2024 Annual Report
2024 Annual Report
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MESSAGE
FROM THE CHAIR
OF THE BOARD &
THE PRESIDENT
AND CEO
Dear Shareholders,
Reflecting back on fiscal 2024 and looking ahead, we
take great pride in the Company’s achievements and
the strong foundation we have built to seize the exciting
opportunities before us. We remain deeply committed
to delivering long-term value for the Company and you,
our shareholders.
First and foremost, we extend our heartfelt gratitude for
your trust and support, particularly through the proxy
contest. We were pleased to welcome your newly elected
Board of Directors, bringing together a dynamic blend
of backgrounds, skills, and perspectives. With renewed
purpose, confidence, and commitment towards a vision for
the Company that is aligned with the long-term interests
of our shareholders and other stakeholders, Gildan’s
Board and leadership team are well-positioned to guide
the Company into the future and it is with this resolve
that we address this letter to you.
A TRANSFORMATIVE YEAR MARKED BY
SIGNIFICANT MILESTONES
In 2024, we proudly celebrated our 40th anniversary—four
decades of growth, innovation, and a steadfast com-
mitment to “Making Apparel Better,” with our success
measured not only by our financial performance but also
by the positive impact we have made in our communities
and through our forward-thinking environmental initiatives.
Our three-year plan, which centered on Gildan’s Sustain-
able Growth (GSG) strategy, culminated in 2024 full year
record sales of $3.27 billion, earnings per share (EPS)
of $2.46 and adjusted EPS¹ of $3.00—up 17% over last
year— all while successfully navigating a complex global
macroeconomic environment. By executing on the key
pillars of our strategy, we generated more profitable
growth, achieving operating margins of 18.9% and adjust-
ed operating margins¹ of 21.3%, surpassing our original
target range of 18% to 20% and in line with our revised
2024 target to be slightly above 21%. In addition, our
strong operating performance yielded continued robust
free cash flow¹ generation of $389 million for the year,
which is a hallmark of Gildan’s business model.
Furthermore, we enhanced our capital structure with a
successful inaugural offering of C$700 million in senior
unsecured notes, providing us with added flexibility to
operate with a more efficient leverage structure while
continuing to execute on our capital allocation objec-
tives — prioritizing capital reinvestment to drive organic
growth, and capital returns to shareholders. To this
end, in 2024, Gildan invested $150 million towards
the continued development of our unparalleled large
scale, vertically integrated manufacturing system. And,
based on our strong free cash flow and our new capital
structure targets, we returned a record $889 million to
shareholders, including $134 million in dividends and
share repurchases of $756 million representing about 18
million shares acquired under our normal course issuer
bid or approximately 11% of our public float.
SIGNIFICANT STRIDES IN OUR STRATEGIC INITIATIVES
Gildan’s strategic initiatives over the past six years—begin-
ning with the Back-to-Basics phase and evolving into the
Gildan Sustainable Growth phase starting in 2022—have
proven to be highly impactful, enabling the Company to
consistently deliver strong results despite macroeconomic
pressures arising from the pandemic including inflation
and high interest rates. Moreover, throughout this period,
Gildan has not only performed well but, more importantly,
has reinforced its competitive positioning to continue to
drive long-term value.
During the last year we continued to make significant
strides in advancing our capacity expansion, innovation
and ESG initiatives — the three pillars of our GSG strategy.
Driving Growth, Enhancing Efficiency and Geographic
Diversification Through Scalable Manufacturing
We successfully ramped up operations at our first facility
in our new large scale Bangladesh manufacturing com-
plex, meeting our targeted exit production run-rate. This
strategic expansion is strengthening Gildan’s position
in the ring-spun T-shirt product category where we
continued to gain market share. In the United States,
home to our western hemisphere yarn manufacturing
hub, we invested in modernizing operations to support
1) This is a non-GAAP financial measure or ratio, does not have a standardized meaning, may not be comparable to similar measures presented by other entities and should not be considered
a substitute for or superior to GAAP results. Please refer to section 16 of Gildan’s 2024 MD&A (available on SEDAR+ at www.sedarplus.ca) for the definition and reconciliation of such non-GAAP
financial measure or ratio to the most directly comparable IFRS measure, which section is incorporated herein by reference.
MESSAGE FROM THE CHAIR OF THE BOARD
& THE PRESIDENT AND CEO
1
FINANCIAL HIGHLIGHTS
4
ESG
6
2024 REPORT TO SHAREHOLDERS
9
CONTENTS
BANGLADESH MANUFACTURING COMPLEX
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2024 Annual Report
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growth in fleece and other product innovations. These
investments are positioning us to capitalize on emerging
market opportunities, especially amid ongoing supplier
rationalization in the changing market landscape, rein-
forcing our competitive edge.
Driving Leadership in Innovation
Gildan has also been advancing innovation across
products and manufacturing processes from enhanc-
ing fabric features, product fit, adaptability to evolving
printing techniques, and ESG attributes. Earlier in 2024,
we launched our most extensive innovation pipeline to
date. Our basic product offering now features improved
softness and printability, achieved through proprietary
soft cotton technology which we developed by investing
in and re-engineering our production process from
yarn to fabric. We also developed new technology for
fleece fabric and introduced Pigment Pure™ dyeing and
Color Blast™ dyeing innovations in our Comfort Colors®
product offering. Concurrently, we continued to make
investments in 3D design and digital product creation,
digital tools, predictive analytics, and AI to accelerate
decision-making, streamline operations, and optimize
supply chain planning.
Enhancing Value Through ESG Commitment
We proudly marked two decades of sustainability re-
porting with Gildan’s 20th ESG report, reinforcing our
commitment to transparency. Three years into our Next
Generation ESG strategy, we are making solid progress
toward our 2030 greenhouse gas (GHG) emissions
targets, which have been validated by the Science Based
Targets initiative. We increased our use of renewable
energy, such as solar power at our new Bangladesh
facility, and incorporated a higher proportion of recycled
polyester across our product lines. Further, a significant
portion of our cotton supply comes from suppliers
verified by the U.S. Cotton Trust Protocol and Better
Cotton and in terms of gender parity, we achieved female
representation at the director level and above within the
company’s management team of 32.3%2.
These achievements and our strong ESG positioning
earned Gildan inclusion on the Dow Jones Best-in-Class
North America Index3, marking its 12th consecutive year
of inclusion in this index, and in the 2025 Sustainability
Yearbook for the 13th consecutive year. We were also
recognized as one of Canada’s Best 50 Corporate
Citizens by Corporate Knights for the third consecutive
year and featured in TIME’s inaugural list of The World’s
Most Sustainable Companies. While we are honoured
by these awards and accolades, our ESG commitment is
driven by our unwavering belief that strong ESG practices
are essential to creating long-term value for the Company.
ESG has always been a fundamental element of our
strategy, guiding our actions and decisions.
Looking Ahead, We See a Bright Future
We are incredibly proud of what we have accomplished
together. This past year has been a testament to
the collective strength and dedication of our global
organization, the loyalty of our customers, and the
ongoing support and trust of our shareholders—all of
which we greatly value and for which we extend our
deepest gratitude.
We are excited about the opportunities ahead and, with
an outstanding team, clear vision and unwavering focus
on execution, we are confident that by further advancing
our GSG strategy, we are well-positioned for continued
success and to further drive sustainable long-term value
for shareholders and other stakeholders.
Sincerely,
Michael Kneeland
Chair of
the Board
Glenn J. Chamandy
President and
Chief Executive Officer
2) As at December 31, 2024.
3) Formerly the Dow Jones Sustainability™ North America Index.
2024 Annual Report
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5
CASH FLOW(1)
1,981
2,923
3,241
3.07
2.72
2.93
3.11
18.9%
3,271
501
2.46
-9.1%
22.3%
18.6%
19.7%
21.3%
389
3.00
0.9%
20.2%
FINANCIAL
HIGHLIGHTS
414
415
618
198
358
594
2022
2020
2023
2024
2022
2020
2021
2023
2024
2022
2020
2021
2023
2024
2022
2020
2021
2023
2024
NET SALES
DILUTED EARNINGS PER SHARE
OPERATING MARGIN(2)
In U.S.$
Diluted earnings (loss) per share
Adjusted diluted earnings (loss) per share(1)
Cash flow from operating activities
Free cash flow(1)
In U.S.$ millions
2021
-1.14
-0.18
3,196
3.03
2.57
Operating margin(2)
Adjusted operating margin(1)
In U.S. $ millions
547
392
20.1%
17.3%
(in U.S. $ millions, except per share data and ratios)
2020
2021
2022
2023
2024
STATEMENT OF EARNINGS
Net sales
1,981
2,923
3,241
3,196
3,271
Adjusted EBITDA(1)
165
727
764
675
834
Gross profit
249
940
992
880
1,004
Adjusted gross profit(1)
306
903
966
877
1,004
Operating income (loss)
(181)
652
603
644
618
Adjusted operating income(1)
18
591
639
553
696
Net earnings (loss)
(225)
607
542
534
401
Diluted earnings (loss) per share
(1.14)
3.07
2.93
3.03
2.46
Adjusted net earnings (loss)(1)
(36)
538
575
453
490
Adjusted diluted earnings (loss) per share(1)
(0.18)
2.72
3.11
2.57
3.00
CASH FLOW
Cash flow from operating activities
415
618
414
547
501
Capital expenditures
58
130
245
208
150
Free cash flow(1)
358
594
198
392
389
FINANCIAL POSITION
Total assets
3,021
3,137
3,440
3,515
3,715
Net debt(1)
577
530
874
993
1,569
Shareholders' equity
1,559
1,919
1,882
1,957
1,457
FINANCIAL RATIOS
Gross margin(2)
12.6%
32.2%
30.6%
27.5%
30.7%
Adjusted gross margin(1)
15.3%
30.9%
29.8%
27.4%
30.7%
Operating margin(3)
-9.1%
22.3%
18.6%
20.1%
18.9%
Adjusted operating margin(1)
0.9%
20.2%
19.7%
17.3%
21.3%
Return on adjusted average net assets
(Adjusted RONA)(1)
1.0%
23.1%
21.0%
16.2%
17.9%
Net debt leverage ratio(1)
3.5x
0.7x
1.1x
1.5x
1.9x
1) This is a non-GAAP financial measure or ratio, does not have a standardized meaning, may not be comparable to similar measures presented by other entities and
should not be considered a substitute for or superior to GAAP results. Please refer to section 16 of Gildan’s 2024 MD&A (available on SEDAR+ at www.sedarplus.ca) for the
definition and reconciliation of such non-GAAP financial measure or ratio to the most directly comparable IFRS measure, which section is incorporated herein by reference.
2) Operating margin is defined as operating income (loss) divided by net sales.
Certain minor rounding variances exist between the consolidated financial statements and this summary.
1) This is a non-GAAP financial measure or ratio, does not have a standardized meaning, may not be comparable to similar measures presented by other entities and
should not be considered a substitute for or superior to GAAP results. Please refer to section 16 of Gildan’s 2024 MD&A (available on SEDAR+ at www.sedarplus.ca) for the
definition and reconciliation of such non-GAAP financial measure or ratio to the most directly comparable IFRS measure, which section is incorporated herein by reference.
2) Gross margin is defined as gross profit divided by net sales.
3) Operating margin is defined as operating income (loss) divided by net sales.
Certain minor rounding variances exist between the consolidated financial statements and this summary.
Our Next Generation ESG strategy is one of the three key
pillars of the Gildan Sustainable Growth strategy. As an
integral part of Gildan’s daily operations, ESG enhances our
ability to manage risks, opens up opportunities to create and
innovate, and increases the overall resiliency of our business,
while strengthening our position as a leader in responsible
apparel manufacturing.
- Glenn Chamandy, President and CEO of Gildan
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ESG
1) This project consists of the installation of 7MWp distributed in more than 14,000 photovoltaic modules on the roofs of one of our facilities in Bangladesh. It is estimated that in 2025, the solar
energy system will generate approximately 5.9 million kWh energy for this facility.
2) EcoProcess is an optimized pre-treatment process of the cotton fabrics used in our basic product offering. It uses an estimated 22% less water and 30% less steam consumption than a conven-
tional process. These percentages are estimated based on operational data.
3) The Pigment Pure™ process uses 3 times less water, takes 40% less process time, consumes less energy, and requires zero salt. Data on the Pigment Pure™ process are based on approximate
comparisons with conventional reactive dyeing.
4) Formerly known as Dow Jones Sustainability™ North America Index.
Manufacturing responsibly has long been at the core of Gildan’s operations, and it is exactly this belief which drives the success
of our sustainability initiatives.
Our Next Generation ESG strategy outlines five areas of focus guiding our everyday ESG efforts and strategy:
Since launching our Next Generation ESG strategy in 2022, we have elevated our approach to ESG business-wide by imple-
menting creative solutions to address resource consumption, strengthen and standardize ESG practices, and take care of our
people, both employees and our communities at large.
KEY ACCOMPLISHMENTS
In 2024, Gildan continued to fortify its ESG practices business-wide and drive forward its Next
Generation ESG strategy.
Investing in solar energy
In 2024, we invested approximately U.S.$3.5 million in a pilot project for solar energy in Bangladesh,
exploring alternate energy sources for the business. This initiative will strategically balance solar
energy production with gas and steam generation to mitigate our energy risks and reduce CO2
emissions¹.
Innovating to reduce water
Thanks to vertical integration, we have been analyzing our operations to optimize processes and
implement innovations to reduce water consumption. Over the last two years, we have introduced
initiatives such as EcoProcess, a pre-treatment process used in our textile facilities in Honduras, the
Dominican Republic, and Bangladesh.² We have also launched Pigment Pure™, Comfort Colors®’
proprietary dyeing method.³ Both processes help decrease water use.
Raising standards
In 2024, the Company implemented the ISO 45001 certification, an internationally recognized
framework for managing occupational health and safety risk, at all its facilities in the Dominican
Republic. We are now undertaking this process to certify our facilities in other regions.
Getting involved in our communities
In 2024, we launched the Global Employee Volunteer Month, a dedicated month-long celebration
encouraging employees to volunteer their time towards quality education, good health and well-being,
and resource protection. Gildan’s first edition of Global Employee Volunteer Month resulted in 660
employees collectively dedicating 3,700 hours towards community initiatives.
AWARDS & RECOGNITIONS
Gildan continues to be recognized by industry-leading benchmark
organizations, a testament to the Company’s sustainability efforts
and advancements.
• Dow Jones Best-in-Class North America Index⁴
• TIME World’s Most Sustainable Companies
• Corporate Knights – Canada’s Best 50 Corporate Citizens
• CDP Climate Change Disclosures – Leadership Band Inclusion
• S&P – Global Sustainability Yearbook
CLIMATE, ENERGY,
AND WATER
CIRCULARITY
HUMAN CAPITAL
MANAGEMENT
LONG-TERM
VALUE CREATION
TRANSPARENCY
AND DISCLOSURE
2024 Annual Report
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2024
REPORT TO
SHAREHOLDERS
February 19, 2025
TABLE OF CONTENTS
MANAGEMENT’S DISCUSSION AND ANALYSIS
1
PREFACE
P. 3
2
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
P. 3
3
OUR BUSINESS
P. 5
3.1
Overview
3.2
Our operations
3.3
Competitive environment
4
STRATEGY
P. 8
5
OPERATING RESULTS
P. 9
5.1
Non-GAAP financial measures
5.2
Overview and business environment
5.3
Business acquisitions/dispositions and facility closures
5.4
Global Minimum Tax
5.5
Selected annual information
5.6
Consolidated operating review
5.7
Summary of quarterly results
5.8
Fourth quarter operating results
6
FINANCIAL CONDITION
P. 24
7
CASH FLOWS
P. 26
8
LIQUIDITY AND CAPITAL RESOURCES
P. 28
9
LEGAL PROCEEDINGS
P. 32
10
FINANCIAL RISK MANAGEMENT
P. 32
11
CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
P. 33
12
ACCOUNTING POLICIES AND NEW ACCOUNTING STANDARDS NOT YET APPLIED
P. 34
13
DISCLOSURE CONTROLS AND PROCEDURES
P. 35
14
INTERNAL CONTROL OVER FINANCIAL REPORTING
P. 35
15
RISKS AND UNCERTAINTIES
P. 36
16
DEFINITION AND RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
P. 48
MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING
P. 59
AUDITED ANNUAL CONSOLIDATED FINANCIAL STATEMENTS
P. 65
NOTES TO AUDITED ANNUAL CONSOLIDATED FINANCIAL STATEMENTS
P. 69
1.0 PREFACE
In this Management’s Discussion and Analysis (MD&A), “Gildan”, the “Company”, or the words “we”, “us”, and “our” refer,
depending on the context, either to Gildan Activewear Inc. or to Gildan Activewear Inc. together with its subsidiaries.
This MD&A comments on our operations, financial performance and financial condition as at and for the years ended
December 29, 2024 and December 31, 2023. All amounts in this MD&A are in U.S. dollars, unless otherwise noted. For a
complete understanding of our business environment, trends, risks and uncertainties, and the effect of accounting
estimates on our results of operations and financial condition, this MD&A should be read in conjunction with Gildan’s
audited annual consolidated financial statements for the year ended December 29, 2024 and the related notes.
In preparing this MD&A, we have taken into account all information available to us up to February 19, 2025, the date of
this MD&A. The audited annual consolidated financial statements and this MD&A were reviewed by Gildan’s Audit and
Finance Committee and were approved and authorized for issuance by our Board of Directors on February 18, 2025.
All financial information contained in this MD&A and in the audited annual consolidated financial statements has been
prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting
Standards Board (IASB), except for certain information discussed in the section entitled “Definition and reconciliation of
non-GAAP financial measures” in this MD&A.
Additional information about Gildan, including our 2024 Annual Information Form, is available on our website at
www.gildancorp.com, on the SEDAR+ website at www.sedarplus.ca, and on the EDGAR section of the U.S. Securities
and Exchange Commission website (which includes the Annual Report on Form 40-F) at www.sec.gov.
2.0 CAUTION REGARDING FORWARD-LOOKING STATEMENTS
Certain statements included in this MD&A constitute “forward-looking statements” within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995 and Canadian securities legislation and regulations and are subject to important
risks, uncertainties, and assumptions. This forward-looking information includes, amongst others, information with respect
to our objectives and the strategies to achieve these objectives, including statements related to the Gildan's Sustainable
Growth (GSG) strategy and Next Generation ESG strategy and ESG targets as well as information with respect to our
beliefs, plans, expectations, anticipations, estimates, and intentions. In particular, information appearing under the
headings “Our business”, “Strategy”, "Operating results", “Liquidity and capital resources - Long-term debt and net debt”,
"Financial risk management", and "Risks and uncertainties" contain forward looking statements. Forward-looking
statements generally can be identified by the use of conditional or forward-looking terminology such as “may”, “will”,
“expect”, “intend”, “estimate”, “project”, “assume”, “anticipate”, “plan”, “foresee”, “believe”, or “continue”, or the negatives of
these terms or variations of them or similar terminology. We refer you to the Company’s filings with the Canadian
securities regulatory authorities and the U.S. Securities and Exchange Commission, as well as the risks described under
the “Financial risk management”, “Critical accounting estimates and judgments”, and “Risks and uncertainties” sections of
this MD&A for a discussion of the various factors that may affect the Company’s future results. Material factors and
assumptions that were applied in drawing a conclusion or making a forecast or projection are also set out throughout this
document.
Forward-looking information is inherently uncertain and the results or events predicted in such forward-looking information
may differ materially from actual results or events. Material factors, which could cause actual results or events to differ
materially from a conclusion, forecast, or projection in such forward-looking information, include, but are not limited to:
•
changes in general economic, financial or geopolitical conditions globally or in one or more of the markets we serve;
•
our ability to implement our growth strategies and plans, including our ability to bring projected capacity expansion
online;
•
the intensity of competitive activity and our ability to compete effectively;
•
our reliance on a small number of significant customers, including our largest distributor;
•
the fact that our customers do not commit to minimum quantity purchases;
•
our ability to anticipate, identify, or react to changes in consumer preferences and trends;
•
our ability to manage production and inventory levels effectively in relation to changes in customer demand;
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 3
•
fluctuations and volatility in the prices of raw materials and energy related inputs, from current levels, used to
manufacture and transport our products;
•
our reliance on key suppliers and our ability to maintain an uninterrupted supply of raw materials, intermediate
materials, and finished goods;
•
the impact of climate, political, social, and economic risks, natural disasters, epidemics, pandemics and endemics, in
the countries in which we operate or sell to, or from which we source production;
•
disruption to manufacturing and distribution activities due to such factors as operational issues, disruptions in
transportation logistic functions, labour disruptions, political or social instability, weather-related events, natural
disasters, epidemics and pandemics, and other unforeseen adverse events;
•
compliance with applicable trade, competition, taxation, environmental, health and safety, product liability,
employment, patent and trademark, corporate and securities, licensing and permits, data privacy, bankruptcy, anti-
corruption, and other laws and regulations in the jurisdictions in which we operate;
•
the imposition of trade remedies, compliance with or changes to duties and tariffs, international trade legislation,
bilateral and multilateral trade agreements and trade preference programs that the Company is currently relying on in
conducting its manufacturing operations or the application of safeguards thereunder;
•
elimination of government subsidies and credits that we currently benefit from, and the non-realization of anticipated
new subsidies and credits;
•
the impact, including broader economic impacts, of the proposed tariffs that were recently announced by the U.S.
federal government and of any retaliation measures that may be announced by other governments, or the imposition
of further restrictions or prohibitions on the export or import of goods between countries;
•
factors or circumstances that could increase our effective income tax rate, including the outcome of any tax audits or
changes to applicable tax laws or treaties;
•
changes to and failure to comply with consumer product safety laws and regulations;
•
changes in our relationship with our employees or changes to domestic and foreign employment laws and
regulations;
•
our reliance on key management and our ability to attract and/or retain key personnel;
•
negative publicity as a result of actual, alleged, or perceived violations of human rights, labour and environmental
laws or international labour standards, or unethical labour or other business practices by the Company or one of its
third-party contractors;
•
our ability to protect our intellectual property rights;
•
operational problems with our information systems or those of our service providers as a result of system failures,
viruses, security and cyber security breaches, disasters, and disruptions due to system upgrades or the integration of
systems;
•
an actual or perceived breach of data security;
•
rapid developments in artificial intelligence;
•
our ability to successfully integrate acquisitions and realize expected benefits and synergies;
•
changes in accounting policies and estimates; and
•
exposure to risks arising from financial instruments, including credit risk on trade accounts receivables and other
financial instruments, liquidity risk, foreign currency risk, and interest rate risk, as well as risks arising from commodity
prices.
These factors may cause the Company’s actual performance and financial results in future periods to differ materially from
any estimates or projections of future performance or results expressed or implied by such forward-looking statements.
Forward-looking statements do not take into account the effect that transactions or non-recurring or other special items
announced or occurring after the statements are made may have on the Company’s business. For example, they do not
include the effect of business dispositions, acquisitions, other business transactions, asset write-downs, asset impairment
losses, or other charges announced or occurring after forward-looking statements are made. The financial impact of such
transactions and non-recurring and other special items can be complex and necessarily depends on the facts particular to
each of them.
There can be no assurance that the expectations represented by our forward-looking statements will prove to be correct.
The purpose of the forward-looking statements is to provide the reader with a description of management’s expectations
regarding the Company’s future financial performance and may not be appropriate for other purposes. Furthermore,
unless otherwise stated, the forward-looking statements contained in this report are made as of the date hereof, and we
do not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as
a result of new information, future events, or otherwise unless required by applicable legislation or regulation. The
forward-looking statements contained in this report are expressly qualified by this cautionary statement.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 4
3.0 OUR BUSINESS
3.1 Overview
Gildan is a leading vertically integrated manufacturer of everyday basic apparel, including activewear, underwear, and
hosiery products. Our products are sold to wholesale distributors, screenprinters, and embellishers in North America,
Europe, Asia-Pacific, and Latin America, as well as to retailers in North America, including mass merchants, department
stores, national chains, specialty retailers, craft stores, and online retailers. We also manufacture products for global
lifestyle brand companies who market these products under their own brands through their own retail establishments, e-
commerce platforms, and/or to third-party retailers.
Manufacturing and operating as a socially responsible producer is at the heart of what we do. The vast majority of our
sales are derived from products we manufacture ourselves. Since the Company’s formation, we have made significant
capital investments in developing and operating our own large-scale, vertically integrated manufacturing facilities,
including yarn production, textile and sock manufacturing, as well as sewing operations, controlling all aspects of the
production process from start to finish for the garments we produce.
We believe the skill set that we have developed in designing, constructing, and operating our own manufacturing facilities,
the level of vertical integration of our supply chain and the capital investments that we have made over the years
differentiate us from our competition who are not as vertically integrated and may rely more heavily on third-party
suppliers. Owning and operating the vast majority of our manufacturing facilities allows us to exercise tighter control over
our production processes, efficiency levels, costs and product quality, as well as to provide reliable service with short
production/delivery cycle times. In addition, running our own operations allows us to achieve adherence to high standards
for environmental and social responsibility practices employed throughout our supply chain.
3.2 Our Operations
3.2.1 Brands, Products and Customers
The products we manufacture and sell are marketed under Company brands, including Gildan®, American Apparel®,
Comfort Colors®, Gildan® Hammer®, GoldToe®, and Peds®, as well as Champion®, which is under an exclusive
licensing agreement for the printwear channel in the U.S. and Canada. Further, we manufacture for, and supply products
to select leading global athletic and lifestyle brands, and to certain retail customers who market these products under their
own exclusive brands.
Our primary product categories include activewear tops and bottoms (activewear), socks (hosiery), and underwear tops
and bottoms (underwear). In fiscal 2024, Activewear sales accounted for 87% of total net sales, and Hosiery and
underwear sales accounted for 13% of total net sales.
We sell our activewear products primarily in “blank” or undecorated form, without imprints or embellishment. The majority
of our Activewear sales are currently derived from activewear sold to wholesale distributors in the imprintables channels in
North America and internationally. These wholesale distributors then sell the blank garments to screenprinters/
embellishers who decorate the products with designs and logos, and who in turn sell the embellished/imprinted activewear
into a highly diversified range of end-use markets. These include educational institutions, athletic dealers, event
merchandisers, promotional product distributors, charitable organizations, entertainment promoters, travel and tourism
venues, and retailers. The activewear products have diverse applications, such as serving as work or school uniforms or
athletic team wear or simply conveying individual, group, and team identity. We also sell activewear products in blank form
directly to various retailers, or through national accounts servicing retailers, in addition to underwear and socks for men,
ladies, and kids. These retailers include mass merchants, department stores, national chains, sports specialty stores, craft
stores, food and drug retailers, dollar stores, and price clubs, all of which sell to consumers through their brick and mortar
outlets and/or their e-commerce platforms. Additionally, we sell to pure-play online retailers who sell to consumers. We
also manufacture for and sell to select leading global athletic and lifestyle consumer brand companies who distribute
these products within the retail channel through their own retail establishments, e-commerce platforms, and/or through
third-party retailers.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 5
The following table summarizes our current primary product offering under Company and licensed brands:
Primary products
Product-line details
Brands
Activewear
T-shirts, fleece tops and bottoms, sport
shirts, polos and tank tops
Gildan®, Gildan Performance®, Gildan® Hammer®, Gildan Softstyle®,
Gildan® Heavy Cotton™, Gildan® Ultra Cotton®, Gildan DryBlend®,
Gildan® HeavyBlend™, Comfort Colors®, American Apparel®,
Champion®2
Hosiery
athletic, dress, casual and workwear
socks, liner socks, and socks for
therapeutic purposes(1)
Gildan®, GoldToe®, Signature Gold by GoldToe®, GoldToe EditionTM,
Peds®, MediPeds®, All Pro®, Powersox®
Underwear
men's and boys' underwear (tops and
bottoms) and ladies panties
Gildan®, Gildan Platinum®
(1) Applicable only to MediPeds®.
(2) Under an exclusive licensing agreement for the printwear channel in the U.S. and Canada.
3.2.2 Manufacturing
The vast majority of our products are manufactured in facilities that we own and operate. To a much lesser extent, we also
use third-party contractors to supplement certain product requirements. Our vertically integrated operations range from
start to finish of the garment production process and include capital-intensive yarn-spinning, textile and sock
manufacturing facilities, as well as labour-intensive sewing facilities. Our manufacturing operations are situated in four
main hubs, specifically in the United States, Central America, the Caribbean, and Bangladesh. All of our yarn-spinning
operations are located in the United States, while textile, sewing, and sock manufacturing operations are situated in the
other geographical hubs mentioned above, the largest of which is in Honduras in Central America.
In order to support further sales growth, continue to drive an efficient and competitive cost structure, and enhance
geographic diversification in our supply chain, we are expanding manufacturing capacity with a significant expansion in
Bangladesh, which involves the development of a large multi-plant manufacturing complex expected to house two large
textile facilities and related sewing operations. The construction of the first textile and sewing complex is largely completed
and ramped-up.
The following table provides a summary of our primary manufacturing operations by geographic region:
United States
Central America
Caribbean
Asia
Yarn-spinning facilities(1):
conversion of cotton, polyester and other fibres into
yarn
■ Salisbury, NC
■ Mocksville, NC
■ Eden, NC
■ Clarkton, NC
■ Sanford, NC
(2 facilities)
■ Mayodan, NC
Textile facilities:
knitting yarn into fabric, dyeing and cutting fabric
■ Honduras
(4 facilities)
■ Dominican
Republic
■ Bangladesh
(2 facilities)
Sewing facilities(2):
conversion of cut fabric into garments
■ Honduras
(2 facilities)
■ Nicaragua
(5 facilities)
■ Dominican
Republic
(3 facilities)
■ Bangladesh
(3 facilities)
Garment-dyeing(3):
pigment dyeing or reactive dyeing process
(Pigment Pure™)
■ Honduras
Hosiery manufacturing facilities:
conversion of yarn into finished socks
■ Honduras
(1) While the majority of our yarn requirements are internally produced, we also use third-party yarn-spinning suppliers, primarily in Asia
for our Bangladesh operations, to satisfy the remainder of our yarn needs. The majority of cotton used by our Asian contractors is U.S.
cotton.
