December 4, 2003


Gildan Activewear Announces Fourth Quarter and Full Year Sales and Earnings at Top End of Most Recent Guidance Range

Montreal, Thursday, December 4, 2003 - Gildan Activewear Inc. (NYSE: GIL; TSX: GIL.A) today announced its results for its fourth fiscal quarter and full year ended October 5, 2003. The Company also announced that it had adopted the U.S. dollar as both its financial reporting and functional currency with effect from the beginning of its 2004 fiscal year.

Fourth Quarter Earning

The Company reported net earnings of $19.8 million, or $0.66 per diluted share, compared with $19.6 million or $0.66 per diluted share in the fourth quarter of fiscal 2002. The Company's most recent fiscal 2003 guidance had reflected a range of $0.61-$0.66 for diluted EPS for the fourth quarter.

Compared to last year, the fourth quarter results reflected increased unit sales and higher gross margins, together with lower interest expense and a further reduction in the Company's effective tax rate. The positive impact of these factors was offset by lower selling prices and the weaker U.S. dollar, as well as higher depreciation as a result of the Company's recent major capital investment projects. The negative impact of the lower U.S. dollar on the Canadian dollar EPS for the quarter is estimated at approximately $0.15 per share. In U.S. dollars, net earnings for the fourth quarter amounted to U.S. $14.2 million, or U.S. $0.48 per diluted share, up respectively 11.8% and 11.6% from the fourth quarter of fiscal 2002.

Sales in the quarter were $150.8 million, down 5.7% from $159.9 million in the fourth quarter of fiscal 2002. The lower sales were due to lower selling prices and the significant decline in the value of the U.S. dollar, largely offset by a 10.1% increase in unit shipments. The higher unit sales reflected 10.4% growth in overall industry shipments of T-shirts in the U.S. wholesale distributor market combined with continuing market share increases achieved by Gildan, compared with the fourth quarter of last year. Gildan maintained its market leadership position in the overall T-shirt category, with a share of 29.6% versus 28.0% in the fourth quarter a year ago. Gildan continued to achieve significant penetration in the sport shirt segment. Although overall industry shipments in the sport shirt segment through the U.S. distributor channel declined by 12.6%, the Company's market share increased to 20.7% from 15.0% in the fourth quarter of fiscal 2002. Gildan's unit shipments in this category grew by 24.5% compared with the fourth quarter of last year. Gildan's share in the fleece category also increased significantly in the fourth quarter to 16.9%, compared with 11.7% a year ago, as the Company expanded its offering of fleece products. Industry demand in this segment increased by 11.8% versus the fourth quarter of last year. All U.S. market and market share data is based on the S.T.A.R.S. Report produced by ACNielsen Market Decisions. Unit shipments to Europe increased by 11.1% compared with the fourth quarter of last year.

Gross margins were 30.4% in the fourth quarter, compared with 28.1% in the fourth quarter of fiscal 2002. The increase in gross margins was primarily due to the significant impact of the Company's recent capital investments, in particular its new low-cost integrated textile manufacturing facility at Rio Nance, Honduras. The resulting reductions in manufacturing and transportation costs, combined with the impact of more favourable product-mix and lower raw material costs, were largely offset by lower selling prices.
The lower tax rate in the quarter compared with the fourth quarter of 2002 reflected the higher growth of sales to the U.S. and Europe compared with Canada, combined with a higher proportion of production from Honduras as the Company continued to ramp up the Rio Nance facility towards full capacity.

Full Year Earnings

Net earnings for the full year ended October 5, 2003 were a record $77.3 million or $2.60 per diluted share, up respectively 16.2% and 15.0% from $66.5 million or $2.26 per diluted share. The impact of the weaker U.S. dollar on full year earnings in fiscal 2003 compared with fiscal 2002 is estimated at approximately $0.65 per diluted share. In U.S. dollars, net earnings for fiscal 2003 were $53.2 million, or U.S. $1.79 per diluted share, up respectively 25.5% and 23.4% from fiscal 2002. Fiscal 2003 comprised of 53 weeks instead of the normal 52 weeks for a fiscal year due to the Company's floating year-end date. The extra week was included in the third quarter of fiscal 2003.

