The strategic rationale for the company’s investment in vertically integrated yarn spinning is to support its projected sales growth and to continue to pursue its business model of investing in global low cost manufacturing technology and in product technology which will provide consistent superior product quality.

The Montréal headquartered knitted apparel manufacturer is investing in ring-spun yarn technology which it says will provide enhanced quality features as well as qualify for duty-free access to U.S. markets under the CAFTA-DR trade agreement, which requires the use of U.S. yarn or yarn spun in other CAFTA-DR member countries. Ring-spun products will be utilized as part of the company’s branded product offering in its branded apparel business.

New branded apparel programs

Gildan also announced that it has been successful in securing important new branded programs for 2013 with national retail customers, as well as with regional retail chains, which will provide significant exposure and visibility for the Gildan brand.

The new programs include underwear, socks and active wear and are largely expected to begin shipment in the second half of fiscal 2013. The company is continuing to pursue other branded programs including further development of the Gildan brand and the Gold Toe portfolio of brands.

In addition, Gildan says it is continuing to pursue opportunities to continue to grow its sales of Under Armour and New Balance branded programs. In order to maximize the opportunity provided by the new branded programs, the company is making a significant investment in advertising in support of its Gildan and Gold Toe brands in fiscal 2013.

Record financial results

The news comes as Gildan announced record financial results for the fourth quarter of its 2012 fiscal year, and initiated earnings guidance for fiscal 2013 which continues the positive trends from the fourth quarter and reflects a projected strong recovery in annual net earnings compared to fiscal 2012.

Gildan reported net earnings of U.S. $89.0 million or U.S. $0.73 per share on a diluted basis for its fourth fiscal quarter ended September 30, 2012, compared with net earnings of U.S. $48.5 million or U.S. $0.40 per share in the fourth quarter of fiscal 2011.

The growth in the company’s net earnings in the fourth quarter compared to last year was due to the benefit of significantly lower cotton costs, higher Printwear unit sales volumes, more favourable product-mix and higher selling prices for Branded Apparel, and the initial accretion from the acquisition of Anvil Holdings Inc.

These positive factors were partially offset by lower net selling prices for Printwear, primarily reflecting the selling price reductions implemented in the first quarter of fiscal 2012, unfavourable Printwear product-mix, higher electricity, labour and other manufacturing input costs, the above-mentioned charge relating to the labelling issue, and higher income taxes due to the improved profitability of Branded Apparel.

Net sales in the fourth quarter amounted to U.S. $561.7 million, up 16.6% from U.S. $481.6 million in the fourth quarter of fiscal 2011, and in line with the company’s previous guidance of approximately U.S. $560 million.

Sales for the Printwear segment amounted to U.S. $376.8 million, up 7.5% from U.S. $350.5 million in the fourth quarter of fiscal 2011, and sales for the Branded Apparel segment were U.S. $184.8 million, up 41% from U.S. $131.1 million from the fourth quarter of last year.