Chris Li

Chris Li asked about sequential improvement in industry demand for wholesale and retail channels in Q4 and the outlook for 2026 industry demand. He also inquired if Gildan would consider divesting the underperforming Hanes US intimate business.

Answer

President, Sales, Marketing and Distribution Chester Ward noted that the Q4 market was 'okay' in dollar terms but units were slightly down, with growth driven by higher-value products. For 2026, he expects flat to low single-digit growth plus new programs. CEO Glenn Chamandy stated that Gildan is not considering divesting the US intimate business, aiming instead to stabilize and improve margins.

Chris Li asked about sequential improvements in industry demand for both wholesale and retail channels in Q4 and Gildan's outlook for industry demand underpinning its 2026 guidance. He also inquired if the underperforming Hanes US intimate business might be considered for divestment.

Answer

Chester Ward, EVP, Chief Commercial Officer, noted that the Q4 market was 'okay' in dollar terms but units were slightly down, with growth driven by higher-value products. For 2026, he expects flat to low single-digit market growth, supplemented by new programs and product expansions. Glenn Chamandy, President and CEO, stated that the Hanes US intimate business is not currently considered for divestment, as it's believed to have troughed, with plans to stabilize and improve margins.

Chris Li followed up on the competitive landscape, asking if Gildan had seen a widening of its price gap versus competitors due to its low-cost advantage, and if this was contributing to market share gains. He also asked Luca Barile about the higher SG&A expense in Q3, requesting a breakdown of the variable compensation component and whether a 10% of sales rate is a good target for next year.

Answer

Glenn Chamandy (President and CEO, Gildan Activewear) clarified that Gildan took price increases equal to tariff impacts in stages, and the market followed, maintaining consistent pricing relationships. He stated that Gildan is the price leader. Luca Barile (EVP and CFO, Gildan Activewear) attributed the slightly higher Q3 SG&A to higher variable compensation and one-time IT-related expenses. He confirmed that SG&A is always targeted around 10% of sales for the current year and pointed to the overall combined entity guidance for next year.

Chris Li of Desjardins Group posed a hypothetical question about Gildan's response if Bangladesh tariffs were to increase significantly. He also asked for the key variables differentiating the low and high ends of the updated EPS guidance.

Answer

President & CEO Glenn Chamandy explained that the company has significant operational flexibility to mitigate tariff impacts, including shifting production destinations and leveraging U.S. cotton. EVP & CFO Luca Barile stated the EPS guidance range reflects market uncertainty. The high end assumes stronger share gains and a quicker demand recovery, while the low end accounts for the risk of a broader slowdown.