Functional Currency

The Company has historically measured and presented its financial statements in Canadian dollars. The Company has determined that it will adopt the U.S. dollar as both its financial reporting as well as its functional currency, with effect from the beginning of its 2004 fiscal year. The Company will continue to prepare its financial statements in accordance with Canadian GAAP. The decision to change functional and reporting currency reflects the high proportion of the Company's sales, costs, capital expenditures and long-term debt which are denominated in U.S. dollars. Consequently, the change in functional currency is expected to minimize the impact of fluctuations in foreign exchange rates on the Company's earnings. Historical financial information in U.S. dollars has been provided in the investor relations section of the Company's website, which can be accessed at

As a result of adopting the U.S. dollar as its functional currency, both Canadian and U.S. GAAP require that all opening assets and liabilities are translated into U.S. dollars at the exchange rate prevailing at the time of giving effect to the change in functional currency. Using the October 6, 2003 exchange rate, the translated value of opening inventories and fixed assets is approximately U.S. $23 million higher than the amount that would have resulted from the application of exchange rates prevailing at the dates these assets were manufactured or acquired. Accordingly, a one-time currency gain of U.S. $23 million resulting from the upward revaluation of inventories and fixed assets has been reflected directly in the balance sheet as part of a separate component of shareholders' equity. The increase in these opening asset values will have a corresponding offsetting negative impact on future earnings as opening inventories are consumed and fixed assets are depreciated. The upward revaluation of opening inventories will result in lower gross margins in the first half of fiscal 2004 only, as opening inventories are consumed in cost of sales, with an adverse effect on EPS in the first and second fiscal quarters of U.S. $0.06 and U.S. $0.04 respectively. Also, the significant increase in values for opening fixed assets in U.S. dollars will result in higher annual depreciation expense on an ongoing basis. In fiscal 2004, depreciation will be increased by U.S. $1.8 million after tax, or U.S. $0.06 per share. The combined impact of these factors will be to reduce EPS in fiscal 2004 by approximately U.S. $0.16 per share.


The Company is projecting a diluted EPS range of U.S. $2.25 - $2.30 for fiscal 2004, up 25.7% - 28.5% from fiscal 2003, before taking account the estimated U.S. $0.16 per share impact as a result of revaluing inventories and fixed assets. After reflecting the accounting changes resulting from the transition to U.S. functional currency, the Company expects to report diluted EPS for fiscal 2004 of U.S. $2.10 - $2.15, up 17.3% - 20.1% from fiscal 2003. These projections assume a 15% increase in unit sales volumes as well as a slight increase in selling prices in fiscal 2004 over fiscal 2003, to reflect partial pass-through of significantly higher cotton costs.

Cash Flow

In the fourth quarter, the Company generated $23.7 million of free cash flow, defined as cash flows from operating activities less cash used in investing activities. Free cash flow for the full fiscal year amounted to $31.5 million, after taking account of capital expenditures for the full year of $58.6 million. The Company ended the fiscal year with surplus cash reserves of $92.9 million.

As of November 30, 2003 there were 23,427,335 Class A subordinate shares and 6,094,000 Class B multiple voting shares issued and outstanding along with 837,309 options outstanding.


Gildan Activewear is a public, vertically-integrated manufacturer and marketer of premium quality branded basic activewear for sale principally in the wholesale imprinted activewear segment of the Canadian, U.S. and European apparel markets. The company manufactures and sells premium quality 100% cotton and 50% cotton/50% polyester T-shirts, placket collar sport shirts and sweatshirts in a variety of weights, sizes, colours and styles. The company sells its products as blanks, which are ultimately decorated with designs and logos for sale to consumers. Gildan employs more than 9,000 full-time employees.

(Unless otherwise indicated, all amounts are expressed in Canadian dollars.)

Certain statements included in this press release may constitute "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such forward- looking statements involve known and unknown risks, uncertainties and other factors which could cause actual results to differ materially from future results expressed or implied by such forward- looking statements. We refer you to the Company's filings with the U.S. Securities and Exchange Commission and Canadian securities regulatory authorities for a discussion of the various factors that may affect the Company's future results.

Information for shareholders

Gildan Activewear Inc. will hold a conference call to discuss these results today at 10:00 AM Eastern Time. Interested parties can join the call by dialling 1-800-474-8920. The conference call can also be accessed via live webcast at

If you are unable to call in at this time, a replay of the conference call will be available by dialling 1-888-203-1112 and entering passcode 296686, until December 11. Concurrently, the conference call will be available on the Investor Relations section of Gildan's website, for 30 days.

Investor inquiries :

Jessy Hayem, CFA

Vice-President, Head of Investor Relations

(514) 744-8511

Media inquiries :

Geneviève Gosselin

Director, Global Communications and Corporate Marketing

(514) 343-8814