• Q3 2019 sales of $740 million, down 2%, GAAP diluted EPS of $0.51 and adjusted diluted EPS¹ of $0.53 down 7% over prior year quarter
• Company announces move of textile and sewing production from Mexico to Central America and the Caribbean Basin, and evaluating full phase-out of direct ship-to-the piece imprintables business

Montreal, Thursday, October 31, 2019 – Gildan Activewear Inc. (GIL: TSX and NYSE) today announced its results for the third quarter ended September 29, 2019 in line with the preliminary results published on October 17, 2019.

Sales of $740 million in the quarter were down 2% compared to the prior year quarter mainly due to weak sales of activewear in the imprintables channel both in North America and internationally, combined with lower sock sales, including the exit of sock programs in mass, which largely offset strong sales of activewear to global lifestyle brands in the retail channel. The sales decline together with higher manufacturing costs, including anticipated higher raw material and other input costs, partially offset by lower selling, general and administrative expenses (SG&A), led to lower earnings for the quarter. GAAP diluted EPS totaled $0.51 and adjusted diluted EPS totaled $0.53 for the three months ended September 29, 2019, both down 7% over the prior year quarter.

While weaker imprintables order flow in North America and ongoing softness in international imprintables markets is currently dampening sales and earnings growth in 2019, we do not believe this reflects a structural change to our business as a leading supplier of basic replenishment apparel driven by our large scale, low-cost vertically-integrated manufacturing system. Further, our sales to retailers remains largely on track, particularly as we continue to leverage our position as a preferred supplier of private brands. We continue to remain focused on the execution of our supply chain initiatives aimed at driving increased operational efficiency across our manufacturing base and continue to expect benefits from these initiatives to materialize, translating to gross margin expansion as we move into 2020. As part of these initiatives, at the end of October, we decided to move forward with plans for the closure of our textile and sewing operations in Mexico and the relocation of the equipment at these facilities to our operations in Central America and the Caribbean Basin. We are also evaluating additional opportunities to reduce costs and enhance the execution of our growth drivers, including reducing complexity in certain areas of our business. In this regard, we are currently assessing fully phasing out of our direct ship-to-the-piece imprintables business. This would allow us to continue to focus on our distributor business, simplify our product offering, and reduce costs. Finally, we are pleased with the progress of our cost containment efforts related to SG&A infrastructure and continue to expect to deliver lower SG&A as a percentage of sales in 2019.

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