(2) Although the majority of our sewing facilities are Company-operated, we also use the services of third-party sewing contractors,
primarily in Central America and Haiti, to satisfy the remainder of our sewing requirements.
(3) Garment dyeing is a feature of our Comfort Colors® products only, a proprietary dyeing process under the name Pigment Pure™
which involves a different dyeing process than how we typically dye the majority of our products at our textile facilities.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 6
3.2.3 Sales, marketing and distribution
Our global sales and marketing office is located in Christ Church, Barbados, out of which we have established customer-
related functions, including sales management, marketing, customer service, credit management, sales forecasting,
production planning, inventory control, and logistics, as well as finance, human resources and information technology
functions. We also maintain sales support offices in the U.S. We have established extensive distribution operations
primarily through internally managed and operated large distribution centres and some smaller facilities in the U.S., a
large distribution facility in Honduras, as well as a distribution facility in Bangladesh. To supplement some of our
distribution needs, we also use third-party warehouses in North America and Europe.
3.2.4 Employees and corporate office
We currently employ approximately 50,000 employees worldwide. Our corporate head office is located in Montreal,
Canada.
3.3 Competitive environment
Competition in the basic apparel market is generally based upon service and product availability, price, quality, comfort
and fit, style, and brand. We compete on these factors by leveraging our competitive strengths, including our strategically
located and vertically integrated manufacturing supply chain, scale, cost structure, global distribution, and our brand
positioning in the markets we serve. We believe our manufacturing skill set, together with our large-scale, low-cost
vertically integrated supply chain infrastructure that we have developed through significant investments over time, are key
competitive strengths and differentiators from our competition.
We face competition from large and smaller U.S. based and foreign manufacturers or suppliers of basic family apparel.
Among the larger competing North American-based manufacturers are Hanesbrands Inc., as well as Fruit of the Loom,
Inc., a subsidiary of Berkshire Hathaway Inc., which competes through its own brand offerings and those of its subsidiary,
Russell Corporation, depending on the channel. These companies manufacture in some of the same geographies as
Gildan and compete primarily within the same basic apparel product categories in similar channels of distribution in North
America and international markets. In socks and underwear, our competitors also include Renfro Corporation, Jockey
International, Inc., and Kayser Roth Corporation. In addition, we compete with smaller U.S. based companies selling to or
operating as wholesale distributors of imprintables activewear products, including Next Level Apparel, Color Image
Apparel, Inc. (owner of the Bella + Canvas brand), as well as Central American, Mexican and Asian manufacturers that
supply products in the imprintables channel. Although we also compete with some of our customers' own private brand
offerings, we also supply products to certain customers that are seeking strategic suppliers with our type of manufacturing
capabilities to support their private brand offerings. Finally, the Company does not expect to be impacted at this juncture
by the new U.S. administration's tariffs as announced to date, with respect to China, Canada and Mexico.
3.4 Recent events
On December 11, 2023, the Company’s then Board of Directors (the “Previous Board”) announced the termination of the
Company’s President and Chief Executive Officer, Glenn Chamandy. On such date, the Previous Board appointed Vince
Tyra as President and Chief Executive Officer, and Mr. Tyra took office in the first quarter of fiscal 2024, effective on
January 15, 2024. Following the termination of Mr. Chamandy, shareholder Browning West and others initiated a
campaign and proxy contest against the Previous Board, proposing a new slate of Directors and requesting the
reinstatement of Mr. Chamandy as President and Chief Executive Officer. In the second quarter of 2024, on April 22,
2024, in advance of the May 28, 2024 Annual General Meeting of Shareholders (“Annual Meeting”), the Previous Board
announced a refreshed Board of Directors (“Refreshed Board”) that resulted in the immediate replacement of five
Directors, with two additional Directors staying on temporarily but not standing for re-election at the Annual Meeting. On
May 23, 2024, five days prior to the Annual Meeting, the Refreshed Board and Mr. Tyra resigned, along with Arun Bajaj,
the Company’s Executive Vice-President, Chief Human Resources Officer (CHRO) and Legal Affairs. The Refreshed
Board appointed Browning West nominees to the Board of Directors (the “New Board”), effective as of that date. On May
24, 2024, the New Board reinstated Mr. Chamandy as President and Chief Executive Officer. On May 28, 2024, the New
Board was elected by shareholders at the Annual Meeting. During fiscal 2024, the Company incurred significant expenses
relating to the proxy contest, leadership changes and related matters, particularly in the first half of the year, primarily at
the direction of the Previous Board and the Refreshed Board, which are referred to in section 5 of this MD&A entitled
"Operating results" and explained in more detail in section 16.0 of this MD&A entitled "Definition and reconciliation of non-
GAAP financial measures".
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 7
On October 1, 2024, the Company's two largest wholesale distributor customers, to which Gildan is a significant supplier,
closed a transaction combining their businesses. The combination of these two distributors has increased our customer
sales concentration with the combined entity to approximately 39% of our fiscal 2024 net sales. Refer to note 6 and note
27 in the audited consolidated financial statements as at and for the year ended December 29, 2024, for more information
on the increased concentration of sales and receivable balances resulting from this business combination.
4.0 STRATEGY
Gildan Sustainable Growth Strategy
Building on a strong foundation, in 2022 the Company launched its “Gildan Sustainable Growth” (GSG) strategy focused
on driving organic top and bottom-line growth through three key pillars – capacity expansion, innovation, and ESG. We
believe that by leveraging our competitive advantage as a low-cost, vertically integrated manufacturer and successfully
executing on well-defined capacity expansion plans, delivering value-driven and innovative products, and leading ESG
practices, we will be well positioned to drive strong revenue growth, profitability and effective asset utilization, all of which
are expected to allow us to deliver compelling shareholder value creation.
The three pillars of our GSG strategy are:
Capacity-driven growth: Leveraging our strong competitive advantage as a low-cost vertically integrated manufacturer
as we execute on well-defined plans to expand and optimize our global production capacity to support our long-term
growth plans
Executing on our well-defined plans, we have strengthened our vertical integration by expanding our yarn-spinning
capabilities through the acquisition and modernization of Frontier Yarns. We are also executing on the first phase of
development of a large vertically integrated textile and sewing complex in Bangladesh, as described in more detail in
subsection 3.2.2 entitled "Manufacturing" in this MD&A.
Innovation: Driving leadership in innovation across the organization and all areas of operations aimed at delivering high-
quality, value-driven products, increased speed-to-market, operational efficiencies and a reduced environmental footprint
The Company has identified and defined specific key initiatives, as well as investments aimed at driving innovation in our
product development and manufacturing processes, distribution and final products, including fabric features, product fit,
fabric adaptability to evolving printing and decorating techniques, and ESG-friendly product attributes. In early 2024, we
announced the release of new products, including our improved ultra cotton 2000 T-shirt. We developed a new proprietary
cotton technology by re-engineering our entire process from the yarn through to the finished process, enhancing fabric
softness, all while improving printability. We are also actively investing in digital tools, predictive analytics, and artificial
intelligence to accelerate decision-making across the organization, streamline processes, and optimize supply chain
planning.
ESG: Further increasing our ESG focus across all operations and leveraging our strong ESG standing and progress to
enhance our value proposition to all our stakeholders
In 2024, Gildan embarked on its third year of implementing its Next Generation ESG strategy, which encompasses a
broad range of initiatives. These include reducing carbon footprint and water intensity, fostering a circular economy,
supporting regional economic development, ensuring respect for human rights, and maintaining safety standards
throughout the supply chain. The strategy also embraces a commitment to people, with a focus on investing in our
workforce, promoting diversity and inclusion, in addition to enhancing ESG transparency. This strategy includes 10 core
targets focused on five different pillars: Climate Energy and Water; Circularity; Human Capital Management; Long Term
Value Creation; and Transparency and Disclosure. For more detailed information regarding the process of these
initiatives, please refer to Gildan's 2023 ESG report. Information in our 2023 ESG Report does not form part of and is not
incorporated by reference in this MD&A.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 8
5.0 OPERATING RESULTS
This MD&A comments on our operations, financial performance, and financial condition as at and for the fiscal year ended
December 29, 2024 (fiscal 2024) and the fiscal year ended December 31, 2023 (fiscal 2023).
5.1 Non-GAAP financial measures
We use non-GAAP financial measures and ratios to assess our operating and financial performance, financial condition
and leverage, and liquidity. Securities regulations require that companies caution readers that earnings and other
measures adjusted to a basis other than IFRS do not have standardized meanings and are unlikely to be comparable to
similar measures used by other companies. Accordingly, they should not be considered in isolation. In this MD&A, we use
non-GAAP financial measures and ratios including: adjusted net earnings; adjusted earnings before income taxes;
adjusted diluted EPS; adjusted income tax expense; adjusted effective income tax rate; adjusted gross profit; adjusted
gross margin; adjusted selling, general and administrative expenses (adjusted SG&A); adjusted SG&A expenses as a
percentage of net sales; adjusted operating income; adjusted operating margin; adjusted EBITDA; and return on adjusted
average net assets (adjusted RONA) to measure our performance and financial condition from one period to the next,
which excludes the variation caused by certain adjustments that could potentially distort the analysis of trends in our
operating performance, and because we believe such measures provide meaningful information to investors on the
Company’s financial performance and financial condition. We also use non-GAAP financial measures including free cash
flow, total debt, net debt, net debt leverage ratio and working capital.
We refer the reader to section 16.0 entitled “Definition and reconciliation of non-GAAP financial measures” in this MD&A
for the definition and complete reconciliation of all non-GAAP financial measures used and presented by the Company to
the most directly comparable IFRS measures.
5.2 Overview and business environment
In the last couple of years, relatively tough macroeconomic conditions prevailed, including higher interest rates, significant
inflation and resulting consumer demand and spending headwinds. The overall US apparel market improved slightly in
2024 following muted growth in 2023, as inflationary pressures began to ease and interest rate cuts were implemented.
Within the apparel market, our industry has shown signs of resiliency, notably in the printwear industry, marked by
continued enthusiasm surrounding experiences, such as travel, concerts, and large events. This said, corporate and
promotional end uses do not appear to have recovered from pre-pandemic levels. We also continued to see broad market
weakness in the underwear category. We have diligently navigated through the changing environment of the past few
years, which has allowed us to deliver strong performance within key categories. Overall, our 2024 net sales have
benefited from the slightly improved environment and more specifically from the successful execution of our GSG strategy,
including product innovation and our strengthened competitive positioning.
Over the past year, we made significant progress on each of the three pillars of our GSG strategy, optimizing our
manufacturing capacity, fostering innovation, and further reinforcing our commitment to ESG. As such, for 2024, we
delivered adjusted operating margins1 of 21.3%, well above 2023 levels, and above our original annual target range of
18% to 20%, a range which was revised higher to 'above 21%' in the third quarter of 2024. We benefited from reduced
pressure from the flow through of peak cotton costs in 2023 and we continued to benefit from lower manufacturing input
costs.
5.3 Business acquisitions/dispositions and facility closures
Fiscal 2023 (year ended December 31, 2023)
During fiscal 2023, Gildan closed its San Miguel sewing facility located in Choloma, Honduras. This decision was based
on market conditions, global competition and the need to optimize and diversify our operations. We also closed one of two
yarn spinning plants located in Salisbury, North Carolina, consolidating this capacity into the Mocksville facility, also
located in North Carolina, as part of our ongoing efforts to optimize ring spun yarn production and drive an efficient,
competitive manufacturing platform.
Fiscal 2022 (year ended January 1, 2023)
During fiscal 2022 the Company sold a yarn spinning facility located in the U.S., which was the smallest of the four
facilities that the Company acquired on December 10, 2021 as part of the Frontier Yarns acquisition. The sale included the
disposition of inventory, equipment, goodwill and the transfer of a leasehold interest and related lease liability.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 9
During the fourth quarter of fiscal 2022, the Company sold its sheer inventory and trademarks for total proceeds of
$6 million. The gain on disposal of these assets was insignificant.
5.4 Global Minimum Tax ("GMT")
On June 20, 2024, the Government of Canada enacted the Global Minimum Tax Act (“GMTA”), implementing the key
measures of the OECD’s Pillar Two global minimum tax regime in Canada, including the income inclusion rule and a
domestic minimum top-up tax. The enactment of these rules in Canada ensures that Canadian-based multinational
enterprises with annual revenues of €750 million or more are subject to a minimum effective tax rate of 15% on their
profits in every jurisdiction where they operate. This is achieved through a system of top-up taxes to bring the enterprise’s
effective tax rate in each jurisdiction to a minimum of 15%. The GMTA applies to the Company effective January 1, 2024.
Under the GMTA, the Company is liable to pay a top-up tax in Canada if the effective tax rate in a jurisdiction is below the
15% minimum rate, as calculated under the Pillar Two rules on a jurisdiction-by-jurisdiction basis.
On May 21, 2024, the Government of Barbados enacted legislation introducing certain tax measures in response to the
global implementation of the Pillar Two global minimum tax regime. These measures aim to include raising the corporate
tax rate to 9% for most companies and implementing a domestic minimum top-up tax for large multinational enterprises
operating in Barbados. Together, these measures aim to ensure that large multinational enterprises operating in Barbados
are subject to a minimum effective tax rate of 15% on profits earned in Barbados. As a transitional rule, these measures
apply in 2024 only to companies of multinational enterprises headquartered in jurisdictions that have adopted the Pillar
Two rules. Consequently, following Canada's enactment of the GMTA on June 20, 2024, these measures apply to the
Company’s Barbadian subsidiaries effective January 1, 2024, which together comprise the majority of the Company’s
profits. As a result, effective January 1, 2024, the Company’s profits in Barbados are subject to an effective tax rate of
15% under Barbados’ domestic legislation, meaning no top-up tax is payable in Canada (refer to subsection 5.6.9 Income
taxes in this MD&A for additional information).
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 10
5.5 Select annual information
(in $ millions, except per share amounts or
otherwise indicated)
Variation 2024-2023
Variation 2023-2022
2024
2023
2022
$
%
$
%
Net sales
3,270.6
3,195.9
3,240.5
74.7
2.3 %
(44.6)
(1.4) %
Gross profit
1,003.7
880.1
992.4
123.6
14.0 %
(112.3)
(11.3) %
Adjusted gross profit(1)
1,003.7
876.9
965.5
126.7
14.5 %
(88.6)
(9.2) %
SG&A expenses
390.8
330.4
326.3
60.4
18.3 %
4.1
1.3 %
Adjusted SG&A expenses(1)
308.1
324.1
326.3
(16.0)
(4.9) %
(2.2)
(0.7) %
Gain on sale and leaseback
—
(25.0)
—
25.0
n.m.
(25.0)
n.m.
Net insurance gains
—
(74.2)
—
74.2
n.m.
(74.2)
n.m.
Restructuring and acquisition-related
(recoveries) costs
(5.3)
45.8
0.5
(51.1)
n.m.
45.3
n.m.
Impairment (Impairment reversal) of
intangible assets, net of write-downs
—
(40.8)
62.3
40.8
n.m.
(103.1)
n.m.
Operating income
618.2
643.9
603.4
(25.6)
(4.0) %
40.5
6.7 %
Adjusted operating income(1)
695.6
552.8
639.3
142.8
25.8 %
(86.4)
(13.5) %
Adjusted EBITDA(1)
833.8
674.5
764.2
159.3
23.6 %
(89.7)
(11.7) %
Financial expenses
104.2
79.7
37.0
24.5
30.7 %
42.7
115.4 %
Income tax expense
113.2
30.6
24.9
82.6
n.m.
5.7
22.9 %
Net earnings
400.9
533.6
541.5
(132.7)
(24.9) %
(7.9)
(1.5) %
Adjusted net earnings(1)
489.7
452.6
574.7
37.1
8.2 %
(122.1)
(21.2) %
Basic EPS
2.46
3.03
2.94
(0.57)
(18.8) %
0.09
3.1 %
Diluted EPS
2.46
3.03
2.93
(0.57)
(18.8) %
0.10
3.4 %
Adjusted diluted EPS(1)
3.00
2.57
3.11
0.43
16.7 %
(0.54)
(17.4) %
Gross margin(2)
30.7 %
27.5 %
30.6 %
n/a
3.2 pp
n/a
(3.1) pp
Adjusted gross margin(1)
30.7 %
27.4 %
29.8 %
n/a
3.3 pp
n/a
(2.4) pp
SG&A expenses as a percentage of net
sales(3)
11.9 %
10.3 %
10.1 %
n/a
1.6 pp
n/a
0.2 pp
Adjusted SG&A expenses as a percentage
of net sales(1)
9.4 %
10.1 %
10.1 %
n/a
(0.7) pp
n/a
—
Operating margin(4)
18.9 %
20.1 %
18.6 %
n/a
(1.2) pp
n/a
1.5 pp
Adjusted operating margin(1)
21.3 %
17.3 %
19.7 %
n/a
4.0 pp
n/a
(2.4) pp
Total assets
3,715.1
3,514.9
3,440.2
200.2
5.7 %
74.7
2.2 %
Total non-current financial liabilities
1,235.9
685.0
780.0
550.9
80.4 %
(95.0)
(12.2) %
Net debt(1)
1,568.6
993.4
873.6
575.2
57.9 %
119.8
13.7 %
Diluted weighted average number of
common shares outstanding (in ‘000s)
163,179
176,224
184,532
n/a
n/a
n/a
n/a
Return on adjusted average net assets
(Adjusted RONA)(1)
17.9 %
16.2 %
21.0 %
n/a
1.7 pp
n/a
(4.8) pp
Annual cash dividends declared per common
share
0.820
0.744
0.676
0.076
10.2 %
0.068
10.1 %
Net debt leverage ratio(1)
1.9
1.5
1.1
n/a
n/a
n/a
n/a
n.m. = not meaningful
n/a = not applicable
(1) This is a non-GAAP financial measure or ratio. See section 16.0 "Definition and reconciliation of non-GAAP financial measures" in this
MD&A.
(2) Gross margin is defined as gross profit divided by net sales.
(3) SG&A as a percentage of sales is defined as SG&A divided by net sales.
(4) Operating margin is defined as operating income (loss) divided by net sales.
Certain minor rounding variances exist between the consolidated financial statements and this summary.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 11
5.6 Consolidated operating review
5.6.1 Net sales
Net sales by major product group were as follows:
(in $ millions, or otherwise indicated)
Variation 2024-2023
Variation 2023-2022
2024
2023
2022
$
%
$
%
Activewear
2,831.1
2,668.0
2,762.5
163.1
6.1 %
(94.5)
(3.4) %
Hosiery and underwear(1)
439.5
527.9
478.0
(88.4)
(16.8) %
49.9
10.5 %
Total net sales
3,270.6
3,195.9
3,240.5
74.7
2.3 %
(44.6)
(1.4) %
(1) Also includes intimates and other fringe products.
Certain minor rounding variances exist between the consolidated financial statements and this summary.
Net sales were derived from customers located in the following geographic areas:
(in $ millions, or otherwise indicated)
Variation 2024-2023
Variation 2023-2022
2024
2023
2022
$
%
$
%
United States
$ 2,911.0 $ 2,858.1 $ 2,846.8
52.9
1.9 %
11.3
0.4 %
Canada
107.6
112.4
122.5
(4.8)
(4.3) %
(10.1)
(8.2) %
International
252.0
225.4
271.2
26.6
11.8 %
(45.8)
(16.9) %
Total net sales
$ 3,270.6 $ 3,195.9 $ 3,240.5
74.7
2.3 %
(44.6)
(1.4) %
Certain minor rounding variances exist between the consolidated financial statements and this summary.
Fiscal 2024 compared to fiscal 2023
For the year ended December 29, 2024, net sales were $3,271 million, up 2% versus the same period last year, in line
with guidance. Excluding the impact of the Under Armour phase-out, which had minimal impact on profitability, net sales
were up mid-single digits year over year. In Activewear, we generated sales of $2,831 million, up $163 million or 6%,
driven by increased shipments. We saw positive POS trends in North America and observed strong momentum at
National accounts, which were partly offset by slightly lower net selling prices. Activewear sales also reflected market
share gains in key growth categories, and a strong market response to our recently introduced products featuring key
innovations. International sales of $252 million were up 12% versus last year, reflecting demand stabilization and some
recovery in POS, as well as distributor inventory replenishment from previously suboptimal levels. In the Hosiery and
underwear category, sales were down 17% versus the prior year mainly reflecting the phase out of the Under Armour
business, less favourable mix and broader market weakness in the underwear category. Excluding the impact of the
Under Armour phase-out, sales for the Hosiery and underwear category increased by mid-single digits year over year.
Fiscal 2023 compared to fiscal 2022
Net sales for the year ended December 31, 2023 of $3,196 million, were down 1%, reflecting a decrease in Activewear
sales of 3%, partly offset by an increase in the Hosiery and underwear category of 11%. The decrease in Activewear sales
was primarily driven by lower sales volumes compared to the prior year where we saw stronger levels of distributor
inventory replenishment, partly offset by slightly higher net selling prices. While overall Activewear POS was soft for the
full year, we saw year over year POS trends for this category improve sequentially through the first three quarters of the
year, before stabilizing in the fourth quarter. International sales of $225 million were down 17% versus the prior year
period mainly due to the non-recurrence of prior year restocking in addition to distributors' cautious inventory management
throughout the year, in a challenged market. The increase in the Hosiery and underwear category, primarily reflected the
impact of higher unit sales volumes stemming from the expansion of our private label offering and the roll-out of new
underwear programs in the mass retail channel, as well as strength in hosiery. Additionally, even though industry-wide
demand remained weak for these categories, we benefited from a more favorable demand environment in comparison to
2022, along with the normalization of inventories at retailers.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 12
5.6.2 Gross profit/margin and adjusted gross profit/margin
Variation
2024-2023
Variation
2023-2022
(in $ millions, or otherwise indicated)
2024
2023
2022
Gross profit
1,003.7
880.1
992.4
123.6
(112.3)
Adjustments for:
Impact of strategic product line initiatives(1)
—
—
(1.0)
—
1.0
Net insurance gains(1)
—
(3.1)
(25.9)
3.1
22.8
Adjusted gross profit(2)
1,003.7
877.0
965.5
126.7
(88.5)
Gross margin
30.7 %
27.5 %
30.6 %
3.2 pp
(3.1) pp
Adjusted gross margin(2)
30.7 %
27.4 %
29.8 %
3.3 pp
(2.4) pp
(1) See subsection entitled "Certain adjustments to non-GAAP measures" for additional information on adjustments in section 16.0
"Definition and reconciliation of non-GAAP financial measures" in this MD&A.
(2) This is a non-GAAP financial measure or ratio. See section 16.0 "Definition and reconciliation of non-GAAP financial measures" in this
MD&A.
Certain minor rounding variances exist between the consolidated financial statements and this summary.
Gross profit is the result of our net sales less cost of sales. Gross margin reflects gross profit as a percentage of sales.
Our cost of sales includes all raw material costs, manufacturing conversion costs, including manufacturing depreciation
expense, sourcing costs, inbound freight and inter-facility transportation costs, and outbound freight to customers. Cost of
sales also includes the costs of purchased finished goods, costs relating to purchasing, receiving and inspection activities,
manufacturing administration, third-party manufacturing services, sales-based royalty costs, insurance, inventory write-
downs, and duties, as well as net insurance gains as described in note 16(f) to the audited consolidated financial
statements as at and for the year ended December 29, 2024. Our reporting of gross profit and gross margin may not be
comparable to these metrics as reported by other companies, since some entities include warehousing and handling costs
and/or exclude depreciation expense, outbound freight to customers, and royalty costs from cost of sales.
Fiscal 2024 compared to fiscal 2023
The increase in gross profit of $124 million versus the prior year, reflected the increase in sales and gross margin. Gross
margin of 30.7%, was up by 320 basis points year over year mainly a result of lower raw material and manufacturing input
costs, partly offset by slightly lower net selling prices.
Fiscal 2023 compared to fiscal 2022
The decrease in gross profit and non-GAAP adjusted gross profit in fiscal 2023 reflected lower sales and lower margins.
The decline in GAAP gross margin also reflected lower net insurance gains included in cost of sales compared to the prior
year (2023: $3 million, 2022: $26 million) which had a 70-basis point impact on margins. These net insurance gains
resulted from accrued insurance recoveries from the Company's claim for losses relating to the two hurricanes in Central
America in November 2020. Insurance gains in fiscal 2023 related to business interruption losses and are included in a
separate caption “Net Insurance Gains” in the Consolidated Statement of Earnings and Comprehensive Income. The
decline in both GAAP and adjusted gross margin also reflected the flow-through impact of peak fiber costs in our cost of
sales in fiscal 2023, and to a lesser extent higher manufacturing input costs including the impact of lower volumes, partly
offset by slightly higher net selling prices.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 13
5.6.3 Selling, general and administrative expenses (SG&A)
Variation
2024-2023
Variation
2023-2022
(in $ millions, or otherwise indicated)
2024
2023
2022
SG&A expenses
390.8
330.4
326.3
60.4
4.1
Adjustment for:
Costs relating to proxy contest and leadership
changes and related matters
82.7
6.3
—
76.4
6.3
Adjusted SG&A expenses(1)
308.1
324.1
326.3
(16.0)
(2.2)
SG&A expenses as a percentage of net sales
11.9 %
10.3 %
10.1 %
1.6 pp
0.2 pp
Adjusted SG&A expenses as a percentage of net
sales(1)
9.4 %
10.1 %
10.1 %
(0.7) pp
—
(1) This is a non-GAAP financial measure or ratio. See section 16.0 "Definition and reconciliation of non-GAAP financial measures" in this
MD&A.
Certain minor rounding variances exist between the consolidated financial statements and this summary.
Fiscal 2024 compared to fiscal 2023
SG&A expenses were $60 million above prior year levels, mainly reflecting higher expenses related to the proxy contest,
leadership changes and related matters detailed in the table above. Excluding these charges, adjusted SG&A expenses
were down $16 million, reflecting the benefit of the jobs credit introduced by Barbados earlier this year, partly offset by
higher variable compensation expenses and higher volume-driven distribution expenses. During the second quarter of
fiscal 2024, the Government of Barbados enacted a jobs credit, in order to foster economic activity and employment in
Barbados. The jobs credit was effective retroactively to January 1, 2024 and the Company recognized $41.8 million
(2023 - nil) during fiscal 2024 as a reduction of SG&A expenses (for purposes of adjusted SG&A expenses, $39.8 million
was recognized).
Fiscal 2023 compared to fiscal 2022
The $4 million increase in SG&A expenses in fiscal 2023 compared to fiscal 2022 was primarily due to the impact of the
CEO separation costs and related advisory fees on shareholder matters of $6 million and the impact of inflation on overall
costs, partially offset by the reversal of impairment of trade receivables, lower variable compensation expenses and the
benefit from our cost containment measures. On an adjusted basis, SG&A expenses decreased by $2 million and
adjusted SG&A expenses as percentage of sales came in line with prior year at 10.1%.
5.6.4 Gain on sale and leaseback and net insurance gains
During the first quarter of fiscal 2023, the Company entered into an agreement to sell and leaseback one of its distribution
centres located in the U.S. The proceeds of disposition were $51 million. The Company recognized a right-of-use asset of
$4 million and a lease obligation of $16 million. In addition, a pre-tax gain on sale of $25 million ($16 million after tax) was
recognized in the consolidated statements of earnings and comprehensive income in gain on sale and leaseback.
During the second quarter of fiscal 2023, the Company finalized an agreement with the insurer to close its insurance
claims related to the two hurricanes which occurred in Central America in November 2020, and received a final insurance
claims payment of $74 million, relating to the business interruption portion of its claims. This payment resulted in the
recognition of a corresponding gain in the Company’s consolidated statement of earnings and comprehensive income in
fiscal 2023.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 14
5.6.5 Restructuring and acquisition-related (recoveries) costs
Variation
2024-2023
Variation
2023-2022
(in $ millions)
2024
2023
2022
Employee termination and benefit costs
—
16.6
1.0
(16.6)
15.6
Exit, relocation and other costs
5.6
10.9
2.2
(5.3)
8.7
Net (gain) loss on disposal, write-downs and
accelerated depreciation of property, plant and
equipment, right-of-use assets, and software related
to exit activities
(10.9)
18.1
(3.3)
(29.0)
21.4
Acquisition-related transaction costs
—
—
0.6
—
(0.6)
Restructuring and acquisition-related (recoveries) costs
(5.3)
45.6
0.5
(50.9)
45.1
Certain minor rounding variances exist between the consolidated financial statements and this summary.
Restructuring and acquisition-related recoveries in fiscal 2024 related to the following: $2.6 million in net gains from the
sale of two previously closed yarn spinning facilities located in the United States, as well as the disposal of certain
equipment, $4.9 million in gains on disposals relating to the sublease of a closed distribution facility in the western United
States, and $2.2 million net losses mainly related to the completion of previously initiated restructuring activities.
Restructuring and acquisition-related costs in fiscal 2023 related to the following: $27.5 million primarily for the
consolidation and closure of manufacturing facilities in Central America in the second quarter of 2023, $11.4 million related
to the closure of a yarn-spinning facility in the U.S. in the fourth quarter of fiscal 2023, $3.7 million related to the December
2022 closure of a yarn-spinning plant in the U.S. and the exit cost from terminating a lease on a previously closed yarn
facility, and $3.2 million in other costs, including costs incurred to complete restructuring activities that were initiated in
fiscal 2022.
Restructuring and acquisition-related costs in fiscal 2022 related to the following: $5 million for the closure of a yarn-
spinning plant in the U.S, $2 million in accelerated depreciation of right-of-use assets relating to facilities no longer in use,
$1 million in employee termination and benefit costs related to the closure of a distribution center in the U.S., as well
$2 million related to the completion of previously initiated restructuring activities, partly offset by a gain of $6 million on
business dispositions, and a gain of $3 million on the sale of a former manufacturing facility in Mexico.
5.6.6 Impairment (Impairment reversal) of intangible assets, net of write downs
During fiscal 2024, based on the results of the impairment test performed on December 29, 2024, the estimated
recoverable amount for the Hosiery cash-generating unit (CGU) was in excess of its carrying value, and as such there
was no impairment identified for the year ended December 29, 2024 relating to intangible assets (both definite and
indefinite life) acquired in previous business acquisitions, as described in note 10 to the audited annual consolidated
financial statements for the year ended December 29, 2024.
