Ryland Conrad

Ryland Conrad asked about the assumed underlying margin expansion for the standalone Gildan business in 2026 and the contribution of Comfort Colors expanding into new categories to net sales guidance.

Answer

CFO Luca Barile explained that the 2026 adjusted operating margin of approximately 20% reflects the combined Gildan and Hanes profiles, sequential improvement, and continued drivers like Central American capacity optimization, yarn optimization, Bangladesh cost advantage, and SG&A discipline, plus synergies. President, Sales, Marketing and Distribution Chester Ward confirmed positive customer reception for Comfort Colors' expansion into accessories (hats, bags), with a muted contribution to the forecast in the early part of the year.

Ryland Conrad asked for details on the assumed underlying margin expansion for the standalone Gildan business within the 2026 operating margin guidance, including its puts and takes. He also inquired about initial customer conversations regarding Comfort Colors expanding into new categories and its contribution to net sales guidance.

Answer

Luca Barile, EVP and CFO, explained that the 20% adjusted operating margin guidance for 2026 reflects the combined Gildan and Hanes profiles, with sequential improvement driven by synergies and Gildan's core margin drivers like Central American capacity optimization, yarn optimization, and Bangladesh cost advantages. Chester Ward, EVP, Chief Commercial Officer, reported strong customer reception for Comfort Colors' expansion into accessories (hats and bags) at a recent show, confirming its contribution to the forecast, albeit muted initially, alongside other growing brands like ALLPRO and Champion.

Ryland Conrad inquired about Gildan's line of sight and visibility on incremental program wins in national accounts for 2026, specifically regarding the three-quarters of expected growth from new programs this year. He also asked about the year-to-date performance and underlying drivers of the Comfort Colors brand, and for additional details on plans to expand the brand into new product categories, including timing and expected benefits.

Answer

Chuck Ward (EVP and COO, Gildan Activewear) confirmed similar line of sight and percentages for growth from new programs in 2026 as seen in 2025. He stated that Comfort Colors is Gildan's fastest-growing brand with double-digit growth, performing strongly all year. He mentioned doubling manufacturing capacity for Comfort Colors and plans for further investment in 2026. Expansion into women's collections, caps, and bags is planned, with the expectation that these will be well-received and complement core products, maintaining the brand's cotton-based, pigment-dyed heritage.