and $6 million in 2023. Excluding these charges, adjusted SG&A expenses¹ were $308 million, or 9.4% of net sales, compared to $324 million, or 10.1% of net sales last year, reflecting the benefit of the jobs credit introduced by Barbados in the second quarter of 2024, partly offset by higher variable compensation expenses and higher distribution expenses.

The Company generated operating income of $618 million, or 18.9% of net sales, reflecting the negative impact of the expenses for the proxy contest, leadership changes and other related matters. This compares to operating income of $644 million or 20.1% of net sales in 2023 which included the benefit of a $77 million net insurance gain, a $41 million non-cash reversal of a portion of a prior hosiery-related impairment charge, and a $25 million gain from the sale and leaseback of one of our U.S. distribution facilities, partly offset by restructuring costs of $46 million. Excluding these items, as well as the expenses for the proxy contest, leadership changes and other related matters in both years, adjusted operating income¹ was $696 million, up $143 million year over year. Adjusted operating margin¹ was 21.3% of net sales, up 400 basis points compared to the prior year, in line with guidance.

Net financial expenses of $104 million were up $24 million over the prior year due to higher interest rates and higher borrowing levels. As previously communicated, due to the enactment of GMT in Canada and Barbados, our income tax expenses were significantly higher than the prior year, with our full year adjusted effective income tax rate¹ increasing to approximately 17.2% from 4.4% last year. Reflecting the benefit of a lower outstanding share base, GAAP diluted EPS were $2.46, down 19% from $3.03 in the prior year. Adjusted diluted EPS¹ increased by 17% to $3.00 from $2.57 in the prior year and were fully in line with guidance.

Cash flows from operating activities totaled $501 million, compared to $547 million in the prior year, with both years impacted by the non-recurring items mentioned earlier. After accounting for lower capital expenditures totaling $150 million, and lower year over year proceeds from sale and leaseback, disposal of assets held for sale and other disposals, the Company generated approximately $389 million of free cash flow¹ essentially in line with the prior year. During 2024, the Company continued to execute on its capital allocation priorities returning a record $889 million to shareholders, including dividends and share repurchases of $756 million, or about 18 million shares under our normal course issuer bid (NCIB) representing about 11% of our public float. We ended the year with net debt¹ of $1,569 million and a leverage ratio of 1.9 times net debt to trailing twelve months adjusted EBITDA¹, well within our targeted debt range of 1.5x to 2.5x net debt to adjusted EBITDA¹.

Outlook

Over the past year, we have continued to make progress on key strategic initiatives, driving market share gains in key product categories, despite a mixed macroeconomic backdrop and soft demand in certain retail markets. Our vertically integrated model, operational excellence, and steadfast commitment to executing our Gildan Sustainable Growth (GSG) strategy across all three key pillars-capacity, innovation and ESG- position us well for 2025. Furthermore, with this strong foundation, a further strengthened competitive position and a disciplined approach to return capital to shareholders, we remain excited about our ability to drive performance and achieving the three-year objectives for the 2025 to 2027 period, put forth in August 2024. These objectives include, among others, net sales growth at a compound annual growth rate in the mid-single digit range and adjusted diluted EPS¹ growth at a compound annual growth rate in the mid-teen range.

For 2025, we expect the following:

• Revenue growth for the full year to be up mid-single digits;
• Full year adjusted operating margin¹ to be up approximately 50 basis points;
• Capex to come in at approximately 5% of sales;
• Adjusted diluted EPS¹ in the range of $3.38 to $3.58, up between ~13% and ~19% year over year;
• Free cash flow¹ to be above $450 million.
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• Our outlook reflects continued growth in key product categories partly driven by recently introduced innovation, overall POS growth, market share gains, the favorable impact from new program launches as well as some improvement in certain markets that remained soft in 2024.

• Ongoing benefits from the jobs credit program that took effect in Barbados in 2024.

• Following the implementation of the Global Minimum Tax legislation in Canada and Barbados, our effective tax rate for 2025 to remain at a similar level to 2024.
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• Continued share repurchases under our NCIB program, given the strength of our balance sheet, our expected strong free cash flow¹, and our leverage framework target of 1.5x to 2.5x net debt to adjusted EBITDA¹.

The above outlook for the full year and first quarter of 2025, as well as the three-year objectives, assume no meaningful deterioration from current market conditions including the pricing and inflationary environment, the absence of a significant shift in labour conditions or the competitive environment, and no meaningful deterioration in global trade and geopolitical environments, including as a result of changes to multilateral trade frameworks. They reflect reasonable industry growth and expected market share gains. They also assume the continued benefit from the jobs credits in Barbados. In addition, they reflect Gildan's expectations as of February 19, 2025, and are subject to significant risks and business uncertainties, including those factors described under "Forward-Looking Statements” in this press release and the annual MD&A for the year ended December 29, 2024.