During fiscal 2023, based on the results of the impairment test performed on December 31, 2023, the estimated
recoverable amount for the Hosiery cash-generating unit (CGU) was in excess of its carrying value, and as such the
Company recorded a non-cash impairment reversal of $41 million at December 31, 2023, relating to intangible assets
(both definite and indefinite life) acquired in previous business acquisitions. The events and circumstances that led to this
reversal included improved forecasted earnings, and the prevailing outlook for this category.
During fiscal 2022, based on the results of the impairment test performed on January 1, 2023, we recorded an impairment
charge for our hosiery cash-generating unit (CGU) of $62 million, relating to intangible assets (both definite and indefinite
life) acquired in previous business acquisitions. The impairment charge resulted from a decline in the fair value of the
Hosiery CGU, mainly due to the impact of the macroeconomic environment on market conditions at the time.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 15
5.6.7 Operating income and adjusted operating income
Variation
2024-2023
Variation
2023-2022
(in $ millions, or otherwise indicated)
2024
2023
2022
Operating income
618.2
643.9
603.4
(25.7)
40.5
Adjustments for:
Restructuring and acquisition-related (recoveries)
costs(1)
(5.3)
45.8
0.5
(51.1)
45.3
Impairment (Impairment reversal) of intangible
assets, net of write-downs(1)
—
(40.8)
62.3
40.8
(103.1)
Impact of strategic product line initiatives
—
—
(1.0)
—
1.0
Gain on sale and leaseback
—
(25.0)
—
25.0
(25.0)
Net insurance gains
—
(77.3)
(25.9)
77.3
(51.4)
Costs relating to proxy contest and leadership
changes and related matters
82.7
6.3
—
76.4
6.3
Adjusted operating income(2)
695.6
552.9
639.3
142.7
(86.4)
Operating margin
18.9 %
20.1 %
18.6 %
(1.2) pp
1.5 pp
Adjusted operating margin(2)
21.3 %
17.3 %
19.7 %
4.0 pp
(2.4) pp
(1) See subsection entitled "Certain adjustments to non-GAAP measures" for additional information on adjustments in section 16.0
"Definition and reconciliation of non-GAAP financial measures" in this MD&A.
(2) This is a non-GAAP financial measure or ratio. See section 16.0 "Definition and reconciliation of non-GAAP financial measures" in this
MD&A.
Certain minor rounding variances exist between the consolidated financial statements and this summary.
Fiscal 2024 compared to fiscal 2023
The decrease in operating income mainly reflected the non-recurrence of the favorable items that benefited 2023
described in the section below, and the significantly higher expenses for the proxy contest, leadership changes and
related matters in 2024, partly offset by the increase in gross profit. Adjusted operating income was up $143 million year
over year primarily driven by an increase in sales and a higher adjusted operating margin. The 400 basis point increase in
adjusted operating margin largely reflected a higher gross margin in the year, and lower adjusted SG&A expenses as a
percentage of net sales.
Fiscal 2023 compared to fiscal 2022
The increase in operating income mainly reflected the favorable impact from the reversal of a portion of a prior year non-
cash impairment charge for our Hosiery cash-generating unit (CGU) recorded in 2022, the higher insurance accounting
gains compared to the prior year and the gain on sale and leaseback partly offset by higher restructuring costs. On an
adjusted basis, we generated lower operating income which was driven primarily by the year-over-year decrease in sales
and lower adjusted operating margin. The decrease of 240 basis points on an adjusted operating margin basis largely
reflected gross margin pressure in the year.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 16
5.6.8 Financial expenses, net
Variation
2024-2023
Variation
2023-2022
(in $ millions)
2024
2023
2022
Interest expense on financial liabilities recorded at
amortized cost
80.3
53.4
25.7
26.9
27.7
Bank and other financial charges
22.2
22.3
10.5
(0.1)
11.8
Interest accretion on discounted lease obligation
4.8
3.4
3.1
1.4
0.3
Interest accretion on discounted provisions
0.4
0.4
—
—
0.4
Foreign exchange (gain) loss
(3.5)
0.2
(2.3)
(3.7)
2.5
Financial expenses, net
104.2
79.7
37.0
24.5
42.7
Certain minor rounding variances exist between the consolidated financial statements and this summary.
Fiscal 2024 compared to fiscal 2023
The increase in interest expense in fiscal 2024 compared to fiscal 2023 was mainly due to the impact of higher average
borrowing levels, with the Company repurchasing 17.7 million shares during the year, as well as the impact of higher
effective interest rates on our long-term debt bearing interest at variable rates. Foreign exchange gains and losses in both
periods relate primarily to the revaluation of net monetary assets denominated in foreign currencies.
The Company has entered into foreign exchange cross-currency swap contracts to hedge the exposure to foreign
currency exchange on the principal amount and interest payments of the senior unsecured Canadian notes. Accordingly,
the Company is not exposed to foreign exchange gains or losses on its senior unsecured Canadian notes.
Fiscal 2023 compared to fiscal 2022
The increase in interest expense in fiscal 2023 compared to fiscal 2022 was mainly due to the impact of higher effective
interest rates on our long-term debt bearing interest at variable rates, representing an increase of 210 basis points
compared to fiscal 2022, as well as higher average borrowing levels. The increase in bank and other financial charges
was mainly due to higher fees incurred for our receivables sale program, primarily relating to higher variable rates and to a
lesser extent increased volumes under this program. Foreign exchange gains and losses in both periods relate primarily to
the revaluation of net monetary assets denominated in foreign currencies.
5.6.9 Income taxes
The Company’s average effective tax rate is calculated as follows:
Variation
2024-2023
Variation
2023-2022
(in $ millions, or otherwise indicated)
2024
2023
2022
Earnings before income taxes
514.1
564.2
566.4
(50.1)
(2.2)
Income tax expense
113.2
30.6
24.9
82.6
5.7
Average effective income tax rate
22.0 %
5.4 %
4.4 %
16.6 pp
1.0 pp
Certain minor rounding variances exist between the consolidated financial statements and this summary.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 17
Variation
2024-2023
Variation
2023-2022
(in $ millions, or otherwise indicated)
2024
2023
2022
Income tax expense:
Tax expense excluding impact of Global Minimum
Tax ("GMT") and other items below
21.3
20.6
27.6
0.7
(7.0)
Impact of increase in corporate tax rate
47.5
—
—
47.5
—
Impact of GMT top-up tax
33.0
—
—
33.0
—
Income tax expense relating to restructuring charges
and other adjustments
0.5
10.0
7.2
(9.5)
2.8
Income tax recovery related to the revaluation of
deferred income tax assets and liabilities
—
—
(9.9)
—
9.9
Impact of Barbados tax rate changes on the
revaluation of deferred income tax assets and
liabilities
10.9
—
—
10.9
—
Total income tax expense
113.2
30.6
24.9
82.6
5.7
Adjustments for:
Income tax recovery (expense) relating to
restructuring charges and other adjustments
(0.5)
(10.0)
(7.2)
9.5
(2.8)
Income tax recovery related to the revaluation of
deferred income tax assets and liabilities
—
—
9.9
—
(9.9)
Impact of Barbados tax rate changes on the
revaluation of deferred income tax assets and
liabilities
(10.9)
—
—
(10.9)
—
Adjusted income tax expense(3)
101.8
20.6
27.6
81.2
(7.0)
Earnings before income taxes
514.1
564.2
566.4
(50.1)
(2.2)
Adjustments(1)(4)
77.4
(91.0)
35.9
168.4
(126.9)
Adjusted earnings before income taxes(3)
591.5
473.2
602.3
118.3
(129.1)
Average effective income tax rate(2)
22.0 %
5.4 %
4.4 %
16.6 pp
1.0 pp
Adjusted effective income tax rate(3)
17.2 %
4.4 %
4.6 %
12.8 pp
(0.2) pp
(1) See subsection entitled "Certain adjustments to non-GAAP measures" for additional information on adjustments in section 16.0
"Definition and reconciliation of non-GAAP financial measures" in this MD&A.
(2) Average effective income tax rate is calculated as income tax expense divided by earnings before income taxes.
(3) Adjusted income tax expense and adjusted earnings before income tax are non-GAAP financial measures, and adjusted effective
income tax rate is a non-GAAP ratio calculated as adjusted income tax expense divided by adjusted earnings before income taxes. See
section 16.0 "Definition and reconciliation of non-GAAP financial measures" in this MD&A.
(4) Adjustments for the fiscal year ended 2024 of $77.4 million include $82.7 million in costs relating to proxy contest and leadership
changes and related matters, partially offset by $5.3 million for restructuring and acquisition-related recoveries. Adjustments for the fiscal
year ended 2023 of $91.0 million (gain), consisting of $77.3 million of net insurance gains, a $25.0 million pretax gain on sale and
leaseback and a $40.8 million (gain) for the reversal of impairment of intangible assets, partially offset by $45.8 million (loss) for
restructuring and acquisition related costs, and $6.3 million (loss) relating to proxy contest and leadership changes and related matters.
Adjustments for fiscal 2022 of $35.9 million, include $62.3 million (loss) for the impairment of intangible assets, a $0.5 million (loss) for
restructuring and acquisition related costs, partially offset by $25.9 million in net insurance gains and $1.0 million for the impact of
strategic product line initiatives.
Certain minor rounding variances exist between the unaudited condensed interim consolidated financial statements and this summary.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 18
Fiscal 2024 compared to fiscal 2023
The increase in the income tax expense and average effective tax rate in fiscal 2024 compared to the prior year, is mainly
due to the impact of the enactment of GMT in Canada and the enactment of legislation in Barbados introducing certain tax
measures in response to the Global implementation of GMT. More specifically, during the second quarter of fiscal 2024,
Barbados increased its domestic corporate tax rate applicable to the Company from a sliding scale of 5.5% to 1% to a flat
rate of 9%, effective January 1, 2024. In addition, Barbados enacted a domestic minimum top-up tax that applies to the
Company effective January 1, 2024, resulting in a top-up tax on the Company’s subsidiaries in Barbados. The combined
result of these events is an effective tax rate of 15% in Barbados. During fiscal 2024, the Company recognized a current
tax expense of $48 million related to the increase in the Barbados corporate tax rate and a $33 million top-up tax on the
Company’s earnings in Barbados. In addition, the Company recorded a deferred income tax charge of $10.9 million for the
fiscal year ended December 29, 2024, for the revaluation of deferred tax assets and liabilities in Barbados as a result of
the increase in the Barbados corporate tax rate to 9%.
The average effective tax rate, on a GAAP basis, for 2024 of 22.0% is higher than the adjusted effective tax rate of 17.2%,
as the average rate on a GAAP basis included the impact of $82.7 million on charges incurred in Canada relating to the
proxy contest, leadership changes and related matters, whereby these charges did not yield any tax benefit in Canada. In
addition, the rate on a GAAP basis includes the impact of the $10.9 million deferred income tax charge noted above. The
adjusted effective tax rate of 17.2% excludes these two non-recurring items, and was reflective of the adjusted effective
tax rate that we expected for the 2024 full year, taking into account the new 15% effective tax rate for the Company’s
Barbados operations.
Disclosures relating to draft Global Minimum Tax legislation are included in section 5.4 entitled "Global Minimum Tax" of
this MD&A.
Fiscal 2023 compared to fiscal 2022
The income tax expense of $31 million in fiscal 2023 includes a $10 million tax charge mainly related to the gain on the
sale and leaseback of a distribution centre located in the U.S. The income tax expense in fiscal 2022 of $25 million
includes income tax expenses of $7 million relating to gains on asset disposals included within restructuring and
acquisition-related costs and $10 million in income tax recoveries relating to the re-recognition of previously de-recognized
deferred income tax assets that we expected to recover as a result of the Company's reassessment of the recoverability
of its U.S. deferred income tax assets. Excluding the impact of the aforementioned income tax recoveries and excluding
the pretax impact of impairment reversals and charges, restructuring and acquisition related costs, CEO separation costs
and related advisory fees on shareholder matters, insurance gains and the gain on the sale and leaseback transaction,
the average adjusted effective income tax rate for both years was comparable.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 19
5.6.10 Net earnings, adjusted net earnings, earnings per share measures, and adjusted earnings per share
Variation
2024-2023
Variation
2023-2022
(in $ millions, except per share amounts)
2024
2023
2022
Net earnings
400.9
533.6
541.5
(132.7)
(7.9)
Adjustments for:
Restructuring and acquisition-related (recoveries)
costs
(5.3)
45.8
0.5
(51.1)
45.3
Impairment (Impairment reversal) of intangible
assets, net of write-downs
—
(40.8)
62.3
40.8
(103.1)
Impact of strategic product line initiatives
—
—
(1.0)
—
1.0
Gain on sale and leaseback
—
(25.0)
—
25.0
(25.0)
Net insurance gains
—
(77.3)
(25.9)
77.3
(51.4)
Costs relating to proxy contest and leadership
changes and related matters
82.7
6.3
—
76.4
6.3
Income tax expense relating to the above-noted
adjustments
0.5
10.0
7.2
(9.5)
2.8
Income tax recovery related to the revaluation of
deferred income tax assets and liabilities(1)
—
—
(9.9)
—
9.9
Impact of Barbados tax rate changes on the
revaluation of deferred income tax assets and
liabilities
10.9
—
—
10.9
—
Adjusted net earnings(2)
489.7
452.6
574.7
37.1
(122.1)
Diluted EPS
2.46
3.03
2.93
(0.57)
0.10
Adjusted diluted EPS(2)
3.00
2.57
3.11
0.43
(0.54)
(1) Includes an income tax recovery of nil (2023 - nil, 2022 - $9.9 million) pursuant to the recognition of previously de-recognized (in fiscal
2018 and fiscal 2017 pursuant to the organizational realignment plan) deferred income tax assets as a result of a re-assessment of the
probability of realization of such deferred income tax assets.
(2) This is a non-GAAP financial measure or ratio. See section 16.0 "Definition and reconciliation of non-GAAP financial measures" in this
MD&A.
Certain minor rounding variances exist between the consolidated financial statements and this summary.
Fiscal 2024 compared to fiscal 2023
In fiscal 2024, the significant reduction in GAAP net earnings compared to the previous year was driven by the lower
operating income (reflecting the combined impact of various non-recurring net gains in 2023 and non-recurring charges in
2024 as noted above, which exceeded the impact of higher sales and gross margins) and increased financial expenses
and higher income tax expenses resulting from the implementation of GMT. Adjusted net earnings of $490 million was $37
million higher than 2023, with a $143 million increase in adjusted operating income being mostly offset by the higher
financial and income tax expense. GAAP diluted EPS were $2.46, down 19%, while adjusted diluted EPS increased by
17% to $3.00 from $2.57 in the prior year, with such increase reflecting the benefit of a lower outstanding share base.
Fiscal 2023 compared to fiscal 2022
In fiscal 2023, the slight decrease in GAAP net earnings compared to the previous year was primarily driven by increased
financial and income tax expenses, which more than offset the higher operating income. EPS increased to $3.03 reflecting
the impact of the Company's share repurchase program. The decline in adjusted net earnings was driven by both lower
adjusted operating income and increased financial expenses, partly offset by lower income tax expenses on an adjusted
basis.
5.7 Summary of quarterly results
The table below sets forth certain summarized unaudited quarterly financial data for the eight most recently completed
quarters. This quarterly information has been prepared in accordance with IFRS. The operating results for any quarter are
not necessarily indicative of the results to be expected for any future period.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 20
For the three months ended
(in $ millions, except share and per share amounts or
otherwise indicated)
Q4 2024
Q3 2024
Q2 2024
Q1 2024
Q4 2023
Q3 2023
Q2 2023
Q1 2023
Net sales
821.5
891.1
862.2
695.8
782.7
869.9
840.4
702.9
Net earnings
132.3
131.5
58.4
78.7
153.3
127.4
155.3
97.6
Net earnings per share
Basic(1)
0.86
0.82
0.35
0.47
0.89
0.73
0.87
0.54
Diluted(1)
0.86
0.82
0.35
0.47
0.89
0.73
0.87
0.54
Weighted average number of shares
outstanding (in ‘000s)
Basic
153,975 160,862 168,005 168,869 171,495 175,087 177,624 179,543
Diluted
154,369 161,027 168,139 168,977 171,806 175,348 177,902 179,843
(1) Quarterly EPS may not add to year-to-date EPS due to rounding.
Certain minor rounding variances exist between the consolidated financial statements and this summary.
5.7.1 Seasonality and other factors affecting the variability of results and financial condition
Our results of operations for interim and annual periods are impacted by the variability of certain factors, including, but not
limited to, changes in end-use demand and customer demand, our customers’ decisions to increase or decrease their
inventory levels, changes in our sales mix, and fluctuations in selling prices and raw material costs. While our products are
sold on a year-round basis, our business experiences seasonal changes in demand which result in quarterly fluctuations
in operating results. Although certain products have seasonal peak periods of demand, competitive dynamics may
influence the timing of customer purchases causing seasonal trends to vary somewhat from year to year. Historically,
demand for T-shirts is lowest in the fourth quarter and highest in the second quarter of the year, when distributors
purchase inventory for the peak summer selling season. Historically, demand for fleece is typically highest in advance of
the fall and winter seasons, in the second and third quarters of the year. Sales of hosiery and underwear are typically
higher during the second half of the year, during the back-to-school period and the Christmas holiday selling season.
These seasonal sales trends of our business also result in fluctuations in our inventory levels throughout the year.
Our results are also impacted by fluctuations in the price of raw materials and other input costs. Cotton and polyester
fibers are the primary raw materials used in the manufacture of our products, and we also use chemicals, dyestuffs, and
trims, which we purchase from a variety of suppliers. Cotton prices are affected by consumer demand and global supply,
which may be impacted by weather conditions in any given year, speculation on the commodities market, the relative
valuations and fluctuations of the currencies of producer versus consumer countries, and other factors that are generally
unpredictable. While we enter into purchase contracts and derivative financial instruments in advance of delivery to
establish firm prices for the cotton component of our yarn requirements, our realized cotton costs can fluctuate
significantly between interim and annual reporting periods. Energy costs in our results of operations are also affected by
fluctuations in crude oil, natural gas, and petroleum prices, which can also influence transportation costs and the cost of
related items used in our business, such as polyester fibers, chemicals, dyestuffs, and trims. Changes in raw material
costs are initially reflected in the cost of inventory and only impact net earnings when the respective inventories are sold.
Business acquisitions may affect the comparability of results. In addition, management decisions to consolidate or
reorganize operations, including the closure of facilities, may result in significant restructuring costs in an interim or annual
period. Subsection 5.6.5 entitled "Restructuring and acquisition-related costs" in this MD&A contains a discussion of costs
related to the Company’s restructuring actions and business acquisitions. Share repurchases have reduced our number
of shares outstanding and increased our net earnings per share (EPS). The effect of asset write-downs, including
allowances for expected credit losses, provisions for discontinued inventories, and impairments of long-lived assets can
also affect the variability of our results. In the fourth quarter of fiscal 2023, we recorded a reversal of impairment of
$41 million relating to our Hosiery cash-generating unit (CGU). Our results of operations for 2023 also include net
insurance gains resulting from accrued insurance recoveries for the Company’s claims for losses relating to the two
hurricanes in Central America in November 2020 (Q1 2023: $3.3 million and Q2 2023: $74 million), as well as a $16
million after-tax gain on the sale and leaseback of a distribution facility located in the United States in Q1 2023. Our
results of operations over the past five quarters have been impacted by higher than usual SG&A expenses, due to costs
relating to proxy contest and leadership changes and related matters (Q4 2023: $6.3 million, Q1 2024: $19.6 million,
Q2 2024 $57.1 million, Q3 2024 $5.5 million, and Q4 2024 $0.4 million), as explained in sections 5.6.3 and 16.0 of this
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 21
MD&A, partially offset by the favorable impact of Barbados jobs credit of $41.8 million in fiscal 2024. Our fiscal 2024
results of operations were also impacted by tax reforms, including the enactment of the OECD’s Pillar Two global
minimum tax regime in Canada and Barbados, as well as an increase in the applicable corporate tax rate in Barbados to
9%. The enactment of the global minimum tax increased the Company’s tax expense by $33 million, while the corporate
tax rate increase resulted in an additional tax expense of $58.4 million, bringing the total impact of these changes to
$91.4 million, as explained in sections 5.4 and 5.6.9 of this MD&A.
Our reported amounts for net sales, cost of sales, SG&A expenses, and financial expenses/income are impacted by
fluctuations in certain foreign currencies versus the U.S. dollar as described in the “Financial risk management” section of
this MD&A. The Company periodically uses derivative financial instruments to manage risks related to fluctuations in
foreign exchange rates.
5.8 Fourth quarter operating results
For the three months ended
December 29,
2024
December 31,
2023
(in $ millions, except per share amounts or otherwise indicated)
Variation $
Variation %
Net sales
821.5
782.7
38.8
5.0 %
Gross profit
253.0
236.6
16.4
6.9 %
Adjusted gross profit(1)
253.0
236.6
16.4
6.9 %
SG&A expenses
78.3
88.3
(10.0)
(11.3) %
Adjusted SG&A expenses(1)
77.9
82.0
(4.1)
(5.0) %
Restructuring and acquisition-related (recoveries) costs
(4.3)
10.9
(15.2)
n.m.
Impairment (Impairment reversal) of intangible assets
—
(40.8)
40.8
n.m.
Operating income
179.0
178.1
0.8
0.5 %
Adjusted operating income(1)
175.1
154.6
20.5
13.3 %
Adjusted EBITDA(1)
208.4
185.4
23.0
12.4 %
Financial expenses
26.9
21.2
5.7
26.8 %
Income tax expense
19.7
3.6
16.1
n.m.
Net earnings
132.3
153.3
(21.0)
(13.7) %
Adjusted net earnings(1)
128.2
129.2
(1.0)
(0.8) %
Basic EPS
0.86
0.89
(0.03)
(3.4) %
Diluted EPS
0.86
0.89
(0.03)
(3.4) %
Adjusted diluted EPS(1)
0.83
0.75
0.08
10.7 %
Gross margin
30.8 %
30.2 %
n/a
0.6 pp
Adjusted gross margin(1)
30.8 %
30.2 %
n/a
0.6 pp
SG&A expenses as a percentage of net sales
9.5 %
11.3 %
n/a
(1.8) pp
Adjusted SG&A expenses as a percentage of net sales(1)
9.5 %
10.5 %
n/a
(1.0) pp
Operating margin
21.8 %
22.8 %
n/a
(1.0) pp
Adjusted operating margin(1)
21.3 %
19.7 %
n/a
1.6 pp
Diluted weighted average number of common shares
outstanding (in ‘000s)
154,369
171,806
n/a
n/a
n.m. = not meaningful
n/a = not applicable
(1) This is a non-GAAP financial measure or ratio. See section 16.0 "Definition and reconciliation of non-GAAP financial measures" in this
MD&A.
Certain minor rounding variances exist between the consolidated financial statements and this summary.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 22
Net sales by major product group were as follows:
Three months ended
(in $ millions, or otherwise indicated)
December
29, 2024
December
31, 2023
Variation
($)
Variation
(%)
Activewear
714.1
644.0
70.2
10.9 %
Hosiery and underwear
107.4
138.7
(31.4)
(22.6) %
821.5
782.7
38.8
5.0 %
Certain minor rounding variances exist between the consolidated financial statements and this summary.
Net sales were derived from customers located in the following geographic areas:
Three months ended
(in $ millions, or otherwise indicated)
December
29, 2024
December
31, 2023
Variation
($)
Variation
(%)
United States
730.6
699.5
31.1
4.4 %
Canada
26.5
29.7
(3.2)
(10.7) %
International
64.4
53.5
10.9
20.3 %
821.5
782.7
38.8
5.0 %
Certain minor rounding variances exist between the consolidated financial statements and this summary.
Net sales were $822 million, up 5% over the prior year. Excluding the impact of the Under Armour phase-out, net sales
were up low double digits. Activewear sales of $714 million, were up 11% driven by higher sales volumes. We saw positive
POS across channels and product lines and continued to capture market share in key growth categories. Furthermore, we
saw continued POS strength with National Account customers, driven by our competitive positioning and as we continue
to benefit from recent changes in the industry landscape. International sales increased by 20% year over year. In addition
to higher year over year sell-through in certain international markets, distributors continued to replenish inventory. In the
Hosiery and underwear category, net sales were down 23% versus the prior year, as expected, mainly owing to the phase
out of the Under Armour business. Excluding the impact of the Under Armour phase-out, sales for the Hosiery and
underwear category were up high single digits in the fourth quarter.
We generated gross profit of $253 million, or 30.8% of sales, versus $237 million, or 30.2% in the prior year representing
a 60-basis points improvement which was primarily driven by lower raw material costs.
SG&A expenses were $78 million compared to $88 million in the prior year. Adjusting for charges related to the proxy
contest and leadership changes, adjusted SG&A expenses were $78 million, or 9.5% of net sales, compared to $82
million or 10.5% of net sales for the same period last year. The year over year reduction reflected the positive benefit of
the jobs credit introduced by Barbados earlier this year partly offset by higher variable compensation expenses and higher
volume-driven distribution expenses.
The Company generated operating income of $179 million, or 21.8% of net sales versus $178 million, or 22.8% of net
sales for the same period last year, with the benefit of higher gross profit and lower SG&A expenses and lower
restructuring expenses being offset by the non-recurrence of the 2023 reversal of impairment. Adjusted operating income
was $175 million, or 21.3% of net sales, up $21 million or 160 basis points compared to the prior year, reflecting the higher
sales and gross margins, and the decrease in adjusted SG&A expenses.
Net financial expenses of $27 million, were up $6 million versus the prior year due to higher interest rates and higher
borrowing levels with the Company repurchasing over 4 million shares in the quarter. Reflecting the impact of the
enactment of Global Minimum Tax (GMT) in Canada and Barbados, the Company's effective income tax rate was 13.0%
versus 2.3% last year, and the adjusted effective income tax rate1 for the quarter was 13.4% versus 3.1% last year.
Net earnings of $132 million were down $21 million versus the prior year, due to the higher financial and income tax
expenses, while adjusted net earnings were essentially flat versus 2023, as higher adjusted operating income was offset
by higher financial and income tax expenses. After reflecting the positive benefit of a lower outstanding share base, GAAP
diluted EPS were $0.86, down 3% versus the prior year, while adjusted diluted EPS were $0.83 compared to $0.75 last
year, up 11% year over year.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 23
6.0 FINANCIAL CONDITION
6.1 Current assets and current liabilities
December 29,
2024
December 31,
2023
(in $ millions)
Variation
Cash and cash equivalents
98.8
89.6
9.2
Trade accounts receivable
542.4
412.5
129.9
Inventories
1,110.6
1,089.4
21.2
Prepaid expenses, deposits and other current assets
107.0
96.0
11.0
Accounts payable and accrued liabilities
(490.1)
(408.3)
(81.8)
Current portion of lease obligations
(17.7)
(14.2)
(3.6)
Income taxes payable
(29.7)
(1.6)
(28.0)
Current portion of long-term debt
(300.0)
(300.0)
—
Total working capital(1)
1,021.3
963.4
57.9
Current ratio(2)
2.2
2.3
n.m.
n.m. = not meaningful
(1) This is a non-GAAP financial measure or ratio. See section 16.0 "Definition and reconciliation of non-GAAP financial measures" in this
MD&A.
(2) Current ratio is defined as current assets divided by current liabilities.
Certain minor rounding variances exist between the consolidated financial statements and this summary.
•
The increase in trade accounts receivable (which are net of accrued sales discounts) compared to the end of fiscal
2023 was mainly due to the impact of higher days sales outstanding (DSO) as a result of longer payment terms, as
well as higher net sales compared to the fourth quarter of 2023.
•
The slight increase in inventories during fiscal 2024 was mainly due to a slight increase in inventory volumes, offset
by a decrease in average unit costs.
•
The increase in accounts payable and accrued liabilities is mainly due to the impact of higher purchase volumes,
higher days of purchases in payables, as well as higher accruals for variable compensation expenses.
•
The increase in income taxes payable is mainly due to the impact of GMT, partially offset by higher tax installment
payments and other offsets.
•
Working capital was $1,021 million as at December 29, 2024, compared to $963 million as at December 31, 2023.
The current ratio at the end of fiscal 2024 was 2.2 compared to 2.3 at the end of fiscal 2023.
6.2 Property, plant and equipment, right-of-use assets, intangible assets, and goodwill
Property, plant
Right-of-use
Intangible
(in $ millions)
and equipment
assets
assets
Goodwill
Balance, December 31, 2023
1,174.5
81.4
261.4
271.7
Additions
142.5
34.9
5.1
—
Depreciation and amortization
(111.1)
(14.1)
(13.2)
—
Net carrying amounts of disposals, write-downs and
impairments
(32.7)
(6.6)
—
—
Balance, December 29, 2024
1,173.2
95.6
253.3
271.7
Certain minor rounding variances exist between the consolidated financial statements and this summary.
•
The slight decrease in property, plant and equipment reflects the impact of depreciation, and the sale of two former
yarn spinning facilities located in the U.S., largely offset by capital expenditures related to the expansion of textile and
sewing manufacturing operations, as well as modernization of the yarn facilities obtained through the acquisition of
Frontier Yarns in December 2021.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 24
•
The increase in right-of-use assets mainly reflects increases from manufacturing and distribution facility lease
renewals entered into during 2024, partially offset by the impact of depreciation, as well as disposals mainly for a
closed distribution facility in the western U.S (refer to subsection 5.6.5 Restructuring and acquisition-related costs
(recoveries) for additional information).
•
Intangible assets are comprised of customer contracts and relationships, trademarks, license agreements, non-
compete agreements, and computer software. The decrease in intangible assets mainly reflects the amortization of
$13 million.
6.3 Other non-current assets and non-current liabilities
December 29,
2024
December 31,
2023
(in $ millions)
Variation
Deferred income tax assets
21.8
24.0
(2.2)
Other non-current assets
40.8
14.3
26.5
Long-term debt
(1,235.9)
(685.0)
(550.9)
Lease obligations
(99.7)
(83.9)
(15.8)
Deferred income tax liabilities
(28.6)
(18.1)
(10.5)
Other non-current liabilities(1)
(56.8)
(46.3)
(10.5)
(1) Other non-current liabilities include provisions, employee benefit obligations and derivative financial instruments.
Certain minor rounding variances exist between the consolidated financial statements and this summary.
•
See section 8.0 entitled “Liquidity and capital resources” in this MD&A for the discussion on long-term debt.
•
Other non-current assets includes the impact of a sublease asset for a closed distribution facility in the western
United States, as well as the non-current portion of accrued Barbados jobs credit.
•
The increase in lease obligations mainly reflects the impact of manufacturing and distribution facility lease renewals
entered into during 2024, partially offset by the impact of payments made during the year.
•
The net increase in deferred income tax liabilities is mainly due to the revaluation of deferred tax assets and liabilities
resulting from the increase in the Barbados statutory tax rate, as explained in section 5.6.9 Income taxes in this
MD&A.
•
Other non-current liabilities include provisions, employee benefit obligations and certain derivative financial
instrument liabilities. The increase is mainly due to the fair value of derivative financial instrument liabilities relating to
cross-currency debt and interest rate swap contracts entered into during the fourth quarter of 2024.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 25
7.0 CASH FLOWS
7.1 Cash flows from (used in) operating activities
(in $ millions)
2024
2023
Variation
Net earnings
400.9
533.6
(132.7)
Adjustments for:
Depreciation and amortization
138.2
121.6
16.6
Non-cash restructuring (recoveries) costs related to property, plant and
equipment, right-of-use assets, and computer software
(10.9)
18.1
(29.0)
Impairment (Impairment reversal) of intangible assets, net of write-downs
—
(40.8)
40.8
Cash settled share-based awards in connection with outgoing executives'
termination benefits
(15.4)
—
(15.4)
Gain on disposal of PP&E and right-of-use assets
(0.2)
(24.6)
24.4
Share-based compensation
64.5
27.0
37.5
Deferred income taxes
12.7
10.1
2.6
Other
(22.4)
(14.0)
(8.4)
Changes in non-cash working capital balances
(65.9)
(84.5)
18.6
Cash flows from operating activities
501.5
546.5
(45.0)
Certain minor rounding variances exist between the consolidated financial statements and this
•
Operating cash flows for fiscal 2024 were negatively impacted by cash outlays of approximately $75 million related to
the proxy contest and leadership changes, while operating cash flows for fiscal 2023 were positively impacted by
proceeds relating to the finalization of the Company’s insurance claim of $74 million. The overall decrease in cash
flows in operating activities of $45 million reflects the combined impact of these non-recurring items ($149 million year
over year decrease in operating cash flow), partially offset by improved cash flows resulting from higher adjusted net
earnings and a slightly lower increase in non-cash working capital balances compared to last year.
•
The net increase in non-cash working capital was $66 million in fiscal 2024, compared to a net increase of $84 million
during fiscal 2023. The lower increase in working capital compared to last year was mainly due to an increase in
accounts payable and accrued liabilities and income taxes payable compared to decreases in the same period last
year, which was mostly offset by the non recurrence of a large decrease in inventories last year.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 26
7.2 Cash flows from (used in) investing activities
(in $ millions)
2024
2023
Variation
Purchase of property, plant and equipment
(145.3)
(203.3)
58.0
Purchase of intangible assets
(5.0)
(4.7)
(0.3)
Business dispositions (acquisitions)
—
—
—
Proceeds from sale and leaseback, disposal of assets held for sale and other
disposals of PP&E
38.2
53.2
(15.0)
Cash flows used in investing activities
(112.1)
(154.8)
42.7
Certain minor rounding variances exist between the consolidated financial statements and this summary.
•
The decrease in cash flows used in investing activities in fiscal 2024 was mainly due to planned lower capital
expenditures compared to last year, partially offset by lower proceeds from asset disposals.
•
Capital expenditures1 during fiscal 2024 are described in section 6.2 of this MD&A entitled "Property, plant and
equipment, right-of-use assets, intangible assets, and goodwill", and our projected capital expenditures for the next
fiscal year are discussed in section 8.0 entitled “Liquidity and capital resources” in this MD&A.
7.3 Free cash flow
(in $ millions)
2024
2023
Variation
Cash flows from operating activities
501.4
546.6
(45.2)
Cash flows used in investing activities
(112.1)
(154.9)
42.8
Adjustment for:
Business (dispositions) acquisitions
—
—
—
Free cash flow(1)
389.3
391.7
(2.4)
(1) This is a non-GAAP financial measure or ratio. See section 16.0 "Definition and reconciliation of non-GAAP financial measures" in
this MD&A.
Certain minor rounding variances exist between the consolidated financial statements and this summary.
•
For fiscal 2024, the year-over-year slight decrease in free cash flow of $2 million was mainly due to the $45 million
decrease in operating cash flows (as explained in section 7.1 of this MD&A entitled "Cash flows from (used in)
operating activities"), partially offset by the changes in cash flows used in investing activities of $43 million (as
explained in section 7.2 of this MD&A entitled "Cash flows from (used in) investing activities").
1 Capital expenditures include purchases of property, plant and equipment and intangible assets.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 27
7.4 Cash flows from (used in) financing activities
(in $ millions)
2024
2023
Variation
Decrease in amounts drawn under revolving long-term bank credit facility
(235.0)
(95.0)
(140.0)
Proceeds from term loan
300.0
—
300.0
Payment of notes
—
(150.0)
150.0
Proceeds from issuance of Senior unsecured notes
500.0
—
500.0
Proceeds from delayed draw term loan
—
300.0
(300.0)
Payment of lease obligations
(15.2)
(24.9)
9.7
Dividends paid
(133.5)
(131.8)
(1.7)
Proceeds from the issuance of shares
6.9
55.1
(48.2)
Repurchase and cancellation of shares
(755.6)
(360.5)
(395.1)
Share repurchases for settlement of non-Treasury RSUs
(27.7)
(26.2)
(1.5)
Withholding taxes paid pursuant to the settlement of non-Treasury RSUs
(19.2)
(19.5)
0.3
Cash flows used in financing activities
(379.3)
(452.8)
73.5
Certain minor rounding variances exist between the consolidated financial statements and this summary.
•
Cash flows used in financing activities for fiscal 2024 mainly reflected the repurchase and cancellation of common
shares under NCIB programs as discussed in section 8.5 of this MD&A, and the payment of dividends, partially offset
by net cash inflows relating to long-term debt. See section 8.0 of this MD&A entitled “Liquidity and capital resources”
for the discussion on long-term debt.
•
Cash flows used in financing activities for fiscal 2023 mainly reflected the repurchase and cancellation of common
shares under NCIB programs, the payment of dividends, and payments made during the period on lease obligations,
partially offset by net long-term debt proceeds and proceeds from the issuance of shares relating to the exercise of
employee stock options.
8.0 LIQUIDITY AND CAPITAL RESOURCES
8.1 Capital allocation framework
Historically, our primary uses of funds have been for working capital requirements, capital expenditures, business
acquisitions, and the payment of dividends and share repurchases, which we have funded with cash generated from
operations and with funds drawn from our long-term debt facilities. We have established a capital allocation framework
intended to enhance sales and earnings growth as well as shareholder returns. After funding working capital needs, our
first priority of cash use is to fund our organic growth with the required capital investments. Beyond these requirements,
our next priorities for capital allocation are to support our dividends and for opportunistic complementary acquisitions with
a preference towards opportunities that could enhance our supply chain model. In addition, we have used excess cash to
repurchase shares under normal course issuer bid programs.
The Company has set a fiscal year-end net debt leverage target ratio2 of 1.5 to 2.5 times pro-forma adjusted EBITDA for
the trailing twelve months (previously 1.5 to 2.0 times), which it believes will provide an efficient capital structure and a
framework within which it can execute on its capital allocation priorities. We expect that cash flows from operating
activities and the unutilized financing capacity under our long-term debt facilities, as well as our ability to obtain additional
debt financing if required, will continue to provide us with sufficient liquidity to fund our organic growth strategy, including
anticipated working capital requirements and projected capital expenditures (which are currently planned to be at levels
close to 5% of net sales during the next three years), as well as for returning capital to shareholders through dividends
and continued share repurchases in line with our leverage framework and value considerations. Refer to note 25 of the
audited annual consolidated financial statements for the year ended December 29, 2024 for an update on the Company’s
liquidity risk.
2 This is a non-GAAP financial ratio. See section 16.0 "Definition and reconciliation of non-GAAP financial measures" in this MD&A.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 28
8.2 Long-term debt and net debt and net debt leverage ratio
The Company's long-term debt as at December 29, 2024 is described below.
Effective
interest
rate (1)
Principal amount
Maturity date
(in $ millions, or otherwise indicated)
December 29,
2024
December 31,
2023
Non-current portion of long-term debt
Revolving long-term bank credit facility, interest at variable
U.S. interest rate(2)(3)
6.6%
—
235.0
March 2027
Senior unsecured Canadian notes, Series 1, interest at fixed
rate of 4.36%, payable semi-annually
5.5%
347.1
—
November 2029
Senior unsecured Canadian notes, Series 2, interest at fixed
rate of 4.71%, payable semi-annually
5.8%
138.8
—
November 2031
Term loan, interest at variable U.S. interest rate, payable
monthly(2)(4)
4.7%
300.0
300.0
June 2026
Term loan facility, interest at variable U.S. interest rate,
payable monthly(5)
6.4%
300.0
—
August 2029
Notes payable, interest at fixed rate of 2.91%, payable semi-
annually(6)
2.9%
100.0
100.0
August 2026
Notes payable, interest at Adjusted SOFR plus a spread of
1.57%, payable quarterly(6)(7)
2.9%
50.0
50.0
August 2026
1,235.9
685.0
Current portion of long-term debt
Delayed draw term loan (DDTL), interest at variable U.S.
interest rate, payable monthly(2)(4)(8)
6.9%
300.0
300.0
May 2025
300.0
300.0
Long-term debt
1,535.9
985.0
(1) Represents the annualized effective interest rate for the year ended December 29, 2024, including the cash impact of interest rate
swaps, where applicable.
(2) Secured Overnight Financing Rate (SOFR) advances at adjusted Term SOFR (includes a 0% to 0.25% reference rate adjustment)
plus a spread ranging from 1% to 3%.
(3) The Company’s committed unsecured revolving long-term bank credit facility of $1 billion provides for an annual extension which is
subject to the approval of the lenders. The spread added to the adjusted Term SOFR is a function of the total net debt to EBITDA ratio (as
defined in the credit facility agreement and its amendments). In addition, an amount of $10.8 million (December 31, 2023 - $36.0 million)
has been committed against this facility to cover various letters of credit.
(4) The unsecured term loan is non-revolving and can be prepaid in whole or in part at any time with no penalties. The spread added to
the adjusted Term SOFR is a function of the total net debt to EBITDA ratio (as defined in the term loan agreements and its amendments).
(5) The term loan facility can be prepaid in whole or in part at any time with no penalties. U.S. Base Rate Advances at U.S. Base rates or
SOFR advances at adjusted Term SOFR (includes a 0.10% reference rate adjustment) plus a spread ranging from 1% to 2% based on
the Company's total net debt to EBITDA ratio (as defined in the term loan agreement).
(6) The unsecured notes issued to accredited investors in the U.S. private placement market can be prepaid in whole or in part at any
time, subject to the payment of a prepayment penalty as provided for in the note purchase agreement.
(7) Adjusted SOFR rate is determined on the basis of floating rate notes that bear interest at a floating rate plus a spread of 1.57%.
(8) On May 26, 2023, the Company amended its $300 million term loan to include an additional $300 million delayed draw term loan
("DDTL") with a one year maturity from the effective date. All other terms of the agreement remained unchanged.
On November 22, 2024, the Company issued 4.362% Series 1 senior unsecured notes ("Series 1 notes") with a principal
amount of $500 million in Canadian dollars ($357.1 million in U.S. dollars), which mature on November 22, 2029.
Additionally, on the same date, the Company issued 4.711% Series 2 senior unsecured notes ("Series 2 notes") with a
principal amount of $200 million in Canadian dollars ($142.9 million in U.S. dollars), which mature on November 22, 2031.
The notes were offered in Canada on a private placement basis.
The Series 1 notes and Series 2 notes have been hedged for foreign currency fluctuations through cross currency
principal and interest rate swaps, which serves to lock in the combined principal at US$500 million. Interest on these
senior unsecured Canadian notes is payable semi-annually. Refer to note 14, Financial instruments, of the annual
consolidated financial statements for additional information.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 29
On August 30, 2024, the Company entered into an unsecured committed five-year term loan agreement for a total
principal amount of $300 million. The term loan is non-revolving and provides for a spread added to the adjusted Term
SOFR based on the total net debt to EBITDA ratio (as defined in the term loan agreement).
On May 26, 2023, the Company amended its other $300 million term loan to include an additional $300 million delayed
draw term loan ("DDTL") with a one year maturity from the effective date. All other terms of the agreement remained
unchanged. The proceeds of this term loan were in part used to pay the $150 million of U.S. private placement notes
payable that matured in August 2023.
The Company was in compliance with all financial covenants as at December 29, 2024. The Company expects to
maintain compliance with its covenants over the next twelve months, based on its current expectations and forecasts.
(in $ millions)
December 29,
2024
December 31,
2023
Long-term debt (including current portion)
1,535.9
985.0
Bank indebtedness
—
—
Derivative financial instrument liabilities on Canadian Senior unsecured notes
14.1
—
Lease obligations (including current portion)
117.4
98.1
Total debt(1)
1,667.4
1,083.1
Cash and cash equivalents
(98.8)
(89.6)
Net debt(1)
1,568.6
993.5
(1) This is a non-GAAP financial measure or ratio. See section 16.0 "Definition and reconciliation of non-GAAP financial measures" in this
MD&A.
Certain minor rounding variances exist between the consolidated financial statements and this summary.
The primary measure used by the Company to monitor its financial leverage is its net debt leverage ratio as defined in
section 16.0 "Definition and reconciliation of non-GAAP financial measures" in this MD&A. The Company’s net debt
leverage ratio as at December 29, 2024, was 1.9 times (December 31, 2023 - 1.5 times) which was within the Company's
target range of 1.5 times to 2.5 times. The Company’s net debt leverage ratio is calculated as follows:
December 29,
2024
December 31,
2023
(in $ millions, or otherwise indicated)
Adjusted EBITDA for the trailing twelve months(1)
833.8
674.5
Adjustment for:
Business acquisitions
—
—
Pro-forma adjusted EBITDA for the trailing twelve months(1)
833.8
674.5
Net debt(1)
1,568.6
993.4
Net debt leverage ratio(1)(2)
1.9
1.5
(1) This is a non-GAAP financial measure or ratio. See section 16.0 "Definition and reconciliation of non-GAAP financial measures" in this
MD&A.
(2) The Company's net debt to EBITDA ratio for purposes of its term loans and revolving facility was 2.0 and for purposes of U.S. private
placement notes was 2.2x at December 29, 2024.
Certain minor rounding variances exist between the consolidated financial statements and this summary.
The total net debt to EBITDA ratios (as defined in the credit facility agreement and its amendments, and in the U.S. private
placement note agreement) vary from the definition of the Company’s non-GAAP ratio and non-GAAP financial measures
“net debt leverage ratio” and “adjusted EBITDA”, respectively, as presented in this MD&A in certain respects. The
definitions in the loan and note agreements are based on accounting for all leases in accordance with previous accounting
principles whereby the Company’s leases for premises were accounted for as operating leases, while the Company’s
reported net debt leverage ratio reflects lease accounting in accordance with the Company’s current accounting policies.
In addition, adjustments permitted to EBITDA in the loan and note agreements vary from the adjustments used by the
Company in calculating its adjusted EBITDA non-GAAP financial measure. As a result of these differences, our total net
debt to EBITDA ratio for purposes of our term loans and revolving facility was 2.0x (2023 - 1.6x), and for purposes of our
U.S. private placement note agreements was 2.2x at the end of fiscal 2024 (2023 - 1.4x).
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 30
The Company, upon approval from its Board of Directors, may issue or repay long-term debt, issue or repurchase shares,
or undertake other activities as deemed appropriate under the specific circumstances.
8.3 Outstanding share data
Our common shares are listed on the New York Stock Exchange (NYSE) and the Toronto Stock Exchange (TSX) under
the symbol GIL. As at February 17, 2025, there were 151,851,182 common shares issued and outstanding along with
282,737 stock options and 1,568,820 dilutive restricted share units (Treasury RSUs) outstanding. Each stock option
entitles the holder to purchase one common share at the end of the vesting period at a pre-determined exercise price.
Each Treasury RSU entitles the holder to receive one common share from treasury at the end of the vesting period,
without any monetary consideration being paid to the Company. Treasury RSUs are primarily used as part of special long-
term plans, to attract candidates or for retention purposes, and their vesting conditions, including any performance
objectives, and are determined by the Board of Directors at the time of grant.
8.4 Declaration of dividend
The Company paid dividends of $133.5 million during the year ended December 29, 2024. On February 18, 2025, the
Board of Directors approved a 10% increase in the amount of the current quarterly dividend and declared a cash dividend
of $0.226 per share for an expected aggregate payment of $34 million which will be paid on April 7, 2025, on all of the
issued and outstanding common shares of the Company, rateably and proportionately, to the holders of record on
March 12, 2025. This dividend is an “eligible dividend” for the purposes of the Income Tax Act (Canada) and any other
applicable provincial legislation pertaining to eligible dividends.
As part of the Company's capital allocation framework as described in section 8.1 of this MD&A, the Board of Directors
considers several factors when deciding to declare quarterly cash dividends, including the Company’s present and future
earnings, cash flows for working capital requirements, capital expenditures, debt covenant and repayment obligations,
capital requirements, the macro-economic environment, and present and/or future regulatory and legal restrictions.
The Company's dividend payout policy and the declaration of dividends are subject to the discretion of the Board of
Directors and, consequently, there can be no assurances that Gildan's dividend policy will be maintained or that dividends
will be declared in respect of any quarter or other future periods. The declaration of dividends by the Board of Directors is
ultimately dependent on the Company’s operations and financial results which are, in turn, subject to various assumptions
and risks, including those set out in this MD&A.
8.5 Normal course issuer bid (NCIB)
In August 2023, the Company received approval from the TSX to renew its NCIB program commencing on
August 9, 2023, to purchase for cancellation a maximum of 8,778,638 common shares, representing approximately 5% of
the Company's issued and outstanding common shares, as at July 31, 2023 (the reference date for the renewed NCIB).
The Company was authorized to make purchases under the NCIB until August 8, 2024 in accordance with the
requirements of the TSX. On May 29, 2024, the Company announced that it had received approval from the TSX to
amend its NCIB in order to increase the maximum number of common shares that may be repurchased to 17,124,249
common shares, representing 10% of the public float as at July 31, 2023.
On July 31, 2024, the Company received approval from the TSX to renew its NCIB program commencing on August 9,
2024, to purchase for cancellation a maximum of 16,106,155 common shares, representing approximately 10% of the
Company's public float, as at July 26, 2024 (the reference date for the renewed NCIB). The Company is authorized to
make purchases under the renewed NCIB until August 8, 2025, in accordance with the requirements of the TSX.
Purchases will be made by means of open market transactions on both the TSX and the New York Stock Exchange
(NYSE), or alternative U.S. or Canadian trading systems if eligible, or by such other means as may be permitted by
securities regulatory authorities, including pre-arranged crosses, exempt offers, private agreements under an issuer bid
exemption order issued by securities regulatory authorities and block purchases of common shares. In accordance with
the requirements of the TSX, the Company may purchase, in addition to purchases made on other exchanges including
the NYSE, up to a maximum of 80,209 common shares daily through the facilities of the TSX, which represents 25% of
the ADTV for the most recently completed six-month period noted above.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 31
In connection with each of its 2023-2024 and 2024-2025 NCIB programs, the Company entered into an automatic share
purchase plan (ASPP) with a designated broker which allows for the purchase of common shares under the NCIB at times
when the Company would ordinarily not be permitted to purchase its common shares due to regulatory restrictions or self-
imposed trading blackout periods.
A share buyback tax of 2% was enacted in Canada during the second quarter of 2024, with an effective date of January 1,
2024, and the Company has prospectively applied this tax on its share repurchases in 2024. The share buyback tax is
charged to retained earnings.
During the fiscal year ended December 29, 2024, the Company repurchased for cancellation a total of 17,735,095
common shares under its NCIB programs (of which 9,157,507 common shares were purchased under the 2024-2025
program) for a total cost of $761.5 million (including $14.9 million of share buyback tax); $30 million was charged to share
capital and the balance was charged to retained earnings.
9.0 LEGAL PROCEEDINGS
9.1 Claims and litigation
The Company is a party to claims and litigation arising in the normal course of operations. The Company does not expect
the resolution of these matters to have a material adverse effect on the financial position or results of operations of the
Company.
We record a liability when we believe that it is both probable that a liability has been incurred and the amount of loss can
be reasonably estimated. Significant judgment is required to determine both the probability of having incurred a liability
and the estimated amount of the liability. We review these matters at least quarterly and adjust these liabilities to reflect
the impact of negotiations, settlements, rulings, advice of legal counsel and other updated information and events,
pertaining to a particular case.
10.0 FINANCIAL RISK MANAGEMENT
The Company is exposed to risks arising from financial instruments, including credit risk, liquidity risk, foreign currency
risk, interest rate risk, commodity price risk, as well as risks arising from changes in the price of our common shares under
our share-based compensation plans. Please refer to note 25 of the audited annual consolidated financial statements for
the year ended December 29, 2024 for additional details.
10.1 Off-balance sheet arrangements and maturity analysis of contractual obligations
In the normal course of business, we enter into contractual obligations that will require us to disburse cash over future
periods. Our material short-term cash requirements include payments under our lease obligations, purchase obligations;
related to capital expenditures, cotton commitments as well as raw material and finished goods inventory, and other
working capital needs. Working capital, defined as total current assets less total current liabilities, fluctuates depending on
effective management of receivables from our customers, inventory levels and payables to our suppliers, as well as
commodity pricing.
Our long-term material cash requirements from currently known obligations include repayment of outstanding borrowings,
interest payment obligations under our credit agreement, yarn purchases, settlements on our outstanding derivative hedge
contracts, long term lease obligations, as well as minimum royalty payments.
All commitments have been reflected in our consolidated statements of financial position except for purchase obligations,
as well as minimum royalty payments, which are included in the table of contractual obligations below. We have no off-
balance sheet arrangements, other than as discussed in this section. The following table sets forth the maturity of our
contractual obligations by period as at December 29, 2024.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 32
Carrying
Contractual Less than
Between 1
Between 4
More than
(in $ millions)
amount
cash flows
1 year and 3 years
and 5 years
5 years
Accounts payable and accrued liabilities
490.1
490.1
490.1
—
—
—
Long-term debt
1,535.9
1,535.9
300.0
450.0
647.1
138.8
Interest obligations(1)
—
274.7
74.7
105.9
85.7
8.4
Purchase and other obligations
—
521.0
325.0
130.2
46.3
19.5
Lease obligations
117.4
137.3
25.5
44.8
25.7
41.3
Total contractual obligations
2,143.4
2,959.0
1,215.3
730.9
804.8
208.0
(1) Interest obligations include expected interest payments on long-term debt as at December 29, 2024 (assuming balances remain
outstanding through to maturity). For variable rate debt, the Company has applied the rate applicable at December 29, 2024 to the
currently established maturity dates.
As disclosed in note 24 to our 2024 audited annual consolidated financial statements, we have granted financial
guarantees, irrevocable standby letters of credit, and surety bonds to third parties to indemnify them in the event the
Company and some of its subsidiaries do not perform their contractual obligations. As at December 29, 2024, the
maximum potential liability under these guarantees was $98 million, of which $17 million was for surety bonds and
$81 million was for financial guarantees and standby letters of credit.
11.0 CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
Our significant accounting policies are described in note 3 to our fiscal 2024 audited annual consolidated financial
statements. The preparation of financial statements in conformity with IFRS requires management to make estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, and
expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognized in the period in which the estimates are revised and in any future periods affected.
11.1 Critical judgments in applying accounting policies
The following are critical judgments that management has made in the process of applying accounting policies and that
have the most significant effect on the amounts recognized in the consolidated financial statements:
Determination of cash-generating units (CGUs)
The identification of CGUs and grouping of assets into the respective CGUs is based on currently available information
about actual utilization experience and expected future business plans. Management has taken into consideration various
factors in identifying its CGUs. These factors include how the Company manages and monitors its operations, the nature
of each CGU’s operations, and the major customer markets each CGU serves. As such, the Company has identified two
CGUs for purposes of testing the recoverability and impairment of non-financial assets: Textile & Sewing, and Hosiery.
Income taxes
The Company’s income tax provisions and income tax assets and liabilities are based on interpretations of applicable tax
laws, including income tax treaties between various countries in which the Company operates, as well as underlying rules
and regulations with respect to transfer pricing. These interpretations involve judgments and estimates and may be
challenged through government taxation audits, the Company being regularly subject to such audits. New information may
become available that causes the Company to change its judgment regarding the adequacy of existing income tax assets
and liabilities; such changes will impact net earnings in the period that such a determination is made.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 33
12.0 ACCOUNTING POLICIES AND NEW ACCOUNTING STANDARDS NOT YET APPLIED
12.1 Accounting policies
The Company’s audited consolidated financial statements for fiscal 2024 were prepared in accordance with IFRS as
issued by the International Accounting Standards Board (IASB), using the same accounting policies as those applied in its
fiscal 2023 audited annual consolidated financial statements, except as described below.
Amendments to IAS 1, Presentation of Financial Statements
On January 23, 2020, the IASB issued narrow-scope amendments to IAS 1, Presentation of Financial Statements, to
clarify how to classify debt and other liabilities as current or non-current. The amendments (which affect only the
presentation of liabilities in the statement of financial position) clarify that the classification of liabilities as current or non-
current should be based on rights that are in existence at the end of the reporting period to defer settlement by at least
twelve months and make explicit that only rights in place at the end of the reporting period should affect the classification
of a liability; clarify that classification is unaffected by expectations about whether an entity will exercise its right to defer
settlement of a liability; and make clear that settlement refers to the transfer to the counterparty of cash, equity
instruments, other assets, or services. On October 31, 2022, the IASB issued Non-current Liabilities with Covenants
(Amendments to IAS 1). These further amendments clarify how to address the effects on classification and disclosure of
covenants which an entity is required to comply with on or before the reporting date and covenants which an entity must
comply with only after the reporting date. The 2020 amendments and the 2022 amendments (collectively “the
Amendments”) are effective for annual periods beginning on or after January 1, 2024 and are applied retrospectively. The
amendment of IAS 1 had no impact on the Company’s consolidated financial statements.
IAS 12 Amendment International Tax Reform - Pillar Two Model Rules
In May 2023, the International Accounting Standards Board issued the IAS 12 Amendment International Tax Reform -
Pillar Two Model Rules on mandatory relief for accounting for deferred taxes from the global minimum taxation. The
amendments provide a temporary exception from the requirement to recognize and disclose deferred taxes arising from
enacted or substantively enacted tax law that implements the Pillar Two model rules published by the OECD, including tax
law that implements qualified domestic minimum top-up taxes described in those rules. The amendments also introduced
targeted disclosure requirements in the notes for affected entities to enable users of financial statements to understand
the extent to which an entity will be affected by the minimum tax, particularly before the legislation comes into force. The
amendments to IAS 12 were effective for annual periods beginning on or after January 1, 2023. The Company updated its
disclosures in its 2023 annual consolidated financial statements for the year ended December 31, 2023, with further
updated disclosures in these annual consolidated financial statements for the year ended December 29, 2024. The
Company applied the mandatory temporary exemption from recognizing and disclosing information about deferred tax
assets and liabilities related to Pillar Two income taxes in the Company's consolidated financial statements for the year
ended December 29, 2024.
12.2 New accounting standards and interpretations not yet applied
The following new accounting standards are not effective for the year ended December 29, 2024 and have not been
applied in preparing the audited annual consolidated financial statements.
IFRS 9 Financial Instruments (“IFRS 9”) and IFRS 7 Financial Instruments: Disclosures (“IFRS 7”)
In May 2024, IASB issued limited amendments to IFRS 9 and IFRS 7. These amendments provide clarity on the timing of
recognition and derecognition of financial assets and liabilities, the assessment of contractual cash flow characteristics,
and the resulting classification and disclosure of financial assets with environmental, social, and governance linked or
other contingent features. Additionally, the amendments clarify that a financial liability is derecognized on the settlement
date, with the accounting policy choice to derecognize a financial liability settled using an electronic payment system
before the settlement date, provided specific conditions are met. Additional disclosures are required for financial
instruments with contingent features and investments in equity instruments designated at fair value through other
comprehensive income with these amendments. These amendments are effective for annual reporting periods beginning
on or after January 1, 2026. Early adoption is permitted, with an option to early adopt only the amendments to the
classification of financial assets. The Company is currently evaluating the potential impact of these amendments on its
consolidated financial statements.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 34
IFRS 18 Presentation and Disclosure in Financial Statements ("IFRS 18")
On April 9, 2024, the IASB issued IFRS 18 to improve reporting of financial performance. IFRS 18 replaces IAS
1 Presentation of Financial Statements. It carries forward many requirements from IAS 1 unchanged. The standard sets
out requirements on presentation and disclosures in financial statements. It introduces a defined structure for the
statement of income composed of required categories and subtotals. The standard also introduces specific disclosure
requirements for management-defined performance measures and a reconciliation between these measures and the most
similar subtotal specified in IFRS, which must be disclosed in a single note. IFRS 18 applies for annual reporting periods
beginning on or after January 1, 2027. Earlier application is permitted. The Company is currently evaluating the impact of
the adoption of IFRS 18 on its consolidated financial statements.