Executive Leadership Changes Including CFO Transition

In a separate press release issued concurrently today, the Company announced the following executive leadership nominations and a CFO transition as part of a multi-year succession planning process, which are intended to ensure strong continuity as the Company drives forward with the Gildan Sustainable Growth Strategy:

• Chuck Ward, currently President, Sales, Marketing and Distribution, has been appointed to the newly created role of Executive Vice President, Chief Operating Officer (EVP and COO) effective March 1, 2025.
• Rhodri (Rhod) J. Harries, EVP, Chief Financial and Administrative Officer, will retire on January 1, 2026.
• Luca Barile, currently CFO, Sales, Marketing and Distribution, to succeed Rhod as EVP, Chief Financial Officer as of March 1, 2025.

As recently announced in January 2025, the Company was included on the Dow Jones Best-in-Class North America Index (formerly the Dow Jones Sustainability™ North America Index) for its ongoing efforts towards ESG initiatives, marking its 12th consecutive year of inclusion in this index. More recently, Gildan was also included in the 2025 Sustainability Yearbook for the 13th consecutive year based on S&P Global's Corporate Sustainability Assessment for its demonstrated sustainability practices.

Increase in Quarterly Dividend

On February 18, 2025, the Board of Directors approved a 10% increase in the amount of the current quarterly dividend and has declared a cash dividend of $0.226 per share, payable on April 7, 2025, to shareholders of record on March 12, 2025. This dividend is an "eligible dividend” for the purposes of the Income Tax Act (Canada) and any other applicable provincial legislation pertaining to eligible dividends.

Normal Course Issuer Bid

During the fourth quarter, the Company completed share repurchases under its NCIB ending August 8, 2025. A total of 4.4 million common shares were repurchased for cancellation during the fourth quarter at a total cost of approximately $214 million (including $4.3 million of taxes on share repurchases). Under its current normal course issuer bid ("NCIB") that commenced on August 9, 2024, and will end on August 8, 2025, Gildan is authorized to repurchase for cancellation up to 16,106,155 common shares, representing approximately 10% of Gildan's "public float” (as such term is defined in the TSX Company Manual) as of July 26, 2024. The NCIB is conducted by means of purchases through the facilities of the TSX and the NYSE and through alternative Canadian trading systems. During the period from August 9, 2024 to February 19, 2025, Gildan purchased for cancellation a total of 9.9 million common shares, representing 6.7% of the Company's issued and outstanding common shares as at July 26, 2024. Gildan's management and the Board of Directors believe the repurchase of common shares represents an appropriate use of Gildan's financial resources and that share repurchases under the NCIB will not preclude Gildan from continuing to pursue organic growth and complementary acquisitions.

Disclosure of Outstanding Share Data

As at February 17, 2025, there were 151,851,182 common shares issued and outstanding along with 282,737 stock options and 1,568,820 dilutive restricted share units (Treasury RSUs) outstanding. Each stock option entitles the holder to purchase one common share at the end of the vesting period at a predetermined option price. Each Treasury RSU entitles the holder to receive one common share from treasury at the end of the vesting period, without any monetary consideration being paid to the Company.

Conference Call Information

Gildan Activewear Inc. will hold a conference call to discuss fourth quarter and full year 2024 results and its business outlook today at 8:30 AM ET. A live audio webcast of the conference call, as well as a replay, will be available on Gildan's company website at the following link: http://www.gildancorp.com/events. The conference call can be accessed by dialing toll-free (800) 715-9871 (Canada & U.S.) or (646) 307-1963 (international) and entering passcode 3105768. A replay will be available for 7 days starting at 11:30 AM ET by dialing toll-free (800) 770-2030 (Canada & U.S.) or (609) 800-9909 (international) and entering the same passcode.

Notes

This release should be read in conjunction with the attached unaudited condensed financial statements as at and for the three and twelve months ended December 29, 2024, and Gildan's Management's Discussion and Analysis and its audited consolidated financial statements for the fiscal year ended December 29, 2024 which will be filed by Gildan with the Canadian securities regulatory authorities and with the U.S. Securities and Exchange Commission and will also be provided on Gildan's website. Gildan has filed its annual report on Form 40-F for the year ended December 29, 2024 with the SEC. The Form 40-F, including the audited combined financial statements, included therein, is available at https://gildancorp.com/en/ and on EDGAR at http://www.sec.gov. Hard copies of the audited combined financial statements are available free of charge on request by calling (514) 744-8515.

Certain minor rounding variances may exist between the condensed consolidated financial statements and the table summaries contained in this press release.