13.0 DISCLOSURE CONTROLS AND PROCEDURES
As stated in the Canadian Securities Administrators’ National Instrument 52-109, Certification of Disclosure in Issuers’
Annual and Interim Filings and Rules 13a-15(e) and 15d-15(e) under the U.S. Securities Exchange Act of 1934, as
amended, disclosure controls and procedures means controls and other procedures of an issuer that are designed to
provide reasonable assurance that information required to be disclosed by the issuer in its annual filings, interim filings, or
other reports filed or submitted by it under securities legislation is recorded, processed, summarized, and reported within
the time periods specified in the securities legislation and include controls and procedures designed to ensure that
information required to be disclosed by an issuer in its annual filings, interim filings, or other reports filed or submitted
under securities legislation is accumulated and communicated to the issuer’s management, including its certifying officers,
as appropriate to allow timely decisions regarding required disclosure.
An evaluation of the effectiveness of our disclosure controls and procedures as of December 29, 2024 was carried out
under the supervision of, and with the participation of, our management, including our Chief Executive Officer and our
Chief Financial Officer. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded
that our disclosure controls and procedures were effective as of December 29, 2024.
14.0 INTERNAL CONTROL OVER FINANCIAL REPORTING
14.1 Management’s annual report on internal control over financial reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as
such term is defined in Rules 13(a)-15(f) and 15(d)-15(f) under the U.S. Securities Exchange Act of 1934 and under
National Instrument 52-109.
Our internal control over financial reporting means a process designed by, or under the supervision of, an issuer’s
certifying officers, and effected by the issuer’s board of directors, management, and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with the issuer’s GAAP and includes those policies and procedures that: (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our
assets; (2) are designed to provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with International Financial Reporting Standards, and that our receipts
and expenditures are being made only in accordance with authorization of our management and directors; and (3) are
designed to provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of our assets that could have a material effect on the annual financial statements or interim financial reports.
The design of any system of controls and procedures is based in part upon certain assumptions about the likelihood of
certain events. There can be no assurance that any design will succeed in achieving its stated goals under all potential
future conditions, regardless of how remote. As a result, due to its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 35
Under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer,
management conducted an evaluation of the effectiveness of our internal control over financial reporting, as at
December 29, 2024, based on the framework set forth in Internal Control-Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on that evaluation under this
framework, our Chief Executive Officer and our Chief Financial Officer concluded that our internal control over financial
reporting was effective as of December 29, 2024.
14.2 Attestation report of independent registered public accounting firm
KPMG LLP, an independent registered public accounting firm, which audited and reported on our consolidated financial
statements, has issued an unqualified report on the effectiveness of our internal control over financial reporting as of
December 29, 2024.
14.3 Changes in internal control over financial reporting
There have been no changes that occurred during the quarter beginning on September 30, 2024 and ended
December 29, 2024 in our internal control over financial reporting that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.
15.0 RISKS AND UNCERTAINTIES
In addition to the risks previously described under the sections “Financial risk management”, “Critical accounting
estimates and judgments”, and those described elsewhere in this MD&A, this section describes the principal risks that
could have a material and adverse effect on our financial condition, results of operations, business, cash flows, or the
trading price of our common shares, as well as cause actual results to differ materially from our expectations expressed in
or implied by our forward-looking statements. Many risks are driven by external factors beyond the Company's control or
are of a nature which cannot be eliminated. The key areas of business risks and uncertainties described in this section are
not the only ones that can affect the Company. Additional risks and uncertainties not currently known to us or that we
currently deem to be immaterial may also materially and adversely affect our financial condition, results of operations,
cash flows, or business.
Our ability to implement our growth strategies and plans
The growth of our business depends on the successful execution of key strategic initiatives as part of the Gildan
Sustainable Growth strategy, which is described in section 4.0 entitled "Strategy" of this MD&A. We are implementing our
plan or plan to execute on various initiatives aimed at expanding and optimizing our global production capacity and
maintaining or enhancing our cost structure, driving innovation across the organization, in our manufacturing and product-
development processes, distribution and final products. Our ability to implement our growth strategy and plans is
dependent upon a number of factors, some of which are beyond our control, and include but are not limited to our ability to
leverage the Company's strengths, general economic conditions and other risk factors as described in this MD&A. Further,
achieving these objectives will require significant investments which may result in both short-term and long-term costs.
The Company has historically relied on cash generated from its operating activities and financing cash flows as its primary
source of liquidity. To support the Company’s business and execute on its growth strategy and its plan to increase its
manufacturing capacity, the Company will need to continue to generate significant amounts of cash from operations. If the
Company’s business does not generate cash flow from operating activities sufficient to fund these activities, and if
sufficient funds are not otherwise available from its credit facilities and senior unsecured notes, the Company may need to
seek additional capital to fund its business or execute its growth strategy in which case there is no assurance the
Company will be successful in obtaining such additional capital if and when needed on favorable terms or at all. There can
be no assurance that we will be successful in the execution of these strategic initiatives, or that the successful execution
of these strategic initiatives will deliver the results we expect or grow our business. If we fail to effectively implement our
strategy, our financial condition, results of operations, business, cash flows or stock price could be adversely affected.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 36
Our ability to compete effectively
Competition in the basic apparel market is generally based upon service and product availability, price, quality, comfort
and fit, style, and brand. Our competitive strengths include our expertise in building and operating large-scale, vertically
integrated manufacturing hubs which allows us to operate efficiently and reduce costs, offer competitive pricing, and
provide a reliable supply chain. As discussed in section 4.0 of this MD&A entitled "Strategy", we intend to increase our
global production capacity, and any failure or delay in efficiently implementing or managing such increase in capacity, or
doing so in a cost-effective manner, could negatively impact our manufacturing and distribution cost structure, which
would negatively impact our ability to compete. There can be no assurance that we will be able to maintain our low cost
manufacturing and distribution structure and remain competitive. Higher-than-normal levels of cost inflation could lead to
pressure on retail prices, margins and operational costs. As discussed in section 3.3 of this MD&A, we compete with
domestic and international manufacturers, brands of well-established U.S. apparel and sportswear companies, as well as
our own customers, including retailers and wholesale distributors that are selling basic apparel products under their own
private label brands that compete directly with our brands. In addition, evolving e-commerce customer preferences and
behaviours continue to facilitate competitive entry and comparison shopping. Failure to compete effectively and respond
to evolving trends in the market, including intensifying competition from private label brands and e-commerce, and failure
to adapt our operations to service the changing needs of our customers could have a negative impact on our business
and results of operations. Any changes in our ability to compete effectively in the future may result in the loss of customers
to competitors, reduction in customer orders or shelf space, lower prices or the need for additional customer price
incentives, and other forms of marketing support to our customers, all of which could have a negative effect on our sales
volumes or profitability if we are unable to offset such negative impacts with new business or cost reductions.
Our ability to integrate acquisitions
The Company’s strategic opportunities may include potential complementary acquisitions that could support, strengthen,
or expand our business. The integration of newly acquired businesses may prove to be more challenging, take more time
than originally anticipated, or result in significant additional costs and/or operational issues, all of which could negatively
affect our financial condition and results of operations. In addition, we may not be able to fully realize anticipated
synergies and other benefits expected from acquisitions
We may be negatively impacted by changes in general economic and financial conditions
General economic and financial conditions, globally or in one or more of the markets we serve, may negatively affect our
business. If there is a decline in economic growth and in consumer and commercial activity, and/or adverse financial
conditions exist in the credit markets, this may lead to lower demand for our products resulting in sales volume reductions
and lower selling prices and may cause us to operate at levels below our optimal production capacity, which would result
in higher unit production costs, all of which could negatively affect our profitability and reduce cash flows from operations.
Weak economic and financial conditions could also negatively affect the financial condition of our customers, which could
result in lower sales volumes and increased credit risk.
We rely on a small number of significant customers
In any given period, we rely on a small number of customers for a significant portion of our total sales. In fiscal 2024, our
top three customers accounted for 26.8%, 12.4%, and 8.6% (2023 - 22.4%, 16.3%, and 7.6%) of total sales respectively,
and our top ten customers accounted for 71.5% (2023 - 69.0%) of total sales. As noted in section 3.4 entitled "Recent
events" of this MD&A, during fiscal 2024, the Company's two largest wholesale distributor customers closed a transaction
combining their businesses. These two customers constitute our top two customers for fiscal 2024 and 2023 for which the
respective sales percentages are noted above (their combined sales percentages are 39.2% and 38.7% for fiscal 2024
and 2023, respectively). We expect that these customers will continue to represent a significant portion of our sales in the
future.
Future sales volumes and profitability could be negatively affected should one or more of the following events occur:
•
a significant customer substantially reduces its purchases or ceases to buy from us, or we elect to reduce the
volume of business with or cease to sell to a significant customer, and we cannot replace that business with
sales to other customers on similar terms;
•
a large customer exercises its purchasing power to negotiate lower prices or higher price discounts or requires
us to incur additional service and other costs;
•
a customer experiences operational disruptions due to fires, extreme weather conditions, natural disasters or
pandemics, information system failures or incidents, and other factors;
•
further industry consolidation leads to greater customer concentration and competition; and
•
a customer encounters financial difficulties and is unable to meet its financial obligations.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 37
Our customers do not commit to purchase minimum quantities
Our contracts with our customers do not require them to purchase a minimum quantity of our products or commit to
minimum shelf space allocation for our products. If any of our customers experience a significant business downturn or fail
to remain committed to our products, they may reduce or discontinue purchases from us. Although we have maintained
long-term relationships with many of our wholesale distributor and retail customers, there can be no assurance that
historic levels of business from any of our customers will continue in the future.
Our ability to anticipate, identify, or react to changes in consumer preferences and trends
While we currently focus on basic products, the apparel industry, particularly within the retail channel, is subject to
evolving consumer preferences and trends, including potential shifts in consumer and customer preferences favouring
more sustainable and circular brands and suppliers in the markets we serve. Our success may be negatively impacted by
changes in consumer preferences which do not fit with Gildan’s core competency of marketing and large-scale
manufacturing of basic apparel products. If we fail to effectively anticipate, identify, or respond to changing styles or
trends, or increased preferences for sustainable and/or circular products, or if we misjudge the market for our products,
our sales could be adversely affected. This could result in unsold inventory, which could negatively impact our profitability.
In addition, when introducing new products for our customers we may incur additional costs and transitional manufacturing
inefficiencies as we ramp-up production or upgrade manufacturing capabilities to support such customer programs, which
could negatively impact our profitability.
Our ability to manage production and inventory levels effectively in relation to changes in customer demand
Demand for our products may vary from year to year. We aim to appropriately balance our production and inventory with
our ability to meet market demand and cadence of distributor inventory replenishment. Based on discussions with our
customers and internally generated projections reflecting our analysis of factors impacting industry demand, we produce
and carry finished goods inventory to meet the expected demand for delivery of specific product categories. If, after
producing and carrying inventory in anticipation of deliveries, demand is significantly less than expected, we may have to
carry inventory for extended periods of time or sell excess inventory at reduced prices. In either case, our profits would be
reduced. Excess inventory could also result in lower production levels, resulting in lower plant and equipment utilization
and lower absorption of fixed operating costs. Alternatively, we are also exposed to loss of sales opportunities and market
share if we produce insufficient inventory to satisfy our customers’ demand for specific product categories as a result of
underestimating market demand or not meeting production targets, in which case our customers could seek to fulfill their
product needs from competitors and reduce the amount of business they do with us.
We may be negatively impacted by fluctuations and volatility in the price of raw materials used to manufacture
our products
Cotton and polyester fibers are the primary raw materials used in the manufacture of our products. We also use
chemicals, dyestuffs, and trims which we purchase from a variety of suppliers. The price of cotton fluctuates and is
affected by consumer demand, global supply, which may be impacted by weather conditions in any given year,
speculation in the commodities market, the relative valuations and fluctuations of the currencies of producer versus
consumer countries, and other factors that are generally unpredictable and beyond our control, including the overall state
of the economy and expectations for economic growth (including as a result of the current inflationary environment). In
addition, fluctuations in energy prices, including prices for crude oil or petroleum, natural gas, biomass and electricity
affect our energy consumption costs and can also influence transportation costs and the cost of related items used in our
business, such as polyester fibers, chemicals, dyestuffs, and trims. Fluctuations in energy prices are partly influenced by
government policies to address climate change, which could increase our energy costs beyond our current expectations.
In addition, the Company is subject to carbon tax regulations in various jurisdictions where it operates. The carbon tax
rates and the scope of emissions covered by these regulations may change over time, which could cause fluctuations in
our energy consumption and other costs. Geopolitical and economic risks, including from existing or threatened military
conflicts and volatility in the energy markets, have raised concerns in international economies. Beyond any immediate
impact, these developments may also negatively affect the evolution of the global economy.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 38
The Company purchases cotton and polyester fibers through its yarn-spinning facilities, and also purchases processed
cotton yarn and blended yarn from outside vendors, at prices that are correlated with the price of cotton and polyester
fibers. The Company may enter into contracts up to twenty-four months in advance of future delivery dates to establish
fixed prices for cotton, cotton-based yarn, and polyester fiber purchases and reduce the effect of price fluctuations in the
cost of cotton and polyester fibers used in the manufacture of its products. For future delivery periods where such fixed
price contracts have been entered into, the Company will be protected against cotton and polyester fiber price increases
but would not be able to benefit from cotton or polyester fiber price decreases. Conversely, in the event that we have not
entered into sufficient fixed priced contracts for cotton or polyester fibers, or have not made other arrangements to lock in
the price of cotton or polyester fibers in advance of delivery, we will not be protected against price increases, but will be in
a position to benefit from any price decreases. A significant increase in raw material costs, particularly cotton and
polyester fiber costs, could have a negative effect on our business, results of operations, and financial condition, if the
increase or part of the increase is not mitigated through additional manufacturing and distribution cost reductions and/or
higher selling prices, or if resulting selling price increases negatively impact demand for the Company’s products. In
addition, when the Company fixes its cotton and polyester fiber costs for future delivery periods and the cost of cotton or
polyester fibers subsequently decreases significantly for that delivery period, the Company may need to reduce selling
prices, which could have a negative effect on our business, results of operations and financial condition.
We rely on key suppliers
Our ability to meet our customers’ needs depends on our ability to maintain an uninterrupted supply of raw materials,
energy (including biomass, oil, natural gas and electricity) and finished goods from third-party suppliers. More specifically,
we source cotton, cotton-based yarns, polyester fibers, chemicals, dyestuffs, and trims primarily from a limited number of
outside suppliers. In addition, a substantial portion of the products sold under the Gold Toe® portfolio of brands are
purchased from a number of third-party suppliers. Our business, results of operations, and financial condition could be
negatively affected if there is a significant change in our relationship with any of our principal suppliers of raw materials,
energy or finished goods, or if any of these key suppliers have difficulty sourcing cotton fibers and other raw materials,
experience production disruptions, fail to maintain production quality, fail to qualify under our social compliance program,
violate labour laws and regulations, experience transportation disruptions or encounter financial difficulties. These events
can result in lost sales, cancellation charges, or excessive markdowns, all of which can have a negative effect on our
business, results of operations, and financial condition.
We may be negatively impacted by climate, political, social, and economic risks, natural disasters, pandemics,
and endemics in the countries in which we operate or from which we source production
The majority of our products are manufactured in Central America, primarily in Honduras and Nicaragua, as well as the
Caribbean and Bangladesh, as described in the section entitled “Our operations” in this MD&A. We also purchase a
portion of our sock requirements from third-party suppliers in Asia. Some of the countries in which we operate or source
from have experienced political, social, and economic instability in the past, and we cannot be certain of their future
stability. In addition, most of our facilities and those of our key suppliers are located in geographic regions that are
exposed to the risk of, and have experienced in the past, hurricanes, floods, earthquakes, pandemics, and endemics. Any
such events in the future could have a negative impact on our business.
The following conditions or events could disrupt our supply chain, interrupt operations at our facilities or those of our
suppliers and customers, increase our cost of sales and other operating expenses, result in a loss of sales, asset losses,
or require additional capital expenditures to be incurred:
•
fires, extraordinary weather conditions, or natural disasters, such as hurricanes, tornadoes, floods, extreme heat,
droughts, tsunamis, typhoons, and earthquakes;
•
pandemics;
•
political instability, social and labour unrest, human rights violations, war, or terrorism;
•
disruptions in port activities, shipping and freight forwarding services; and
•
interruptions in the availability of basic services and infrastructure, including power and water shortages.
Our insurance programs do not cover every potential loss associated with our operations, including potential damage to
assets, lost sales and profits, and liability that could result from the aforementioned conditions or events. In addition, our
insurance may not fully cover the consequences resulting from a loss event, due to insurance limits, sub-limits, or policy
exclusions. Furthermore, we may not always be able to obtain adequate insurance coverage in regions in which we
operate that have a higher likelihood of experiencing natural disasters. Any occurrence not fully covered by insurance
could have a negative effect on our business.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 39
Compliance with laws and regulations in the various countries in which we operate and the potential negative
effects of litigation and/or regulatory actions
Our business is subject to a wide variety of laws and regulations across all of the countries in which we do business,
which involves the risk of legal and regulatory actions regarding such matters as international trade, sanctions or other
trade restrictions, lobbying or similar activities, competition, taxation, corporate and securities legislation, environmental,
health and safety, labour and employment practices, human rights including modern slavery legislation, product liability,
intellectual property infringement, licensing and permits, data privacy, bankruptcies, and other claims. Some of these
compliance risks are further described in this "Risks and uncertainties" section of the MD&A. In the event of non-
compliance with such laws and regulations, we may be subject to regulatory actions, claims and/or litigation which could
result in fines, penalties, claim settlement costs or damages awarded to plaintiffs, legal defense costs, product recalls and
related costs, remediation costs, the detainment of goods by government bodies, incremental operating costs and capital
expenditures to improve future/ongoing compliance, and damage to the Company’s reputation. In addition, non-
compliance with certain laws and regulations could result in regulatory actions that could temporarily or permanently
restrict or limit our ability to conduct operations as planned, potentially resulting in lost sales, closure costs, and asset
write-offs. Due to the inherent uncertainties of litigation or regulatory actions in both domestic and foreign jurisdictions, we
cannot accurately predict the ultimate outcome of any such proceedings.
Laws and regulations are constantly changing and are often complex, and future compliance cannot be assured. Changes
necessary to maintaining compliance with these laws and regulations may increase future compliance costs and have
other negative impacts on our business, results of operations, and financial condition.
As part of the regulatory and legal environments in which we operate, Gildan is subject to anti-bribery laws that prohibit
improper payments directly or indirectly to government officials, authorities, or persons defined in those anti-bribery laws
in order to obtain business or other improper advantages in the conduct of business. Failure by our employees,
subcontractors, suppliers, agents, and/or partners to comply with anti-bribery laws could impact Gildan in various ways
that include, but are not limited to, criminal, civil and administrative legal sanctions, negative publicity, and could have a
negative effect on our reputation as well as our business, results of operations, and financial condition
We rely on certain international trade (including multilateral and bilateral) agreements and preference programs
and are subject to evolving international trade regulations
As a multinational corporation, we are affected by import tariffs, including the potential imposition of anti-dumping or
countervailing duties or other trade remedies on our raw materials and finished goods, international trade legislation, and
bilateral and multilateral trade agreements, trade preference programs, and trade incentives in the countries in which we
operate, source, and sell products. To remain globally competitive, we have situated our manufacturing facilities in
strategic locations to benefit from various free trade agreements and trade preference programs. Furthermore,
management continuously monitors new developments and evaluates risks relating to trade, including the application and
eligibility of incentives, anti-dumping and countervailing duties, tariffs, quantitative limitations, and proposed trade
remedies or restrictions that could impact our approach to global manufacturing and sourcing, and adjusts accordingly as
needed.
The Company relies on a number of preferential trade programs which provide duty-free access to the U.S. market for
goods meeting specified rules of origin, including the Dominican Republic - Central America - United States Free Trade
Agreement (CAFTA-DR), the Caribbean Basin Trade Partnership Act (CBTPA), and the Haiti Economic Lift Program
(HELP) previously referred to as the Haitian Hemispheric Opportunity through Partnership Encouragement Act (HOPE).
Collectively, these agreements strengthen U.S. economic relations and expand trade with Central America, the Dominican
Republic, and Haiti, where we have substantial manufacturing operations and activities. The Company also relies on
preferential trade agreements to access the European Union, Canada, and other markets. Changes to trade agreements,
trade preference programs, or trade incentives on which the Company currently relies or the entry into force of trade-
restricting legislation may negatively impact our global competitive position. Additionally, macroeconomic factors such as
inflation precipitated by the implementation of new tariffs or a tariff war in the U.S. market may erode consumer
purchasing power, the impact of which is impossible to predict. This uncertainty, combined with the recent indications by
the U.S. government of potential new tariffs on imports from various trading partners, could create additional risks for our
business. The consequences of these measures, including potential supply chain disruptions, increased costs, and shifts
in global trade flows, may further impact our competitive position in key markets. The likelihood that the agreements,
preference programs and trade incentives around which we have built our manufacturing supply chain will be modified,
repealed, phased-out, or allowed to expire, and the extent of the impact of such changes on our business, cannot be
determined with certainty.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 40
Recently, an increasing U.S. focus on domestic manufacturing has drawn worldwide attention. While a significant
proportion of our manufacturing costs originate in the United States, the Company also has significant operations and
sourcing outside the United States. There is no assurance that the recent and continuing focus in this area may not attract
negative publicity on the Company and its activities, or lead to adverse changes in the international trade agreements and
preference programs on which the Company currently relies, the implementation of additional tariffs on imports of our raw
materials or finished goods into the United States, or further U.S. tax reform that could increase our effective income tax
rate. Furthermore, the imposition of non-tariff barriers by the countries into which we sell our products internationally may
also impact our ability to service such markets. Any of these outcomes could negatively impact our ability to compete
effectively and negatively affect our results of operations.
Many trade agreements provide for the application of special safeguards in the form of reinstatement of normal duties if
increased imports constitute a substantial cause of serious injury, or threat thereof, to a domestic industry. The likelihood
that a safeguard will be adopted and the extent of its impact on our business cannot be determined with certainty.
Furthermore, the imposition of any new import tariffs in the countries in which we operate or in countries in which our
competition operate may negatively or positively impact our global competitive position. For example, United States laws
provide for the application of anti-dumping or countervailing duties on imports of products into the United States where
determinations are made by the relevant agencies that such imported products have been subsidized and/or are being
sold at less than “fair value” in the case of anti-dumping determinations, or have been subsidized by a foreign
government, in the case of countervailing duty determinations, and that such imports are causing a material injury to the
domestic industry. The mechanism to implement anti-dumping and countervailing duties is available to every World Trade
Organization member country. More recently, the United States imposed 10% additional duty on imported products from
China and threatened 25% additional duty on imported products of Mexico and Canada. The impact of the imposition of
such duties cannot be determined with certainty.
The United States withdrew from the Trans-Pacific Partnership Agreement (TPP) in 2017, but the other negotiating
countries went on to conclude the Comprehensive Progressive Trans-Pacific Partnership (CPTPP) in 2018. Thus far,
Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United Kingdom (UK), and
Vietnam have ratified and implemented CPTPP. CPTPP may negatively affect our competitive position in some of the
countries in which we sell our products.
The European Union has an Association Agreement with Central America, including Honduras and Nicaragua, where we
have production operations. The European Union also has preferential trade arrangements with other countries. Further,
the European Union maintains a Generalized System of Preferences (GSP) and the Everything But Arms programs
(EBA). These programs allow free or reduced duty entry into the European Union of qualifying articles, including apparel,
from developing countries and least developed countries where we have manufacturing operations, including Haiti and
Bangladesh. The European Union also affords preference to qualifying apparel from notable production venues including
Vietnam, Myanmar and Pakistan, which could negatively impact our competitive position in the European Union. Since the
UK left the European Union, it has established its own preferential trading arrangements with the Central American and
CARIFOROM trade partners and its own Generalized System of Preferences program. Any changes to any of these
agreements could have a negative impact on our operations.
China extends duty-free and quota-free trade benefits to apparel under the Asia-Pacific Trade Agreement and under a
special preferential tariff program for least developed countries, including to chief-weight cotton apparel from Bangladesh.
Changes to the agreement or preference program could have a negative impact on our operations. In 2021, the United
Nations General Assembly passed a resolution to “graduate” Bangladesh from the least developed country category to the
developing country category. Although, the resolution established a five-year grace period, this change in Bangladesh’s
status could lead to a preemptive reduction, termination, or phase-out of trade preferences or trade incentives for
Bangladesh’s exports to Canada, the European Union, the UK, Japan, the United States, Australia, and other countries.
Bangladesh’s reduction, termination or phase-out of trade preferences or trade incentives may negatively affect our
competitive position in some of the countries in which we sell our products.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 41
Many Chinese imports into the United States are subject to additional trade remedy duties under section 301 of the Trade
Act of 1974. The items on Lists 3 and, 4A, under this action include textiles and apparel. Currently, goods on List 3 are
subject to 25 percent additional duty, and goods on List 4A, are subject to 7.5 percent additional duty. Imposition by the
United States of any further duties on Chinese goods, could negatively impact our operations. The implementation of new
Section 201 or 301 remedies could negatively impact our operations by introducing the possibility of additional duties or
trade restrictions, which could exacerbate supply chain disruptions and increase costs for businesses reliant on imports.
These investigations also create an environment of uncertainty, making it challenging to plan long-term investments or
maintain stable supplier relationships. Moreover, the implementation of Section 201 and 301 investigations carries the risk
of escalating trade tensions, which can lead to retaliatory measures from affected trading partners. Such actions could
disrupt access to key export markets, reduce global competitiveness, and strain cross-border supply chains. Any
implementation of new Section 201 or 301 measures could have a negative impact on our operations.
The United States has determined that the mass detention and treatment of Uyghurs and other ethnic minorities in the
Xinjiang Uyghur Autonomous Region (XUAR) of China constitutes forced labour. The Uyghur Forced Labor Prevention Act
(UFLPA), which took effect on June 21, 2022, establishes a presumption that any goods produced or manufactured in
whole or in part in XUAR were made with forced labour and are inadmissible into the United States unless importers
present clear and convincing evidence that the goods were not made with forced labour. The United States has identified
cotton products as a high enforcement priority. U.S. Customs and Border Protection (“CBP”) can detain or, exclude
shipments under the UFLPA. While we do not source product from the XUAR and have taken increased actions to ensure
our entire supply chain is free of any form of modern slavery, including forced labour, there is nonetheless a risk, given the
presence of XUAR origin cotton in global supply chains, that our business could be affected by these restrictions.
The U.S. Generalized System of Preferences program expired on December 31, 2020. Although the expired program did
not include duty-free preference for textile and apparel products, any renewal of the program incorporating duty-free
access of textiles and apparel into the U.S. for beneficiary countries could adversely impact our competitiveness in the
United States.
The Regional Comprehensive Economic Partnership (RCEP) is a free trade agreement among Australia, Brunei,
Cambodia, China, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, South Korea,
Thailand, and Vietnam. The agreement is currently in force among all signatories except Myanmar. Once ratified by all
signatories, RCEP will be the world’s largest free trade agreement based on member’s gross domestic product. As the
RCEP is implemented and utilized, it may negatively affect our competitive position in some of the countries in which we
sell our products. Japan's Generalized System of Preferences scheme currently allows duty-free entry of qualifying goods
from Bangladesh. Any change to Japan’s GSP preference program could negatively impact our operations.
Overall, changes to trade agreements or trade preference programs that we leverage in our key country markets, or new
agreements that liberalize access for our competitors, could negatively impact our competitiveness in those markets. The
likelihood of such changes, or of modification, suspension, or termination of the agreements and preference programs
around which we have built our manufacturing supply chain, and the extent of the impact on our business, cannot be
determined with certainty.
In addition, the Company could be subject to customs audits as well as valuation and origin verifications in the various
countries in which it operates. Although we believe that our customs compliance programs are effective at ensuring the
eligibility of all goods manufactured for the preferential treatment claimed upon importation, and are in compliance with
other applicable customs requirements, we cannot predict the outcome of any governmental audit or inquiry.
The Company operates three U.S. foreign trade zones (FTZs) at its distribution warehouses in North and South Carolina,
and another one in Florida. While FTZs enhance efficiencies in the customs entry process and allow for the non-
application of duty on certain goods distributed internationally, FTZs are highly regulated operations. The Company
believes it has adequate systems and controls in place to manage the regulatory requirements associated with its FTZs,
but we cannot predict the outcome of any governmental audit or examination of our FTZs.
Over the past two decades, governmental bodies have responded to the increased threat of terrorist activity by requiring
greater levels of inspection of imported goods and imposing security requirements on importers, carriers, and others in the
global supply chain. These added requirements may cause delays and increase costs in bringing imported goods to
market. We believe we have effectively addressed these requirements to maximize velocity in our supply chain, but
changes in security requirements or tightening of security procedures, for example, in the aftermath of a terrorist incident,
could cause delays in our goods reaching the markets in which we distribute our products.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 42
Textile and apparel articles are generally not subject to specific export restrictions or licensing requirements in the
countries where we manufacture and distribute goods. However, unilateral and multilateral sanctions and trade
disincentives on certain countries and persons are unpredictable, and they continue to evolve in response to economic
and political events, particularly in the countries in which we operate, and could significantly impact our supply chain,
capital investments, along with our ability to service our customers. The impact of the imposition of sanctions and trade
disincentives on products we import into the United States or other markets cannot be determined or predicted with
certainty.
Factors or circumstances that could increase our effective income tax rate
The Company is subject to income tax in multiple jurisdictions where it operates. Historically, the Company benefited from
a low overall effective corporate tax rate, as the majority of its profits were earned, and the majority of its sales, marketing,
and manufacturing operations were carried out, in low tax rate jurisdictions in Central America and the Caribbean.
However, with the enactment of the global minimum tax regime developed by the Organisation for Economic Co-operation
and Development (OECD), known as Pillar Two, in 2024 by several jurisdictions in which the Company operates, the
Company is now subject to a minimum effective tax rate of 15%, which has increased the Company’s overall effective tax
rate. See section 5.4 “Global Minimum Tax” of this MD&A for additional information.
The Company’s income tax filing positions and income tax provisions are based on interpretations of applicable tax laws
in the jurisdictions in which it operates, including income tax treaties between various countries in which the Company
operates as well as underlying rules and regulations with respect to transfer pricing. These interpretations involve
judgments and estimates and may be challenged through government taxation audits that the Company is regularly
subject to. Although the Company believes its tax filing positions are sustainable, we cannot predict with certainty the
outcome of any audit undertaken by taxation authorities in any jurisdictions in which we operate, and the final result may
vary compared to the estimates and assumptions used by management in determining the Company’s consolidated
income tax provision and in valuing its income tax assets and liabilities. Depending on the ultimate outcome of any such
audit, there may be a negative impact on the Company’s financial condition, results of operations, and cash flows. In
addition, if the Company were to receive a tax reassessment by a taxation authority prior to the ultimate resolution of an
audit, the Company could be required to submit an advance deposit on the amount reassessed.
The Company's overall effective income tax rate may also be adversely affected by the following: changes to current
domestic laws in the countries in which the Company operates; changes to or terminations of the income tax treaties the
Company currently relies on; an increase in income and withholding tax rates; changes to free trade and export
processing zone rules in certain countries where the Company is currently not subject to income tax; changes in domestic
laws and income tax treaties that may result from the OECD initiatives against base erosion and profit shifting (BEPS),
including changes to guidance regarding the interpretation and application of domestic laws, free trade and export
processing zones, and income tax treaties; increases in the proportion of the Company's overall profits being earned in
higher tax rate jurisdictions due to changes in the locations of the Company's operations or business model; or other
factors.
We have unrecognized deferred income tax liabilities for the undistributed profits of our subsidiaries, for which we
currently have no intention to repatriate these profits. If our expectations or intentions change in the future, we could be
required to recognize a charge to earnings for the tax liability relating to the undistributed profits of our subsidiaries, which
would also result in a corresponding cash outflow in the years in which the earnings would be repatriated. As at
December 29, 2024, the estimated income tax liability that would result in the event of a full repatriation of these
undistributed profits is approximately $78 million.
Provisions for uncertain tax positions are measured at the best estimate of the amounts expected to be paid upon ultimate
resolution. The Company’s overall effective income tax rate is impacted by its assessment of uncertain tax positions and
whether additional taxes and interest may be due. The Company’s assessment of uncertain tax positions may be
negatively affected as a result of new information, a change in management’s assessment of the technical merits of its
positions, changes to tax laws, administrative guidance, and the conclusion of tax audits.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 43
Compliance with environmental and health and safety regulations
We are subject to various federal, state, and local environmental, social and occupational health and safety laws and
regulations in the jurisdictions in which we operate, concerning, among other things, environmental licenses, wastewater
discharges, air emissions, storm water flows, waste disposal, and fire permits. Our manufacturing plants generate some
quantities of waste, which are recycled, repurposed, or disposed of by licensed waste management companies, in cases
of hazardous waste. Through our Global Environment & Energy Policy, Restricted Substances Code of Practice and
Environmental Management System, we seek not only to comply with all applicable laws and regulations, but also to
reduce our environmental footprint through an efficient use of our resources, landfill reduction and the prioritization of
reducing, reusing and recycling. Although we believe that we are currently in compliance in all material respects with the
regulatory requirements of those jurisdictions in which our facilities are located, the extent of our liability, if any, for failures
to comply with laws, regulations, and permits applicable to our operations cannot be reasonably determined.
In line with our commitment to the environment, as well as to the health and safety of our employees, we incur capital and
other expenditures each year that are aimed at achieving compliance with current environmental standards. There can be
no assurance that future changes in federal, state, local, or other regulations, interpretations of existing regulations or the
discovery of currently unknown problems or conditions will not require substantial additional environmental remediation
expenditures, fines/penalties, or result in a disruption to our supply chain, any of which could have an adverse effect on
our business.
Global climate change could have an adverse impact on our business
In recent years we have seen certain effects related to climate change largely driven by extreme weather events (e.g.,
hurricanes, flooding, fires, severe storms, cyclones, water scarcity etc.), which may have financial implications for the
business. Our operations in Central America, the Caribbean, the United States, and Asia have been subjected to an
increase in severe weather events. For example, in November 2020, our Central American operations were impacted by
back-to-back hurricanes, necessitating a temporary shutdown of these facilities. While the Company is making additional
investments to improve the resiliency of its manufacturing facilities to extreme weather events, nonetheless, such future
events could slow and/or halt production due to physical damage to our assets; result in increased employee absenteeism
and reduced worker productivity in order to address incremental safety measures during extreme weather conditions; and/
or result in supply chain disruptions limiting transportation of supplies or delivery of goods. Additionally, longer-term,
chronic shifts in weather patterns may result in rising sea levels, or declining freshwater availability and quality, extreme
heat as well as increased duration, intensity and frequency of weather events, all of which could restrict the capacity and
cost effectiveness of our operations and impact the cost and availability of key raw materials such as cotton.
Climate-related transition risks that we could be exposed to and adversely affected by include (but are not limited to) the
following: the impact of changes in government policies, laws and regulations; changes in market conditions; consumer
preferences and attitudes affecting their spending behavior; increased reputational risk for failing to meet evolving
stakeholder and consumer expectations; and impacts related to adopting new technologies. In some of the regions in
which we operate, government policies are quickly evolving to support the transitioning to a low carbon economy by
implementing climate and sustainability-related legislation and regulations, including carbon pricing proposals, mandates
for emission reductions and supply chain mapping disclosures.
The emergence of greenwashing and social washing legislation presents significant risks for companies across multiple
fronts, including Gildan, given its global sales presence. The Company faces heightened litigation and reputational risks
globally, with stakeholders such as suppliers, investors, and business partners scrutinizing its sustainability and social
practices as well as disclosures and claims, potentially impacting brand value and relationships. Additionally, the lack of
consistent legal requirements across jurisdictions and rapidly evolving regulatory landscapes worldwide represents an
additional challenge for Gildan. Legal consequences, supply chain disruptions, and competitive disadvantages underscore
the importance of prioritizing due diligence over Company and product-level claims and disclosures.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 44
Scope 1, 2 and 3 emissions reduction targets:
Gildan has established an ESG strategy which in part is aimed at meeting stakeholder expectations and mitigating the
various climate change risks. This strategy includes setting and pursuing targets as further described in section 4.0 of this
MD&A entitled “Strategy". Our ability to lower GHG emissions on both an absolute basis and in respect of our 2030
reduction targets is subject to numerous risks and uncertainties, including our ability to identify, develop and implement
new technologies and processes at a reasonable long-term cost that aligns with our low-cost production model; securing
key management expertise specific to required technologies; and our ability to continue to finance these investments over
the long-term. Additionally, there can be no assurance that we will achieve our targets on a timely basis or at all, or satisfy
evolving government legislation. Also, our actions taken to implement these objectives may expose us to certain additional
heightened financial and operational risks, including potentially limiting capacity expansion plans, business acquisition
opportunities and other growth initiatives. Additionally, costs related to implementing our ESG strategy as it relates to
climate change and environmental initiatives may be higher than anticipated, and we may not be able to pass on higher
costs to our customers. The rate of progress towards our targets could also expose us to reputational and litigation risks.
Increasingly, investors and other stakeholders are monitoring and assessing companies on climate-related performance.
Failure to achieve our GHG targets, or a perception among investors that our targets lack ambition and/or are deemed to
be insufficient, could adversely affect the Company’s reputation and ability to attract capital. The Company’s ability to
access capital may also be negatively affected in the event that financial institutions, investors, rating agencies and/or
lenders adopt more restrictive decarbonization policies that the Company may not meet.
Overall, the physical and transitional risks relating to the effects of climate change on our business both in the short and
long term are complex and highly uncertain. There can be no assurance that we will be successful in mitigating these
risks, and if we are not successful in this regard, such outcome could heighten other business risks described in this
MD&A and have an adverse effect on our future sales, competitive position and market share, financial position,
profitability, cost structure, capital expenditure requirements, capacity, growth plans, distribution network, supply chain,
sources of financing, reputation, and our ability to achieve our strategic financial and ESG objectives.
Compliance with product safety regulations
We are subject to consumer product safety laws and regulations that could affect our business. In the United States, we
are subject to the Consumer Product Safety Act, the Federal Hazardous Substances Act, the Flammable Fabrics Act, the
Toxic Substances Control Act, and associated rules and regulations. These statutes and regulations include requirements
for testing and certification for flammability of wearing apparel, for lead content and lead in surface coatings in children’s
products, and for phthalate content in childcare articles, including plasticized components of children’s sleepwear. We are
also subject to similar laws and regulations, and to additional warning and reporting requirements, in specific U.S. states
in which we sell our products.
In Canada, we are subject to similar laws and regulations, including the Hazardous Products Act and the Canada
Consumer Product Safety Act. In the European Union, we are also subject to the General Product Safety Regulation and
the Registration, Evaluation, Authorization and Restriction of Chemicals (REACH), which places responsibility on all
manufacturers to identify and manage the risks that chemical substances may pose to human health and to the
environment. We are also subject to similar laws and regulations in the other jurisdictions in which we sell our products.
Compliance with existing and future product safety laws and regulations and enforcement policies may require that we
incur costs, which may be significant. Non-compliance with applicable product safety laws and regulations may result in
substantial fines and penalties, costs related to the recall, replacement and disposal of non-compliant products, as well as
negative publicity which could harm our reputation and result in a loss of sales. Our customers may also require us to
meet existing and additional consumer safety requirements. Although we believe that we comply in all material respects
with applicable product safety laws and regulations in the jurisdictions in which we operate, the extent of our liability and
risk of business interruption, if any, due to failures to comply with laws, regulations, and permits applicable to our
operations cannot be reasonably determined.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 45
We may be negatively impacted by changes in our relationship with our employees or changes to domestic and
foreign employment regulations
We employ approximately 50,000 employees worldwide. As a result, changes in domestic and foreign laws governing our
relationships with our employees, including wage and human resources laws and regulations, fair labour standards,
overtime pay, unemployment tax rates, workers’ compensation rates, and payroll taxes, would likely have a direct impact
on our operating costs. The majority of our employees are employed outside Canada and the United States. A significant
increase in wage rates or the cost of benefit programs in the countries in which we operate could have a negative impact
on our operating costs.
The Company has historically been able to operate in a productive manner in all of its manufacturing facilities without
experiencing significant labour disruptions, such as strikes or work stoppages. Many of our employees are members of
labour organizations, and the Company is party to a number of collective bargaining agreements, primarily relating to its
sewing operations in Nicaragua and Honduras. Several collective agreements to which the Company is a party are due to
expire at various times in the future. An inability to renew these collective agreements on mutually agreeable terms, as
they become subject to renegotiation from time to time, could result in work stoppages or other labour disturbances such
as strikes, walkouts or lock-outs, and/or increased costs of labour, which could adversely affect our ability to deliver
products and services in a timely manner and on budget and could adversely affect our financial condition and results. If
labour relations were to change or deteriorate at any of our facilities or any of our third-party contractors’ facilities, this
could negatively affect the productivity and cost structure of the Company’s manufacturing operations, and our ability to
effectively service customers which may result in lost sales.
We may experience negative publicity as a result of actual, alleged, or perceived violations of labour laws or
international labour standards, unethical labour, and other business practices
We are committed to ensuring that all of our operations and contractor operations comply with our strict internal Code of
Conduct, local and international laws, and the codes and principles to which we subscribe, including those of the Fair
Labor Association (FLA) and the Worldwide Responsible Accredited Production (WRAP). While the majority of our
manufacturing operations are conducted through Company-owned facilities, we also utilize third-party contractors, which
we do not control, to complement our vertically integrated production. If one of our own manufacturing operations or one
of our third-party contractors or sub-contractors violates or is accused of violating local or international labour laws or
other applicable regulations, or engages in labour or other business practices that would be viewed, in any market in
which our products are sold, as unethical, we could experience negative publicity which could harm our reputation or the
social acceptability of our products, which could impact our ability to retain existing customers or attract new ones and
result in a loss of sales, which, in turn, could have a material adverse effect on our financial condition, results of
operations, business or cash flows.
Our ability to protect our intellectual property rights
Our trademarks are important to our marketing efforts and have substantial value. We aggressively protect these
trademarks from infringement and dilution through appropriate measures including court actions and administrative
proceedings; however, the actions we have taken and expect to continue to take to establish and protect our trademarks
and other intellectual property may not be adequate. We cannot be certain that others will not imitate our products or
infringe our intellectual property rights. Infringement or counterfeiting of our products could diminish the value of our
brands or otherwise negatively affect our business. In addition, unilateral actions in the United States or other countries,
such as changes to or the repeal of laws recognizing trademark or other intellectual property rights, could have an impact
on our ability to enforce those rights.
From time to time, we are involved in opposition and cancellation proceedings with respect to our intellectual property,
which could affect its validity, enforceability, and use. The value of our intellectual property could diminish if others assert
rights in, or ownership of, or oppose our applications to register our trademarks and other intellectual property rights. In
some cases, there may be trademark owners who have prior rights to our trademarks or to similar trademarks, which
could harm our ability to sell products under or register such trademarks. In addition, we have registered trademarks in
certain foreign jurisdictions and the laws of foreign countries may not protect our intellectual property rights to the same
extent as do the laws of the United States or Canada. We do not own trademark rights to all of our brands in all
jurisdictions, which may limit the future sales growth of certain branded products in such jurisdictions. Furthermore,
actions we have taken to protect our intellectual property rights may not be adequate to prevent others from seeking to
invalidate our trademarks or block sales of our products as a violation of the trademarks and intellectual property rights of
others.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 46
In some cases, litigation may be necessary to protect our trademarks and other intellectual property rights, to enforce our
rights or defend against claims by third parties alleging that we infringe, dilute, misappropriate, or otherwise violate third-
party trademark or other intellectual property rights. Any litigation or claims brought by or against us, whether with or
without merit, and whether successful or not, could result in substantial costs and diversion of our resources, which could
have a negative effect on our business, financial condition, results of operation and cash flows. Any intellectual property
litigation claims against us could result in the loss or compromise of our intellectual property rights, could subject us to
significant liabilities, require us to seek licenses on unfavorable terms, if available at all, and/or require us to rebrand our
products and services, any of which could negatively affect our business, results of operations, financial condition, and
cash flows.
We rely significantly on our information systems for our business operations
We place significant reliance on our information systems. Our information systems consist of a full range of supply chain
and financial systems. The systems include applications related to product development, planning, manufacturing,
distribution, sales, human resources, analytics, and financial reporting. We depend on our information systems to operate
our business and make key decisions. These activities include forecasting demand, purchasing raw materials and
supplies, designing products, scheduling and managing production, selling to our customers, responding to customer,
supplier and other inquiries, managing inventories, shipping goods on a timely basis, managing our employees, and
summarizing results. There can be no assurance that we will not experience operational problems with our information
systems as a result of system failures, viruses, information security incidents, cyber security incidents, disasters or other
causes, or in connection with upgrades to our systems or implementation of new systems. In addition, there can be no
assurance that we will be able to timely modify or adapt our systems to meet evolving requirements of our business. Any
material disruption or slowdown of our systems could cause operational delays and other impacts that could negatively
affect our business and results of operations.
We may be negatively impacted by data security breaches or data privacy violations
Our business involves the regular collection, use and sharing of sensitive and confidential information regarding
employees, customers, business partners, vendors, and other third parties. These activities are highly regulated, and
privacy and information security laws are complex and constantly changing. Non-compliance with these laws and
regulations can lead to legal liability and reputational risk. Furthermore, an information technology system failure or non-
availability, cyber security incident, or breach of systems could disrupt our operations, cause the loss of, corruption of, or
unauthorized access to business information and data, compromise confidential information, or expose us to regulatory
investigation, litigation, fines, contractual penalties and financial losses. Divergent technology systems inherited through
business acquisitions increase complexity and potential exposure. We use a risk-based approach to mitigating information
security risk and data privacy risk. We continue to invest in and improve our data privacy practices, data security threat
protection, detection and mitigation policies, procedures and controls, and awareness campaigns to enhance data
protection. We seek to detect and investigate all incidents and to prevent their occurrence or recurrence. Senior
leadership provides updates to the Corporate Governance and Social Responsibility Committee of any major data security
or privacy issues on a quarterly basis, provides quarterly information security reports to the Audit and Finance Committee,
provides strategic updates to the Board of Directors on an annual basis, and has a process in place to communicate time
sensitive issues to the Board on an as-needed basis. We are unaware of any material data security or privacy issues over
the past three years, and expenses incurred from data security breaches and privacy violations have been negligible over
this period. However, given the highly evolving nature and sophistication of security threats, data privacy laws, and our
dependence upon third party data sharing, the impact of any future incident cannot be easily predicted or mitigated, and
the costs related to such incidents may not be fully insured or indemnified by other means.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 47
Rapid developments in artificial intelligence (AI) could adversely impact our business
AI capabilities are continuing to develop rapidly and are becoming more generally available, increasing the risk that AI
could become disruptive to our business. Failure to keep pace with the advancement of new technologies such as AI
could impact our competitive advantage and negatively affect our business, financial condition, and results of operations.
Implementation and reliance on new technologies, including machine learning and generative AI, within the Company and
through third-party providers, increase the risk that flaws in algorithms, processes, or data may result in inaccurate
decisions and potentially increase the cost of operational or cybersecurity related interruptions. Leveraging these new and
rapidly evolving technologies may also increase other risks such as risks relating to indirect infringement on intellectual
property or privacy and could carry social or ethical implications including unintended bias that could increase reputational
risk and potentially result in regulatory fines or penalties. Future legislative action limiting or otherwise regulating the use
of these technologies could also adversely impact our ability to operate using them, which, in turn, could negatively affect
our business, financial condition and results of operations.
There is also a risk that AI could be used to infringe upon our intellectual property, impersonate our people, falsely
represent our products, or be used in other ways that could result in operational or reputational harm.
We depend on key management and our ability to attract and/or retain key personnel
Our success depends upon the continued contributions of our key management, some of whom have unique talents and
experience and would be difficult to replace in the short term. The loss or interruption of the services of a key executive
could have a negative effect on our business during the transitional period that would be required to restructure the
organization or for a successor to assume the responsibilities of the key management position. Our future success will
also depend on our ability to attract, hire and retain key managers, including manufacturing, sales and other personnel.
Experienced and highly skilled employees are in high demand and competition for these employees can be intense, and
our ability to attract, hire and retain them depends on our ability to provide competitive compensation. We may not be able
to attract, hire or retain these employees, which could negatively affect our business.
16.0 Definition and reconciliation of non-GAAP financial measures and related ratios
We use non-GAAP financial measures, as well as non-GAAP ratios to assess our operating and financial performance,
financial condition and leverage, and liquidity. The terms and definitions of the non-GAAP financial measures used in this
MD&A and a reconciliation of each non-GAAP measure to the most directly comparable GAAP measure are provided
below. The non-GAAP financial measures are presented on a consistent basis for all periods presented in this MD&A.
These measures do not have any standardized meanings prescribed by IFRS and are therefore unlikely to be comparable
to similar measures presented by other companies. Accordingly, they should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with IFRS.
Non-GAAP financial measures and related ratios
In this MD&A we use non-GAAP financial measures including adjusted net earnings, adjusted earnings before income
taxes, adjusted income tax expense, adjusted gross profit, adjusted SG&A expenses, adjusted operating income, adjusted
EBITDA, as well as non-GAAP ratios including adjusted diluted EPS, adjusted effective income tax rate, adjusted gross
margin, adjusted SG&A expenses as a percentage of net sales, adjusted operating margin and adjusted RONA. These
financial metrics are used to measure our performance and financial condition from one period to the next, which excludes
the variation caused by certain adjustments that could potentially distort the analysis of trends in our operating and
financial performance, and because we believe such measures provide meaningful information on the Company’s
operating and financial performance and financial condition. Excluding these items does not imply they are non-recurring.
We also use non-GAAP financial measures including free cash flow, total debt, net debt, net debt leverage ratio and
working capital.
Certain adjustments to non-GAAP measures
As noted above certain of our non-GAAP financial measures and ratios exclude the variation caused by certain
adjustments that affect the comparability of the Company's operating and financial results and could potentially distort the
analysis of trends in its business performance. Adjustments which impact more than one non-GAAP financial measure
and ratio are explained below:
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 48
Restructuring and acquisition-related (recoveries) costs
Restructuring and acquisition-related (recoveries) costs are comprised of costs directly related to significant exit activities,
including the closure of business locations and sale of business locations or the relocation of business activities,
significant changes in management structure, as well as transaction, exit, and integration costs incurred pursuant to
business acquisitions. Restructuring and acquisition-related costs are included as an adjustment in arriving at adjusted
operating income, adjusted operating margin, adjusted net earnings, adjusted earnings before income taxes, adjusted
diluted EPS, and adjusted EBITDA. Restructuring and acquisition-related recoveries were $5 million for the fiscal year
ended December 29, 2024 (2023 - $46 million (costs), 2022 - $0.5 million (costs)). Subsection 5.6.5 entitled “Restructuring
and acquisition-related costs” in this MD&A contains a detailed discussion of these costs.
Impairment (Impairment reversal) of intangible assets, net of write-downs
During the fourth quarter of fiscal 2022 we reported an impairment charge of $62 million relating to the Company's Hosiery
CGU. During the fourth quarter of fiscal 2023 we reported an impairment reversal of $41 million relating to the Hosiery
CGU. There was no impairment or reversal of impairment identified during the fourth quarter of fiscal 2024. Impairment
charges and impairment reversals are included as adjustments in arriving at adjusted operating income, adjusted
operating margin, adjusted net earnings, adjusted diluted EPS, and adjusted EBITDA.
Net insurance losses (gains)
Net insurance gains of nil (2023 - $77 million, 2022 - $26 million) for the fiscal year ended December 29, 2024, related to
the two hurricanes which impacted the Company’s operations in Central America in November 2020. Net insurance gains
relate to the recognition of insurance recoveries for business interruption losses and insurance recoveries for damaged
equipment. Insurance gains relating to recoveries for business interruption losses of nil (2023 - $74 million, 2022 - nil), are
recorded in insurance gains, and included as an adjustment in arriving at adjusted operating income, adjusted operating
margin, adjusted net earnings, adjusted diluted EPS, and adjusted EBITDA. Net insurance gains and losses relating
mainly to recoveries for damaged equipment, salary and benefits for idle employees of nil, (2023 - $3 million (gain), 2022 -
$26 million (gain)), are recorded in cost of sales and included as an adjustment in arriving at adjusted gross profit and
adjusted gross margin, adjusted operating income, adjusted operating margin, adjusted net earnings, adjusted diluted
EPS, and adjusted EBITDA.
Impact of strategic product line initiatives
In the fourth quarter of fiscal 2019, the Company launched a strategic initiative to significantly reduce its imprintables
product line SKU count. In the fourth quarter of fiscal 2020 the Company expanded this strategic initiative to include a
significant reduction in its retail product line SKU count. The objectives of this strategic initiative include exiting all ship to-
the-piece activities, discontinuing overlapping and less productive styles and SKUs between brands, simplifying the
Company's product portfolio and reducing complexity in its manufacturing and warehouse distribution activities. The
impact of this initiative has included inventory write-downs to reduce the carrying value of discontinued SKUs to liquidation
values, sales return allowances for product returns related to discontinued SKUs. The impact of strategic product line
initiatives is included as an adjustment in arriving at adjusted gross profit and adjusted gross margin, adjusted operating
income, adjusted operating margin, adjusted net earnings, adjusted diluted EPS, and adjusted EBITDA.
The charges related to this initiative in fiscal 2022, 2023 and 2024, were as follows:
•
Fiscal 2022 includes $1 million gain related to the reversal of a reserve relating to Company's strategic initiatives
to significantly reduce its product line SKU counts.
•
Fiscal 2023 and 2024 recoveries were nil.
Gain on sale and leaseback
During the first quarter of 2023, the Company recognized a gain of $25 million ($15.5 million after reflecting $9.5 million of
income tax expense) on the sale and leaseback of one of our distribution centres located in the U.S. The impact of this
gain was included as an adjustment in arriving at adjusted operating income, adjusted operating margin, adjusted
earnings before income taxes, adjusted income tax expense, adjusted net earnings, adjusted diluted EPS, and adjusted
EBITDA.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 49
Costs relating to proxy contest and leadership changes and related matters
On December 11, 2023, the Company’s then Board of Directors (the “Previous Board”) announced the termination of the
Company’s President and Chief Executive Officer, Glenn Chamandy. On such date, the Previous Board appointed Vince
Tyra as President and Chief Executive Officer, and Mr. Tyra took office in the first quarter of fiscal 2024, effective on
January 15, 2024. Following the termination of Mr. Chamandy, shareholder Browning West and others initiated a
campaign and proxy contest against the Previous Board, proposing a new slate of Directors and requesting the
reinstatement of Mr. Chamandy as President and Chief Executive Officer. In the second quarter of 2024, on April 28,
2024, in advance of the May 28, 2024 Annual General Meeting of Shareholders (“Annual Meeting”), the Previous Board
announced a refreshed Board of Directors (“Refreshed Board”) that resulted in the immediate replacement of five
Directors, with two additional Directors staying on temporarily but not standing for re-election at the Annual Meeting. On
May 23, 2024, five days prior to the Annual Meeting, the Refreshed Board and Mr. Tyra resigned, along with Arun Bajaj,
the Company’s Executive Vice-President, Chief Human Resources Officer (CHRO) and Legal Affairs. The Refreshed
Board appointed Browning West's nominees to the Board of Directors (the “New Board”), effective as of that date. On May
24, 2024, the New Board reinstated Mr. Chamandy as President and Chief Executive Officer. On May 28, 2024, the New
Board was elected by shareholders at the Annual Meeting. During the past year, the Company incurred significant
expenses primarily at the direction of the Previous Board and the Refreshed Board, including: (i) legal, communication,
proxy advisory, financial and other advisory fees relating to the proxy contest and related matters and the termination and
subsequent reinstatement of Mr. Chamandy; (ii) legal, financial and other advisory fees with respect to a review process
initiated by the Previous Board following receipt of a confidential non-binding expression of interest to acquire the
Company; (iii) special senior management retention awards; (iv) severance and termination benefits relating to outgoing
executives; and (v) incremental director meeting fees and insurance premiums. In addition, subsequent to the Annual
Meeting, the Corporate Governance and Social Responsibility Committee (the "CGSRC") recommended to the New
Board, and the New Board approved, back-pay compensation for Mr. Chamandy (who did not receive any severance
payment following his termination on December 11, 2023), relating to his reinstatement, including the reinstatement of
share-based awards that were canceled by the Previous Board. In light of the strong shareholder support received for its
successful campaign and the fact that the Refreshed Board resigned in advance of the Annual Meeting, the CGSRC also
recommended to the New Board, and the New Board approved, the reimbursement of Browning West’s legal and other
advisory expenses relating to the proxy contest, in the amount of $9.4 million in the second quarter of 2024.
The total costs relating to these non-recurring events (“Costs relating to proxy contest and leadership changes and related
matters”) amounted to $82.7 million (2023 - $6.3 million, 2022 - nil), for the year ended December 29, 2024, as itemized in
the table below with corresponding footnotes. Such costs are included in selling, general and administrative expenses.
The impact of the below charges are included as adjustments in arriving at adjusted SG&A expenses, adjusted SG&A
expenses as a percentage of net sales, adjusted operating income, adjusted operating margin, adjusted earnings before
income taxes, adjusted net earnings, adjusted diluted EPS, and adjusted EBITDA.
Three months ended
Twelve months ended
(in $ millions)
December
29, 2024
December
31, 2023
December
29, 2024
December
31, 2023
January 1,
2023
Advisory fees on shareholder matters(1)
0.9
1.8
36.7
1.8
—
Severance and other termination benefits(2)
—
—
21.6
—
—
Compensation expenses relating to Glenn Chamandy’s
termination and subsequent reinstatement as
President and Chief Executive Officer(3)
—
4.5
8.9
4.5
—
Incremental (recoveries) costs relating to the Previous
Board and Refreshed Board(4)
(0.1)
—
8.7
—
—
Costs relating to assessing external interests in
acquiring the Company(5)
—
—
3.0
—
—
Special retention awards, net of jobs credit(6)
(0.4)
—
3.8
—
—
Costs relating to proxy contest and leadership changes
and related matters
0.4
6.3
82.7
6.3
—
(1) Relates to advisory, legal and other expenses for the proxy contest and shareholder matters. Charges incurred during
fiscal 2024 of $36.7 million (2023 - $1.8 million, 2022 - nil) include:
–
$27.3 million (2023 - $1.8 million, 2022 - nil) of advisory, legal and other fees and expenses related to the proxy
contest and related matters; and
–
$9.4 million of expenses (2023 - nil, 2022 - nil) for the reimbursement of advisory, legal and other fees and
expenses incurred by Browning West in relation to the proxy contest (refer to note 22 of the consolidated annual
financial statements for the year ended December 29, 2024 for additional information).
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 50
(2) Relates to the payout of severance and other termination benefits to Mr. Tyra and Mr. Bajaj pursuant to existing
severance arrangements approved and made by the Refreshed Board in the context of the proxy contest, prior to its
conclusion in May 2024. The cash payouts in the second quarter of 2024 for severance and termination benefits totaled
$24.4 million, of which $15.3 million was for Mr. Tyra and $9.1 million was for Mr. Bajaj. The respective charges included in
selling, general and administrative expenses totaled $21.6 million (of which $14.1 million was for Mr. Tyra and $7.5 million
was for Mr. Bajaj), and include $12.3 million for accelerated vesting of share-based awards as well $9.3 million in other
termination benefits for these executives.
(3) Compensation expenses relating to Mr. Chamandy include back-pay as part of his reinstatement by the New Board,
and the reinstatement of share-based awards which had been canceled by the Previous Board. Net charges incurred
during fiscal year ended December 29, 2024 of $8.9 million (2023 - $4.5 million, 2022 - nil), respectively, include:
–
$1.7 million (2023 - nil, 2022 - nil) for backpay and accruals for short-term incentive plan benefits;
–
nil (2023 - $9.8 million, 2022 - nil) consisting of accrued termination benefits;
–
$14.6 million of stock-based compensation expense for past service costs related to the reinstatement of
Mr. Chamandy’s 2022 and 2023 long-term incentive program (LTIP) grants (for which a reversal of net
compensation expense of approximately $5 million was recorded in the fourth quarter of fiscal 2023);
–
$2.4 million of stock-based compensation expense adjustments relating to Mr. Chamandy’s 2021 LTIP share-
based grant which vested in 2024; and
–
The reversal of a $9.8 million accrual for severance in the second quarter of 2024 (which had been accrued for in
the fourth quarter of 2023), as Mr. Chamandy forfeited any termination benefit entitlement in connection with the
award of back-pay and reinstatement of canceled share-based awards as noted above.
(4) The Company incurred $8.7 million of incremental costs relating to the Previous Board and Refreshed Board during
fiscal 2024. These charges include $4.8 million for a Directors and Officers run off insurance policy, $0.6 million for special
board meeting fee payments, and $3.3 million for the increase in value of the deferred share units (DSU) liability.
(5) Relates to advisory, legal and other expenses with respect to the announced review process initiated by the Previous
Board following receipt of a confidential non-binding expression of interest to acquire the Company. The Company
incurred $3.0 million of expenses during fiscal 2024 related to this matter.
(6) Stock-based compensation expenses relating to special retention awards, granted in the first quarter of fiscal 2024, of
$3.8 million for fiscal 2024, include $5.8 million of retention awards, partially offset by $2.0 million in jobs credit. At the
grant date, these special retention awards had a total fair value of $8.6 million. The stock-based compensation expense
relating to these awards is being recognized over the respective vesting periods, with most of the awards originally vesting
at the end of 2024. In connection with the departure of Mr. Bajaj, $2.5 million of these awards were fully paid out in cash to
him during the second quarter of 2024, as part of the $9.1 million payout in note 2 above.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 51
Adjusted net earnings and adjusted diluted EPS
Adjusted net earnings are calculated as net earnings before restructuring and acquisition-related costs, impairment
(impairment reversal) of intangible assets, net insurance gains, gain on sale and leaseback, costs relating to proxy contest
and leadership changes and related matters, the impact of the Company's strategic product line initiatives, and income tax
expense or recovery relating to these items. Adjusted net earnings also excludes income taxes related to the re-
assessment of the probability of realization of previously recognized or de-recognized deferred income tax assets, and
income taxes relating to the revaluation of deferred income tax assets and liabilities as a result of statutory income tax rate
changes in the countries in which we operate. Adjusted diluted EPS is calculated as adjusted net earnings divided by the
diluted weighted average number of common shares outstanding. The Company uses adjusted net earnings and adjusted
diluted EPS to measure its net earnings performance from one period to the next, and in making decisions regarding the
ongoing operations of its business, without the variation caused by the impacts of the items described above. The
Company excludes these items because they affect the comparability of its net earnings and diluted EPS and could
potentially distort the analysis of net earnings trends in its business performance. The Company believes adjusted net
earnings and adjusted diluted EPS are useful to investors because they help identify underlying trends in our business
that could otherwise be masked by certain expenses, write-offs, charges, income or recoveries that can vary from period
to period. Excluding these items does not imply they are non-recurring. These measures do not have any standardized
meanings prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other
companies.
Three months ended
Twelve months ended
(in $ millions, except per share amounts)
December
29, 2024
December
31, 2023
December
29, 2024
December
31, 2023
January 1,
2023
Net earnings
132.3
153.3
400.9
533.6
541.5
Adjustments for:
Restructuring and acquisition-related (recoveries)
costs
(4.3)
10.9
(5.3)
45.8
0.5
Impairment (Impairment reversal) of intangible
assets, net of write-downs
—
(40.8)
—
(40.8)
62.3
Impact of strategic product line initiatives
—
—
—
—
(1.0)
Gain on sale and leaseback
—
—
—
(25.0)
—
Net insurance gains
—
—
—
(77.3)
(25.9)
Costs relating to proxy contest and leadership
changes and related matters
0.4
6.3
82.7
6.3
—
Income tax expense (recovery) relating to the above-
noted adjustments
0.4
(0.5)
0.5
10.0
7.2
Impact of Barbados tax rate changes on the
revaluation of deferred income tax assets and
liabilities
(0.6)
—
10.9
—
—
Income tax recovery related to the revaluation of
deferred income tax assets and liabilities(1)
—
—
—
—
(9.9)
Adjusted net earnings
128.2
129.2
489.7
452.6
574.7
Diluted EPS
0.86
0.89
2.46
3.03
2.93
Adjusted diluted EPS(2)
0.83
0.75
3.00
2.57
3.11
(1) Includes an income tax recovery of nil (2023 - nil, 2022 - $9.9 million) pursuant to the recognition of previously de-recognized (in fiscal
2018 and fiscal 2017 pursuant to the organizational realignment plan) deferred income tax assets as a result of a re-assessment of the
probability of realization of such deferred income tax assets.
(2) This is a non-GAAP ratio. It is calculated as adjusted net earnings (loss) divided by the diluted weighted average number of common
shares outstanding.
Certain minor rounding variances exist between the consolidated financial statements and this summary.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 52
Adjusted earnings before income taxes, adjusted income tax expense, and adjusted effective income tax rate
Adjusted effective income tax rate is defined as adjusted income tax expense divided by adjusted earnings before income
taxes. Adjusted earnings before income taxes excludes restructuring and acquisition-related costs, impairment
(impairment reversal) of intangible assets, net insurance gains, gain on sale and leaseback, costs relating to proxy contest
and leadership changes and related matters, and the impact of the Company's strategic product line initiatives. Adjusted
income tax expense is defined as income tax expense excluding tax rate changes resulting in the revaluation of deferred
income tax assets and liabilities, income taxes relating to the re-assessment of the probability of realization of previously
recognized or de-recognized deferred income tax assets, and income tax expense relating to restructuring charges and
other pretax adjustments noted above. The Company excludes these adjustments because they affect the comparability
of its effective income tax rate. The Company believes the adjusted effective income tax rate provides a clearer
understanding of our normalized effective tax rate and financial performance for the current period and for purposes of
developing its annual financial budgets. The Company believes that adjusted effective income tax rate is useful to
investors in assessing the Company's future effective income tax rate as it identifies certain pre-tax expenses and gains
and income tax charges and recoveries which are not expected to recur on a regular basis (in particular, non-recurring
costs such as proxy contest and leadership changes and related matters incurred in the Company’s Canadian legal entity
which do not result in tax recoveries, and tax rate changes resulting in the revaluation of deferred income tax assets and
liabilities).
Three months ended
Twelve months ended
(in $ millions, or otherwise indicated)
December
29, 2024
December
31, 2023
December
29, 2024
December
31, 2023
January 1,
2023
Earnings before income taxes
152.0
156.9
514.1
564.2
566.4
Adjustments for:
Restructuring and acquisition-related (recoveries)
costs
(4.3)
10.9
(5.3)
45.8
0.5
Impairment (Impairment reversal) of intangible
assets, net of write-downs
—
(40.8)
—
(40.8)
62.3
Impact of strategic product line initiatives
—
—
—
—
(1.0)
Net insurance gains
—
—
—
(77.3)
(25.9)
Gain on sale and leaseback
—
—
—
(25.0)
—
Costs relating to proxy contest and leadership
changes and related matters
0.4
6.3
82.7
6.3
—
Adjusted earnings before income taxes
148.1
133.3
591.5
473.2
602.3
Income tax expense
19.7
3.6
113.2
30.6
24.9
Adjustments for:
Income tax expense relating to restructuring
(recoveries) costs and other adjustments above
(0.4)
0.5
(0.5)
(10.0)
(7.2)
Income tax recovery related to the revaluation of
deferred income tax assets and liabilities
—
—
—
—
9.9
Impact of Barbados tax rate changes on the
revaluation of deferred income tax assets and
liabilities
0.6
—
(10.9)
—
—
Adjusted income tax expense
19.9
4.1
101.8
20.6
27.6
Average effective income tax rate(1)
13.0 %
2.3 %
22.0 %
5.4 %
4.4 %
Adjusted effective income tax rate(2)
13.4 %
3.1 %
17.2 %
4.4 %
4.6 %
(1) Average effective income tax rate is calculated as income tax expense divided by earnings before income taxes.
(2) This is a non-GAAP ratio. It is calculated as adjusted income tax expense divided by adjusted earnings before income taxes.
Certain minor rounding variances exist between the unaudited condensed interim consolidated financial statements and this summary.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 53
Adjusted gross profit and adjusted gross margin
Adjusted gross profit is calculated as gross profit excluding the impact of net insurance gains in fiscal 2023, and the
impact of the Company's strategic product line initiatives. The Company uses adjusted gross profit and adjusted gross
margin to measure its performance at the gross margin level from one period to the next, without the variation caused by
the impacts of the item described above. The Company excludes this item because it affects the comparability of its
financial results and could potentially distort the analysis of trends in its business performance. Excluding this item does
not imply that it is non-recurring. The Company believes adjusted gross profit and adjusted gross margin are useful to
management and investors because they help identify underlying trends in our business in how efficiently the Company
uses labor and materials for manufacturing goods to our customers that could otherwise be masked by the impact of net
insurance gains in prior years. These measures do not have any standardized meanings prescribed by IFRS and are
therefore unlikely to be comparable to similar measures presented by other companies.
Three months ended
Twelve months ended
(in $ millions, or otherwise indicated)
December
29, 2024
December
31, 2023
December
29, 2024
December
31, 2023
January 1,
2023
Gross profit
253.0
236.6
1,003.7
880.1
992.4
Adjustments for:
Impact of strategic product line initiatives
—
—
—
—
(1.0)
Net insurance gains
—
—
—
(3.1)
(25.9)
Adjusted gross profit
253.0
236.6
1,003.7
877.0
965.5
Net sales
821.5
782.7
3,270.6
3,195.9
3,240.5
Sales return allowance for anticipated product returns
—
—
—
—
—
Net sales excluding the allowance for anticipated
product returns related to discontinued SKUs
821.5
782.7
3,270.6
3,195.9
3,240.5
Gross margin
30.8 %
30.2 %
30.7 %
27.5 %
30.6 %
Adjusted gross margin(1)
30.8 %
30.2 %
30.7 %
27.4 %
29.8 %
(1) This is a non-GAAP ratio. It is calculated as adjusted gross profit divided by net sales excluding the sales return allowance for
anticipated product returns related to discontinued SKUs. Net sales excluding the sales return allowance for anticipated product returns
related to discontinued SKUs is a non-GAAP measure used in the denominator of the adjusted margin ratios to reverse the full effect of
the SKU rationalization adjustments.
Certain minor rounding variances exist between the consolidated financial statements and this summary.
Adjusted SG&A expenses and adjusted SG&A expenses as a percentage of sales
Adjusted SG&A expenses is calculated as selling, general and administrative expenses excluding the impact of costs
relating to proxy contest and leadership changes and related matters. The Company uses adjusted SG&A expenses and
adjusted SG&A expenses as a percentage of net sales to measure its performance from one period to the next, without
the variation caused by the impact of the items described above. Excluding these items does not imply they are non-
recurring. The Company believes adjusted SG&A expenses and adjusted SG&A expenses as a percentage of net sales
are useful to investors because they help identify underlying trends in our business that could otherwise be masked by
costs relating to the proxy contest and leadership changes and related matters, which the Company believes are unusual
and non-recurring in nature. These measures do not have any standardized meanings prescribed by IFRS and are
therefore unlikely to be comparable to similar measures presented by other companies.
Three months ended
Twelve months ended
(in $ millions, or otherwise indicated)
December
29, 2024
December
31, 2023
December
29, 2024
December
31, 2023
January 1,
2023
SG&A expenses
78.3
88.3
390.8
330.4
326.3
Adjustment for:
Costs relating to proxy contest and leadership
changes and related matters
0.4
6.3
82.7
6.3
—
Adjusted SG&A expenses
77.9
82.0
308.1
324.1
326.3
SG&A expenses as a percentage of net sales
9.5 %
11.3 %
11.9 %
10.3 %
10.1 %
Adjusted SG&A expenses as a percentage of net
sales(1)
9.5 %
10.5 %
9.4 %
10.1 %
10.1 %
(1) This is a non-GAAP ratio. It is calculated as adjusted SG&A expenses divided by net sales.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 54
Adjusted operating income and adjusted operating margin
Adjusted operating income is calculated as operating income before restructuring and acquisition-related costs, and also
excludes impairment (impairment reversal) of intangible assets, the impact of the Company's strategic product line
initiatives, net insurance gains, gain on sale and leaseback, and costs relating to proxy contest and leadership changes
and related matters. Management uses adjusted operating income and adjusted operating margin to measure its
performance at the operating income level as we believe it provides a better indication of our operating performance and
facilitates the comparison across reporting periods, without the variation caused by the impacts of the items described
above. The Company excludes these items because they affect the comparability of its operating results and could
potentially distort the analysis of trends in its operating income and operating margin performance. The Company believes
adjusted operating income and adjusted operating margin are useful to investors because they help identify underlying
trends in our business in how efficiently the Company generates profit from its primary operations that could otherwise be
masked by the impact of the items noted above that can vary from period to period. Excluding these items does not imply
they are non-recurring. These measures do not have any standardized meanings prescribed by IFRS and are therefore
unlikely to be comparable to similar measures presented by other companies.
Three months ended
Twelve months ended
(in $ millions, or otherwise indicated)
December
29, 2024
December
31, 2023
December
29, 2024
December
31, 2023
January 1,
2023
Operating income
179.0
178.1
618.2
643.9
603.4
Adjustments for:
Restructuring and acquisition-related (recoveries)
costs
(4.3)
10.9
(5.3)
45.8
0.5
Impairment (Impairment reversal) of intangible
assets, net of write-downs
—
(40.8)
—
(40.8)
62.3
Impact of strategic product line initiatives
—
—
—
—
(1.0)
Gain on sale and leaseback
—
—
—
(25.0)
—
Net insurance gains
—
—
—
(77.3)
(25.9)
Costs relating to proxy contest and leadership
changes and related matters
0.4
6.3
82.7
6.3
—
Adjusted operating income
175.1
154.5
695.6
552.9
639.3
Operating margin
21.8 %
22.8 %
18.9 %
20.1 %
18.6 %
Adjusted operating margin(1)
21.3 %
19.7 %
21.3 %
17.3 %
19.7 %
(1) This is a non-GAAP ratio. It is calculated as adjusted operating income divided by net sales excluding the sales return allowance for
anticipated product returns related to discontinued SKUs. Net sales excluding the sales return allowance for anticipated product returns
related to discontinued SKUs is a non-GAAP measure used in the denominator of the adjusted margin ratios to reverse the full effect of
the SKU rationalization adjustments.
Certain minor rounding variances exist between the consolidated financial statements and this summary.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 55
Adjusted EBITDA
Adjusted EBITDA is calculated as earnings before financial expenses net, income taxes, and depreciation and
amortization, and excludes the impact of restructuring and acquisition-related costs. Adjusted EBITDA also excludes
impairment (impairment reversal) of intangible assets, the impact of the Company's strategic product line initiatives, net
insurance gains, gain on sale and leaseback, and costs relating to proxy contest and leadership changes and related
matters. Management uses adjusted EBITDA, among other measures, to facilitate a comparison of the profitability of its
business on a consistent basis from period-to-period and to provide a more complete understanding of factors and trends
affecting our business. The Company also believes this measure is commonly used by investors and analysts to assess
profitability and the cost structure of companies within the industry, as well as measure a company’s ability to service debt
and to meet other payment obligations, or as a common valuation measurement. The Company excludes depreciation
and amortization expenses, which are non-cash in nature and can vary significantly depending upon accounting methods
or non-operating factors. Excluding these items does not imply they are non-recurring. This measure does not have any
standardized meanings prescribed by IFRS and is therefore unlikely to be comparable to similar measures presented by
other companies.
Three months ended
Twelve months ended
(in $ millions)
December
29, 2024
December
31, 2023
December
29, 2024
December
31, 2023
January 1,
2023
Net earnings
132.3
153.3
400.9
533.6
541.5
Restructuring and acquisition-related (recoveries)
costs
(4.3)
10.9
(5.3)
45.8
0.5
Impairment (Impairment reversal) of intangible
assets, net of write-downs
—
(40.8)
—
(40.8)
62.3
Impact of strategic product line initiatives
—
—
—
—
(1.0)
Gain on sale and leaseback
—
—
—
(25.0)
—
Net insurance gains
—
—
—
(77.3)
(25.9)
Costs relating to proxy contest and leadership
changes and related matters
0.4
6.3
82.7
6.3
—
Depreciation and amortization
33.3
30.8
138.2
121.6
124.9
Financial expenses, net
26.9
21.2
104.2
79.7
37.0
Income tax expense
19.7
3.6
113.2
30.6
24.9
Adjusted EBITDA
208.3
185.3
833.9
674.5
764.2
Certain minor rounding variances exist between the consolidated financial statements and this summary.
Free cash flow
Free cash flow is defined as cash flow from operating activities, less cash flow used in investing activities excluding cash
flows relating to business acquisitions. The Company considers free cash flow to be an important indicator of the financial
strength and liquidity of its business, and it is a key metric used by management in managing capital as it indicates how
much cash is available after capital expenditures to repay debt, to pursue business acquisitions, and/or to redistribute to
its shareholders. Management believes that free cash flow also provides investors with an important perspective on the
cash available to us to service debt, fund acquisitions, and pay dividends. In addition, free cash flow is commonly used by
investors and analysts when valuing a business and its underlying assets. This measure does not have any standardized
meanings prescribed by IFRS and is therefore unlikely to be comparable to similar measures presented by other
companies.
(in $ millions)
2024
2023
2022
Cash flows from (used in) operating activities
501.4
546.6
413.5
Cash flows from (used in) investing activities
(112.1)
(154.9)
(182.4)
Adjustment for:
Business (dispositions) acquisitions
—
—
(33.5)
Free cash flow
389.3
391.7
197.6
Certain minor rounding variances exist between the consolidated financial statements and this summary.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 56
Total debt and net debt
Total debt is defined as the total bank indebtedness, long-term debt (including any current portion), derivative financial
instrument assets and liabilities related to the principal component of the cross-currency swap, and lease obligations
(including any current portion), and net debt is calculated as total debt net of cash and cash equivalents. The new
adjustment in fiscal 2024 to total debt for the cross-currency swap on the Canadian notes incurred in the fourth quarter of
fiscal 2024 reflects that the Company does not have exposure to the Canadian/US exchange rate fluctuations due to the
hedge. The Company considers total debt and net debt to be important indicators for management and investors to
assess the financial position and liquidity of the Company, and measure its financial leverage. These measures do not
have any standardized meanings prescribed by IFRS and are therefore unlikely to be comparable to similar measures
presented by other companies.
December
29, 2024
December
31, 2023
January 1,
2023
(in $ millions)
Long-term debt (including current portion)
1,535.9
985.0
930.0
Bank indebtedness
—
—
—
Derivative financial instrument liabilities on Canadian Senior unsecured notes
14.1
—
—
Lease obligations (including current portion)
117.4
98.1
94.0
Total debt
1,667.4
1,083.1
1,024.0
Cash and cash equivalents
(98.8)
(89.6)
(150.4)
Net debt
1,568.6
993.5
873.6
Certain minor rounding variances exist between the consolidated financial statements and this summary.
Net debt leverage ratio
The net debt leverage ratio is defined as the ratio of net debt to pro-forma adjusted EBITDA for the trailing twelve months,
all of which are non-GAAP measures. The pro-forma adjusted EBITDA for the trailing twelve months reflects business
acquisitions made during the period, as if they had occurred at the beginning of the trailing twelve month period. The
Company has currently set a net debt leverage target ratio of 1.5 to 2.5 times pro-forma adjusted EBITDA for the trailing
twelve months (previously 1.0 to 2.0 times). The net debt leverage ratio serves to evaluate the Company's financial
leverage and is used by management in its decisions on the Company's capital structure, including financing strategy. The
Company believes that certain investors and analysts use the net debt leverage ratio to measure the financial leverage of
the Company, including our ability to pay off our incurred debt. The Company's net debt leverage ratio differs from the net
debt to EBITDA ratio that is a covenant in our loan and note agreements, and therefore the Company believes it is a
useful additional measure. This measure does not have any standardized meanings prescribed by IFRS and is therefore
unlikely to be comparable to similar measures presented by other companies.
December
29, 2024
December
31, 2023
January 1,
2023
(in $ millions, or otherwise indicated)
Adjusted EBITDA for the trailing twelve months
833.8
674.5
764.2
Adjustment for:
Business acquisitions
—
—
—
Pro-forma adjusted EBITDA for the trailing twelve months
833.8
674.5
764.2
Net debt
1,568.6
993.4
873.6
Net debt leverage ratio(1)
1.9
1.5
1.1
(1) The Company's net debt to EBITDA ratio for purposes of its term loans and revolving facility was 2.0 and for purposes of U.S. private
placement notes was 2.2x at December 29, 2024. Refer to section 8.2 of this MD&A.
Certain minor rounding variances exist between the consolidated financial statements and this summary.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 57
Return on adjusted average net assets
Return on adjusted average net assets (Adjusted RONA) is defined as the ratio of return to adjusted average net assets
for the last five quarters. Return is defined as adjusted net earnings, excluding net financial expenses and the amortization
of intangible assets (excluding software), net of income tax recoveries related thereto. Average is computed as the sum of
the five quarters divided by five. Adjusted average net assets are defined as the sum of average total assets, excluding
average cash and cash equivalents, average net deferred income taxes, and the average accumulated amortization of
intangible assets excluding software, less average total current liabilities excluding the current portion of lease obligations.
Adjusted average net assets and return are non-GAAP measures used as components of adjusted RONA. The Company
uses adjusted RONA as a performance indicator to measure the efficiency of its invested capital. Management believes
adjusted RONA is useful to investors as a measure of performance and the effectiveness of our use of capital. Adjusted
RONA is not a measure of financial performance under IFRS and may not be defined and calculated by other companies
in the same manner.
December
29, 2024
December
31, 2023
January 1,
2023
(in $ millions)
Average total assets
3,672.4
3,565.7
3,344.4
Average cash and cash equivalents
(89.7)
(97.0)
(118.8)
Average net deferred income taxes
(22.4)
(11.4)
(12.9)
Average accumulated amortization of intangible assets, excluding software
280.0
304.7
254.9
Average total current liabilities, excluding the current portion of lease
obligations and debt
(476.7)
(432.7)
(485.3)
Adjusted average net assets
3,363.6
3,329.3
2,982.3
Twelve months ended
(in $ millions, or otherwise indicated)
December
29, 2024
December
31, 2023
January 1,
2023
Adjusted net earnings
489.7
452.6
574.7
Financial expenses, net (nil income taxes in all years)
104.2
79.7
37.0
Amortization of intangible assets, excluding software, net (nil income taxes in
all three years)
8.1
8.3
13.8
Return
602.0
540.6
625.5
Return on adjusted average net assets (Adjusted RONA)
17.9 %
16.2 %
21.0 %
Certain minor rounding variances exist between the consolidated financial statements and this summary.
Working capital
Working capital is a non-GAAP financial measure and is defined as current assets less current liabilities. Management
believes that working capital, in addition to other conventional financial measures prepared in accordance with IFRS,
provides information that is helpful to understand the financial condition of the Company. The objective of using working
capital is to present readers with a view of the Company from management’s perspective by interpreting the material
trends and activities that affect the short-term liquidity and financial position of the Company, including its ability to
discharge its short-term liabilities as they come due. This measure is not comparable to similarly titled measures used by
other public companies.
December
29, 2024
December
31, 2023
January 1,
2023
(in $ millions)
Cash and cash equivalents
98.8
89.6
150.4
Trade accounts receivable
542.4
412.5
248.8
Inventories
1,110.6
1,089.4
1,225.9
Prepaid expenses, deposits and other current assets
107.0
96.0
101.8
Accounts payable and accrued liabilities
(490.1)
(408.3)
(471.2)
Income taxes payable
(29.7)
(1.6)
(6.6)
Current portion of lease obligations
(17.7)
(14.2)
(13.8)
Current portion of long-term debt
(300.0)
(300.0)
(150.0)
Working capital
1,021.3
963.4
1,085.3
Certain minor rounding variances exist between the consolidated financial statements and this summary.
MANAGEMENT'S DISCUSSION AND ANALYSIS
GILDAN 2024 REPORT TO SHAREHOLDERS 58
MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING
The accompanying consolidated financial statements have been prepared by management and approved by the Board of
Directors of the Company. The consolidated financial statements were prepared in accordance with International Financial
Reporting Standards as issued by the International Accounting Standards Board and, where appropriate, reflect
management’s best estimates and judgments. Where alternative accounting methods exist, management has chosen
those methods deemed most appropriate in the circumstances. Management is responsible for the accuracy, integrity and
objectivity of the consolidated financial statements within reasonable limits of materiality, and for maintaining a system of
internal controls over financial reporting as described in “Management’s annual report on internal control over financial
reporting” included in Management’s Discussion and Analysis for the fiscal year ended December 29, 2024. Management
is also responsible for the preparation and presentation of other financial information included in the 2024 Annual Report
and its consistency with the consolidated financial statements.
The Audit and Finance Committee, which is appointed annually by the Board of Directors and comprised exclusively of
independent directors, meets with management as well as with the independent auditors and internal auditors to satisfy
itself that management is properly discharging its financial reporting responsibilities and to review the consolidated
financial statements and the independent auditors’ report. The Audit and Finance Committee reports its findings to the
Board of Directors for consideration in approving the consolidated financial statements for presentation to the
shareholders. The Audit and Finance Committee considers, for review by the Board of Directors and approval by the
shareholders, the engagement or reappointment of the independent auditors.
The consolidated financial statements have been independently audited by KPMG LLP, on behalf of the shareholders, in
accordance with the standards of the Public Company Accounting Oversight Board (United States). Their report outlines
the nature of their audit and expresses their opinion on the consolidated financial statements of the Company. In addition,
our auditors have issued a report on the Company’s internal controls over financial reporting as of December 29, 2024.
KPMG LLP has direct access to the Audit and Finance Committee of the Board of Directors.
(Signed: Glenn J. Chamandy)
(Signed: Rhodri J. Harries)
Glenn J. Chamandy
Rhodri J. Harries
President and Chief Executive
Officer
Executive Vice-President,
Chief Financial and Administrative
Officer
February 18, 2025
CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 59
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors of Gildan Activewear Inc.:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated statements of financial position of Gildan Activewear Inc.
(the "Company") as of December 29, 2024 and December 31, 2023, the related consolidated statements of
earnings and comprehensive income, changes in equity, and cash flows for the years ended December 29,
2024 and December 31, 2023, and the related notes (collectively, the "consolidated financial statements").
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial
position of the Company as of December 29, 2024 and December 31, 2023, and its financial performance
and its cash flows for the years ended December 29, 2024 and December 31, 2023, in conformity with
International Financial Reporting Standards as issued by the International Accounting Standards Board.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the Company’s internal control over financial reporting as of December 29, 2024,
based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission, and our report dated February 18, 2025 expressed
an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these consolidated financial statements based on our audits. We
are a public accounting firm registered with the PCAOB and are required to be independent with respect to
the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.
CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 60
Page 2
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement, whether due to error or fraud. Our audits included
performing procedures to assess the risks of material misstatement of the consolidated financial statements,
whether due to error or fraud, and performing procedures that respond to those risks. Such procedures
included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated
financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the consolidated financial
statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the
consolidated financial statements that was communicated or required to be communicated to the audit
committee and that: (1) relates to accounts or disclosures that are material to the (consolidated) financial
statements and (2) involved our especially challenging, subjective, or complex judgments. The
communication of a critical audit matter does not alter in any way our opinion on the consolidated financial
statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a
separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Assessment and allocation of inventories costs
As discussed in Note 7 to the consolidated financial statements, the inventories balance as of December 29,
2024 was $1,110.6 million, of which work in process and finished goods represented $940.2 million. As
discussed in Note 3(c) to the consolidated financial statements, inventories are stated at the lower of cost,
determined on a first-in, first-out basis, and net realizable value. As the Company manages its day-to-day
production costs and inventories using a standard costing system, variances arise between these standard
costs and the actual manufacturing costs. Adjustments are therefore required at period-end to measure
inventories at their actual cost. This involves the combination of automated and non-automated systems
and processes using data obtained from different geographical locations to accumulate manufacturing
variances at each stage of the Company’s vertically integrated manufacturing process and identify costs to
be expensed immediately to cost of sales. Such costs include additional costs incurred as a result of
operating below normal capacity and abnormal costs. The Company then applies a variance deferral factor,
based on the number of days of inventories on hand based on the most recent past production, to
determine the variances to be included in ending inventories. The determination of the variance deferral
factor involves estimation.
CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 61
Page 3
We identified the assessment of costs directly related to the conversion of raw materials to finished goods
and the allocation of manufacturing variances to the carrying value of inventories as a critical audit matter. A
higher degree of auditor judgment and audit effort was required in testing the costs included in the carrying
value of inventories and evaluating the variance deferral factor used in allocating the manufacturing
variances given the complexity of the process.
The following are the primary procedures we performed to address this critical audit matter. We evaluated
the design and tested the operating effectiveness of certain internal controls related to the Company’s
inventory costing process, including controls related to: (1) identifying costs to be expensed immediately;
and (2) establishing the variance deferral factor. We tested the eligibility of costs for recognition in
inventories by: (1) assessing the nature of costs included in inventories by inspecting a sample of
transactions recorded as manufacturing costs and tracing them to underlying documentation; (2) analyzing
manufacturing variances to identify the existence of costs to be expensed immediately; and (3) assessing
changes in production activity to identify costs to be expensed immediately. We assessed the variance
deferral factor based on the number of days of inventory on hand determined by reference to the most
recent past production, which included testing certain of the inputs to the calculation.
/s/ KPMG LLP
We have served as the Company’s auditor since 1996.
Montréal, Canada
February 18, 2025
CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 62
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors of Gildan Activewear Inc.
Opinion on Internal Control Over Financial Reporting
We have audited Gildan Activewear Inc.’s and subsidiaries’ (the "Company") internal control over financial
reporting as of December 29, 2024, based on criteria established in Internal Control - Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion,
the Company maintained, in all material respects, effective internal control over financial reporting as of
December 29, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued
by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the consolidated statements of financial position of the Company as of December
29, 2024 and December 31, 2023, the related consolidated statements of earnings and comprehensive
income, changes in equity, and cash flows for the years ended December 29, 2024 and December 31, 2023,
and the related notes (collectively, the "consolidated financial statements"), and our report dated February
18, 2025 expressed an unqualified opinion on those consolidated financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting
and for its assessment of the effectiveness of internal control over financial reporting, included in the
accompanying "Management’s annual report on internal control over financial reporting" included in
Management’s Discussion and Analysis for the year ended December 29, 2024. Our responsibility is to
express an opinion on the Company’s internal control over financial reporting based on our audit. We are a
public accounting firm registered with the PCAOB and are required to be independent with respect to the
Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether effective internal control over
financial reporting was maintained in all material respects. Our audit of internal control over financial
reporting included obtaining an understanding of internal control over financial reporting, assessing the risk
that a material weakness exists, and testing and evaluating the design and operating effectiveness of
internal control based on the assessed risk. Our audit also included performing such other procedures as we
considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our
opinion.
CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 63
Page 2
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. A company’s internal control over
financial reporting includes those policies and procedures that (1) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and (3) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a
material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
/s/ KPMG LLP
Montréal, Canada
February 18, 2025
CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 64
GILDAN ACTIVEWEAR INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands of U.S. dollars)
December
29, 2024
December 31,
2023
Current assets:
Cash and cash equivalents (note 5)
$
98,799
$
89,642
Trade accounts receivable (note 6)
542,359
412,498
Inventories (note 7)
1,110,562
1,089,441
Prepaid expenses, deposits and other current assets
106,964
95,955
Total current assets
1,858,684
1,687,536
Non-current assets:
Property, plant and equipment (note 8)
1,173,240
1,174,515
Right-of-use assets (note 9(a))
95,568
81,447
Intangible assets (note 10)
253,319
261,419
Goodwill (note 10)
271,677
271,677
Deferred income taxes (note 18)
21,800
23,971
Other non-current assets
40,834
14,308
Total non-current assets
1,856,438
1,827,337
Total assets
$
3,715,122
$
3,514,873
Current liabilities:
Accounts payable and accrued liabilities
$
490,073
$
408,294
Income taxes payable
29,668
1,635
Current portion of lease obligations (note 9(b))
17,749
14,161
Current portion of long-term debt (note 11)
300,000
300,000
Total current liabilities
837,490
724,090
Non-current liabilities:
Long-term debt (note 11)
1,235,870
685,000
Lease obligations (note 9(b))
99,671
83,900
Deferred income taxes (note 18)
28,630
18,118
Other non-current liabilities (note 12)
56,810
46,308
Total non-current liabilities
1,420,981
833,326
Total liabilities
2,258,471
1,557,416
Commitments, guarantees and contingent liabilities (note 23)
Equity (note 13):
Share capital
268,557
271,213
Contributed surplus
69,920
61,363
Retained earnings
1,118,201
1,611,231
Accumulated other comprehensive (loss) income (note 14(b))
(27)
13,650
Total equity attributable to shareholders of the Company
1,456,651
1,957,457
Total liabilities and equity
$
3,715,122
$
3,514,873
See accompanying notes to consolidated financial statements.
On behalf of the Board of Directors:
(Signed: Glenn J. Chamandy)
(Signed: Ghislain Houle)
Glenn J. Chamandy
Ghislain Houle
Director
Director
CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 65
GILDAN ACTIVEWEAR INC.
CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME
Fiscal years ended December 29, 2024 and December 31, 2023
(in thousands of U.S. dollars, except per share data)
2024
2023
Net sales (note 26)
$
3,270,590
$
3,195,911
Cost of sales (note 16(c))
2,266,911
2,315,857
Gross profit
1,003,679
880,054
Selling, general and administrative expenses (note 16(a))
390,769
330,391
Gain on sale and leaseback (note 16(e))
—
(25,010)
Net insurance gains (note 16(f))
—
(74,172)
Restructuring and acquisition-related (recoveries) costs (note 17)
(5,329)
45,762
Impairment (Impairment reversal) of intangible assets (note 10)
—
(40,770)
Operating income
618,239
643,853
Financial expenses, net (note 14(c))
104,154
79,670
Earnings before income taxes
514,085
564,183
Income tax expense (note 18)
113,220
30,603
Net earnings
400,865
533,580
Other comprehensive (loss) income, net of related income taxes:
Cash flow hedges (note 14(d))
(13,677)
3,805
Actuarial (loss) gain on employee benefit obligations (note 12(a))
(817)
1,717
(14,494)
5,522
Comprehensive income
$
386,371
$
539,102
Earnings per share (note 19):
Basic
$
2.46
$
3.03
Diluted
$
2.46
$
3.03
See accompanying notes to consolidated financial statements.
CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 66
GILDAN ACTIVEWEAR INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Fiscal years ended December 29, 2024 and December 31, 2023
(in thousands or thousands of U.S. dollars)
Share capital
Contributed
surplus
Accumulated
other
comprehensive
income (loss)
Retained
earnings
Total
Equity
Number
Amount
Balance, January 1, 2023
179,709
$ 202,329
$
79,489
$
9,845
$ 1,590,499
$ 1,882,162
Share-based compensation
—
—
26,804
—
—
26,804
Shares issued under employee share
purchase plan
54
1,622
—
—
—
1,622
Shares issued pursuant to exercise of stock
options
2,054
65,226
(11,609)
—
—
53,617
Shares issued or distributed pursuant to
vesting of restricted share units and SARs
856
17,638
(37,108)
—
—
(19,470)
Shares repurchased for cancellation (note
13(d))
(11,831)
(14,786)
—
—
(355,644)
(370,430)
Share repurchases for settlement of non-
Treasury RSUs (note 13(e))
(856)
(816)
—
—
(25,412)
(26,228)
Deferred compensation to be settled in non-
Treasury RSUs
—
—
2,075
—
—
2,075
Dividends declared
—
—
1,712
—
(133,509)
(131,797)
Transactions with shareholders of the
Company recognized directly in equity
(9,723)
68,884
(18,126)
—
(514,565)
(463,807)
Cash flow hedges (note 14(d))
—
—
—
3,805
—
3,805
Actuarial gain (loss) on employee benefit
obligations (note 12(a))
—
—
—
—
1,717
1,717
Net earnings
—
—
—
—
533,580
533,580
Comprehensive income
—
—
—
3,805
535,297
539,102
Balance, December 31, 2023
169,986
$ 271,213
$
61,363
$
13,650
$ 1,611,231
$ 1,957,457
Share-based compensation
—
—
64,376
—
—
64,376
Shares issued under employee share
purchase plan
43
1,661
—
—
—
1,661
Shares issued pursuant to exercise of stock
options
184
6,304
(947)
—
—
5,357
Shares issued or distributed pursuant to
vesting of restricted share units
658
20,237
(39,439)
—
—
(19,202)
Shares repurchased for cancellation
(including share buyback taxes)
(note 13(d))
(17,735)
(29,670)
—
—
(731,829)
(761,499)
Share repurchases for settlement of non-
Treasury RSUs (note 13(e))
(725)
(1,188)
—
—
(26,505)
(27,693)
Change from equity-settled to cash-settled
arising from change in settlement
—
—
(15,396)
—
—
(15,396)
Payout of employee portion of deferred
compensation
—
—
(1,312)
—
—
(1,312)
Dividends declared
—
—
1,275
—
(134,744)
(133,469)
Transactions with shareholders of the
Company recognized directly in equity
(17,575)
(2,656)
8,557
—
(893,078)
(887,177)
Cash flow hedges (note 14(d))
—
—
—
(13,677)
—
(13,677)
Actuarial gain (loss) on employee benefit
obligations (note 12(a))
—
—
—
—
(817)
(817)
Net earnings
—
—
—
—
400,865
400,865
Comprehensive income
—
—
—
(13,677)
400,048
386,371
Balance, December 29, 2024
152,411
$ 268,557
$
69,920
$
(27)
$ 1,118,201
$ 1,456,651
See accompanying notes to consolidated financial statements.
CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 67
GILDAN ACTIVEWEAR INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Fiscal years ended December 29, 2024 and December 31, 2023
(in thousands of U.S. dollars)
2024
2023
Cash flows from (used in) operating activities:
Net earnings
$ 400,865
$ 533,580
Adjustments for:
Depreciation and amortization (note 20)
138,202
121,644
Non-cash restructuring (recoveries) costs related to property, plant and equipment
(PP&E), right-of-use assets, and computer software (note 17)
(10,948)
18,142
Impairment (Impairment reversal) of intangible assets (note 10)
—
(40,770)
Cash settled share-based awards in connection with outgoing executives' termination
benefits
(15,396)
—
Gain on disposal of PP&E and right-of-use assets
(212)
(24,584)
Share-based compensation
64,529
26,957
Deferred income taxes (note 18)
12,665
10,147
Other (note 21 (a))
(22,396)
(14,042)
Changes in working capital balances (note 21 (c))
(65,921)
(84,468)
Cash flows from (used in) operating activities
501,388
546,606
Cash flows from (used in) investing activities:
Purchase of property, plant and equipment
(145,332) (203,289)
Purchase of intangible assets
(5,020)
(4,720)
Proceeds from sale and leaseback, disposal of assets held for sale and other disposals
of PP&E
38,236
53,151
Cash flows from (used in) investing activities
(112,116) (154,858)
Cash flows from (used in) financing activities:
Decrease in amounts drawn under revolving long-term bank credit facility
(235,000)
(95,000)
Proceeds from term loan (note 11)
300,000
—
Payment of notes (note 11)
—
(150,000)
Proceeds from issuance of Senior unsecured notes (note 11)
500,000
—
Proceeds from delayed draw term loan (note 11)
—
300,000
Payment of lease obligations (note 9(b))
(15,244)
(24,894)
Dividends paid
(133,469) (131,797)
Proceeds from the issuance of shares
6,865
55,086
Repurchase and cancellation of shares (note 13(d))
(755,608) (360,479)
Share repurchases for settlement of non-Treasury RSUs (note 13(e))
(27,693)
(26,228)
Withholding taxes paid pursuant to the settlement of non-Treasury RSUs
(19,202)
(19,470)
Cash flows from (used in) financing activities
(379,351) (452,782)
Effect of exchange rate changes on cash and cash equivalents denominated in foreign
currencies
(764)
259
Net increase (decrease) in cash and cash equivalents during the fiscal year
9,157
(60,775)
Cash and cash equivalents, beginning of fiscal year
89,642
150,417
Cash and cash equivalents, end of fiscal year
$
98,799
$
89,642
Cash paid (included in cash flows from operating activities):
Interest
78,227
66,398
Income taxes, net of refunds
47,949
24,340
Supplemental disclosure of cash flow information (note 21)
See accompanying notes to consolidated financial statements.
CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 68
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal years ended December 29, 2024 and December 31, 2023
(Tabular amounts in thousands or thousands of U.S. dollars except per share data, unless otherwise indicated)
1. REPORTING ENTITY:
Gildan Activewear Inc. (the "Company" or "Gildan") is domiciled in Canada and is incorporated under the Canada
Business Corporations Act. Its principal business activity is the manufacture and sale of activewear, hosiery and
underwear. The Company's fiscal year ends on the Sunday closest to December 31 of each year.
The address of the Company’s registered office is 600 de Maisonneuve Boulevard West, Suite 3300, Montreal, Quebec.
These consolidated financial statements are as at and for the fiscal years ended December 29, 2024 (fiscal 2024) and
December 31, 2023 (fiscal 2023) and include the accounts of the Company and its subsidiaries. The Company is a
publicly listed entity and its shares are traded on the Toronto Stock Exchange and New York Stock Exchange under the
symbol GIL.
2. BASIS OF PREPARATION:
(a) Statement of compliance:
These consolidated financial statements have been prepared in accordance with International Financial Reporting
Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).
These consolidated financial statements for the fiscal year ended December 29, 2024 were authorized for issuance
by the Board of Directors of the Company on February 18, 2025.
(b) Basis of measurement:
These consolidated financial statements have been prepared on the historical cost basis except for the following
items in the consolidated statements of financial position:
•
Derivative financial instruments which are measured at fair value;
•
Employee benefit obligations related to defined benefit plans which are measured at the present value of the
defined benefit obligations, net of advance payments made to employees thereon;
•
Liabilities for cash-settled share-based payment arrangements which are measured at fair value, and equity-
classified share-based payment arrangements which are measured at fair value at grant date pursuant to IFRS
2, Share-based payment;
•
Discontinued, damaged, and excess finished inventories which are carried at the net realizable value;
•
Provisions for decommissioning, site restoration costs, and onerous contracts which are measured at the present
value of the expenditures expected to be required to settle the obligation; and
•
Identifiable assets acquired and liabilities assumed in connection with a business combination which are initially
measured at fair value.
These consolidated financial statements are presented in U.S. dollars, which is the Company's functional currency.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 69
2. BASIS OF PREPARATION (continued):
(c) Initial application of new or amended accounting standards:
During the year ended December 29, 2024, the Company adopted the following new or amended accounting
standards:
Amendments to International Accounting Standard ("IAS") 1, Presentation of Financial Statements
On January 23, 2020, the IASB issued narrow-scope amendments to IAS 1, Presentation of Financial Statements, to
clarify how to classify debt and other liabilities as current or non-current. The amendments (which affect only the
presentation of liabilities in the statement of financial position) clarify that the classification of liabilities as current or
non-current should be based on rights that are in existence at the end of the reporting period to defer settlement by at
least twelve months and make explicit that only rights in place at the end of the reporting period should affect the
classification of a liability; clarify that classification is unaffected by expectations about whether an entity will exercise
its right to defer settlement of a liability; and make clear that settlement refers to the transfer to the counterparty of
cash, equity instruments, other assets, or services. On October 31, 2022, the IASB issued Non-current Liabilities with
Covenants (Amendments to IAS 1). These further amendments clarify how to address the effects on classification
and disclosure of covenants which an entity is required to comply with on or before the reporting date and covenants
which an entity must comply with only after the reporting date. The 2020 amendments and the 2022 amendments
(collectively “the Amendments”) are effective for annual periods beginning on or after January 1, 2024 and are applied
retrospectively. The amendment of IAS 1 had no impact on the Company’s consolidated financial statements.
IAS 12 Amendment International Tax Reform - Pillar Two Model Rules
In May 2023, the International Accounting Standards Board issued the IAS 12 Amendment International Tax Reform -
Pillar Two Model Rules on mandatory relief for accounting for deferred taxes from the global minimum taxation. The
amendments provide a temporary exception from the requirement to recognize and disclose deferred taxes arising
from enacted or substantively enacted tax law that implements the Pillar Two model rules published by the OECD,
including tax law that implements qualified domestic minimum top-up taxes described in those rules. The
amendments also introduced targeted disclosure requirements in the notes for affected entities to enable users of
financial statements to understand the extent to which an entity will be affected by the minimum tax, particularly
before the legislation comes into force. The amendments to IAS 12 were effective for annual periods beginning on or
after January 1, 2023. The Company updated its disclosures in its 2023 annual consolidated financial statements for
the year ended December 31, 2023, with further updated disclosures in these annual consolidated financial
statements for the year ended December 29, 2024. The Company applied the mandatory temporary exemption from
recognizing and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes in
the Company's consolidated financial statements for the year ended December 29, 2024.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 70
3. MATERIAL ACCOUNTING POLICY INFORMATION:
The accounting policies set out below have been applied consistently to all periods presented in these consolidated
financial statements, unless otherwise indicated.
(a) Basis of consolidation:
(i) Subsidiaries:
Subsidiaries are entities controlled by the Company. The financial statements of subsidiaries are included in the
consolidated financial statements from the date that control commences until the date that control ceases. The
accounting policies of subsidiaries are aligned with the policies adopted by the Company. Intragroup
transactions, balances, and unrealized gains or losses on transactions between group companies are eliminated.
The Company’s principal subsidiaries, their jurisdiction of incorporation, and the Company’s percentage
ownership share of each are as follows:
Subsidiary
Jurisdiction of
incorporation
Ownership
percentage
Gildan Activewear SRL
Barbados
100 %
Gildan Yarns, LLC
Delaware
100 %
Gildan USA LLC
Delaware
100 %
Gildan Honduras Properties, S. de R.L.
Honduras
100 %
Gildan Activewear (UK) Limited
United Kingdom
100 %
Gildan Activewear EU SRL
Belgium
100 %
Gildan Textiles de Sula, S. de R.L.
Honduras
100 %
G.A.B. Limited
Bangladesh
100 %
SDS International Limited
Bangladesh
100 %
Gildan Activewear (Eden) Inc.
North Carolina
100 %
Gildan Hosiery Rio Nance, S. de R.L.
Honduras
100 %
Gildan Mayan Textiles, S. de R.L.
Honduras
100 %
Gildan Charleston Inc.
Delaware
100 %
Gildan Activewear Dominican Republic Textile Company Inc.
Barbados
100 %
Gildan Choloma Textiles, S. de R. L.
Honduras
100 %
The Company has no other subsidiaries representing individually more than 10% of the total consolidated assets
and 10% of the consolidated net sales of the Company, or in the aggregate more than 20% of the total
consolidated assets and the consolidated net sales of the Company as at and for the fiscal year ended
December 29, 2024.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 71
3. MATERIAL ACCOUNTING POLICY INFORMATION (continued):
(b) Trade accounts receivable:
Trade accounts receivable consist of amounts due from our normal business activities. An allowance for expected
credit losses is maintained to reflect an impairment risk for trade accounts receivable based on an expected credit
loss model which factors in changes in credit quality since the initial recognition of trade accounts receivable based
on customer risk categories. Expected credit losses are also provided for based on collection history and specific
risks identified on a customer-by-customer basis. Trade accounts receivable are presented net of allowances for
expected credit losses, sales discounts, and sales returns when the Company has a right to offset the amounts.
The Company may continuously sell trade accounts receivables of certain designated customers to a third-party
financial institution in exchange for a cash payment equal to the face value of the sold trade receivables less an
applicable discount. The Company retains servicing responsibilities, including collection, for these trade accounts
receivables but does not retain any credit risk with respect to any trade accounts receivables that have been sold. All
trade accounts receivables sold under the receivables purchase agreement are removed from the consolidated
statements of financial position, as the sale of the trade accounts receivables qualify for de-recognition. The net cash
proceeds received by the Company are included as cash flows from operating activities in the consolidated
statements of cash flows. The difference between the carrying amount of the trade accounts receivables sold under
the agreement and the cash received at the time of transfer is recorded in the statement of earnings and
comprehensive income within financial expenses.
(c)
Inventories:
Inventories are stated at the lower of cost and net realizable value. The cost of inventories is based on the first-in,
first-out principle, and reflect the various stages of production that inventories have reached at period-end. Inventory
costs include the purchase price and other costs directly related to the acquisition of raw materials and spare parts
held for use in the manufacturing process, and the cost of purchased finished goods. Inventory costs also include the
costs directly related to the conversion of materials to finished goods, such as direct labour, and a systematic
allocation of fixed and variable production overhead, including manufacturing depreciation expense. The allocation of
fixed production overhead to the cost of inventories is based on the normal capacity of the production facilities.
Additional costs incurred as a result of operating below the normal capacity of the production facilities are excluded
from the carrying value of inventories and charged directly to cost of sales. Normal capacity is the average production
expected to be achieved during the fiscal year, under normal circumstances. The Company manages its day-to-day
production costs and inventories using a standard inventory costing system whereby the cost of a product is
determined using pre-established rates for materials, labour and production overhead expenses based on the
manufacturing specifications of the product. At period end, the Company assesses whether the variances between
the standard costs and the actual costs incurred relate to the conversion of materials to finished goods, or if they
represent abnormal costs that should be charged directly to cost of sales. The carrying value of inventories is then
adjusted to record the manufacturing variances related to inventories still on hand and manufacturing variances
related to inventories that have been sold are charged to cost of sales, through an allocation method which uses an
estimated variance deferral factor based on the number of days of inventory on hand based on the most recent past
production. The Company's inventory costing process involves a combination of automated and non-automated
systems and processes using data obtained from different geographical locations to accumulate manufacturing
variances at each stage of the Company's vertically integrated manufacturing process and identify costs to be
expensed immediately. Net realizable value is the estimated selling price of finished goods in normal sales channels,
or where applicable, liquidation channels, less the estimated costs of completion and selling expenses. Raw
materials, work in progress, and spare parts inventories are not written down if the finished products in which they will
be incorporated are expected to be sold at or above cost.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 72
3. MATERIAL ACCOUNTING POLICY INFORMATION (continued):
(c)
Inventories (continued):
The cost of inventories may no longer be recoverable if inventories are discontinued, damaged, in excess quantities,
or if their selling prices or estimated forecast of product demand decline. Discontinued, damaged, and excess
inventories are carried at the net realizable value, as those inventories are sold below cost in liquidation channels. In
determining the net realizable value of finished goods, the Company considers recent recovery rates and current
market conditions in these channels. The Company regularly reviews inventory quantities on hand, current production
plans, and forecasted future sales, and inventories are written down to net realizable value when it is determined that
they are no longer fully recoverable. There is estimation uncertainty in relation to the identification of excess
inventories used in establishing the net realizable value. As at December 29, 2024, a 10% decrease or increase in the
expected selling prices used to establish the net realizable value of discontinued, damaged, and excess inventories
would not result in either a material decrease or an increase in inventories. If actual market conditions are less
favorable than previously projected or if liquidation of the inventory which is no longer deemed fully recoverable is
more difficult than anticipated, additional write-downs may be required.
(d) Assets held for sale:
Non-current assets which are classified as assets held for sale are reported in current assets in the statement of
financial position, when their carrying amount is to be recovered principally through a sale transaction rather than
through continuing use, and a sale is considered highly probable. Assets held for sale are stated at the lower of their
carrying amount and fair value less costs to sell.
(e) Property, plant and equipment:
Property, plant and equipment are initially recorded at cost and are subsequently carried at cost less any
accumulated depreciation and any accumulated impairment losses. The cost of an item of property, plant and
equipment includes expenditures that are directly attributable to the acquisition or construction of an asset. The cost
of self-constructed assets includes the cost of materials and direct labour, site preparation costs, initial delivery and
handling costs, installation and assembly costs, and any other costs directly attributable to bringing the assets to the
location and condition necessary for the assets to be capable of operating in the manner intended by management.
The cost of property, plant and equipment also includes, when applicable, borrowing costs, as well as the initial
present value estimate of the costs of decommissioning or dismantling and removing the asset and restoring the site
on which it is located at the end of its useful life, which is amortized over the remaining life of the underlying asset.
Purchased software that is integral to the functionality of the related equipment is capitalized as part of other
equipment. Subsequent costs are included in an asset’s carrying amount or recognized as a separate asset, as
appropriate, only when it is probable that future economic benefits are present and the cost of the item can be
measured reliably. When property, plant and equipment are replaced they are fully written down. Gains and losses on
the disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal
with the carrying amount of property, plant and equipment and are recognized in the statement of earnings and
comprehensive income.
Land is not depreciated. The cost of property, plant and equipment less its residual value, if any, is depreciated on a
straight-line basis over the following estimated useful lives:
Asset
Useful life
Buildings and improvements(1)
5 to 40 years
Manufacturing equipment(2)
2 to 20 years
Other equipment
3 to 10 years
(1) The majority of the Company's buildings are depreciated over a 30 to 40 year period.
(2) The majority of the Company's manufacturing equipment is depreciated over a 15 to 20 year period.
The useful lives of the Company’s equipment are generally not impacted by climate-related transitional matters
because the Company generally expects to make additions at the end of their useful lives.
Assets not yet utilized in operations include expenditures incurred to date for plant constructions or expansions which
are still in process and equipment not yet placed into service as at the reporting date. Depreciation on these assets
commences when the assets are available for use.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 73
3. MATERIAL ACCOUNTING POLICY INFORMATION (continued):
(f)
Intangible assets:
Definite life intangible assets are measured at cost less accumulated amortization and any accumulated impairment
losses. Intangible assets include identifiable intangible assets acquired and consist of customer contracts and
customer relationships, license agreements, trademarks, and non-compete agreements. Intangible assets also
include computer software that is not an integral part of the related hardware. Indefinite life intangible assets
represent intangible assets which the Company controls, which have no contractual or legal expiration date and
therefore are not amortized as there is no foreseeable time limit to their useful economic life. An assessment of
indefinite life intangible assets is performed annually to determine whether events and circumstances continue to
support an indefinite useful life and any change in the useful life assessment from indefinite to finite is accounted for
as a change in accounting estimate on a prospective basis.
Intangible assets with finite lives are amortized on a straight-line basis over the following estimated useful lives:
Asset
Useful life
Customer contracts and customer relationships
7 to 20 years
License agreements
3 to 10 years
Computer software
4 to 7 years
Trademarks with a finite life
5 years
Non-compete agreements
2 years
Most of the Company's trademarks are not amortized as they are considered to be indefinite life intangible assets.
The costs of information technology projects that are directly attributable to the design and testing of identifiable and
unique software products, including internally developed computer software, are recognized as intangible assets
when the following criteria are met:
•
it is technically feasible to complete the software product so that it will be available for use;
•
management intends to complete the software product and use it;
•
there is an ability to use the software product;
•
it can be demonstrated how the software product will generate probable future economic benefits;
•
adequate technical, financial, and other resources to complete the development and to use the software product
are available; and
•
the expenditures attributable to the software product during its development can be reliably measured.
Other development expenditures that do not meet these criteria are recognized as an expense in the consolidated
statements of earnings and comprehensive income as incurred.
(g) Goodwill:
Goodwill is measured at cost less accumulated impairment losses, if any. Goodwill arises on business combinations
and is measured as the excess of the consideration transferred and the recognized amount of the non-controlling
interest in the acquired business, if any, over the fair value of identifiable assets acquired and liabilities assumed of an
acquired business.
(h) Impairment of non-financial assets:
Non-financial assets that have an indefinite useful life such as goodwill and trademarks are not subject to
amortization and are therefore tested annually for impairment or more frequently if events or changes in
circumstances indicate that the asset might be impaired. Assets that are subject to amortization are assessed at the
end of each reporting period as to whether there is any indication of impairment or whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the
amount by which the carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an
asset’s value in use and fair value less costs of disposal. The recoverable amount is determined for an individual
asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or
groups of assets, in which case assets are grouped at the lowest levels for which there are separately identifiable
cash inflows (i.e., cash-generating units or "CGUs").
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 74
3. MATERIAL ACCOUNTING POLICY INFORMATION (continued):
(h) Impairment of non-financial assets (continued):
A goodwill impairment loss is not reversed. Impairment losses on non-financial assets other than goodwill recognized
in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer
exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable
amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the
carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had
been recognized.
The calculation of fair value less costs of disposal or value in use for purposes of measuring the recoverable amount
of non-financial assets involves the use of key assumptions and estimates with respect to a variety of factors,
including estimated sales volumes, selling prices, input costs, SG&A expenses, cash flows, capital expenditures, and
the selection of an appropriate earnings multiple or discount rate, all of which are subject to inherent uncertainties and
subjectivity. The assumptions are based on annual business plans and other forecasted results, earnings multiples
obtained by using market comparables as references, and discount rates which are used to reflect market-based
estimates of the risks associated with the projected cash flows, based on the best information available as of the date
of the impairment test. Changes in circumstances, such as technological advances, adverse changes in third-party
licensing arrangements, changes to the Company’s business strategy, and changes in economic and market
conditions can result in actual useful lives and future cash flows that differ significantly from estimates and could
result in increased charges for amortization or impairment. There can be no assurance that the estimates and
assumptions used in the impairment tests will prove to be accurate predictions of the future. If the future adversely
differs from management’s best estimate of key economic assumptions and the associated cash flows materially
decrease, the Company may be required to record material impairment charges or accelerated depreciation and
amortization charges related to its non-financial assets. Please refer to note 11 for additional details on the
recoverability of the Company’s cash-generating units.
(i)
Financial instruments:
The Company initially recognizes financial instruments on the trade date at which the Company becomes a party to
the contractual provisions of the instrument. Financial instruments are initially measured at fair value. If the financial
instrument is not subsequently accounted for at fair value through profit or loss, then the initial measurement includes
transaction costs that are directly attributable to the instrument’s acquisition or origination. On initial recognition, the
Company classifies its financial assets or financial liabilities as subsequently measured at either amortized cost or fair
value, depending on its business model for managing the financial instruments and the contractual cash flow
characteristics of the financial instruments.
Financial assets
Financial assets are classified into the following categories and depend on the purpose for which the financial assets
were acquired.
Financial assets measured at amortized cost
A financial asset is subsequently measured at amortized cost, using the effective interest method and net of any
impairment loss, if:
•
The asset is held within a business model whose objective is to hold assets in order to collect contractual
cash flows; and
•
The contractual terms of the financial asset give rise, on specified dates, to cash flows that are solely
payments of principal and/or interest.
The Company currently classifies its cash and cash equivalents, trade accounts receivable, certain other current
assets (excluding derivative financial instruments designated as effective hedging instruments), and long-term
non-trade receivables as financial assets measured at amortized cost. The Company de-recognizes a financial
asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the
contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of
ownership of the financial asset are transferred.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 75
3. MATERIAL ACCOUNTING POLICY INFORMATION (continued):
(i)
Financial instruments (continued):
Financial assets (continued)
Financial assets measured at fair value
These assets are measured at fair value and changes therein, including any interest or dividend income, are
recognized in profit or loss. However, for investments in equity instruments that are not held for trading, the
Company may elect at initial recognition to present gains and losses in other comprehensive income. For such
investments measured at fair value through other comprehensive income, gains and losses are never
reclassified to profit or loss, and no impairment is recognized in profit or loss. Dividends earned from such
investments are recognized in profit or loss, unless the dividend clearly represents a repayment of part of the
cost of the investment. The Company currently has no significant financial assets measured at fair value other
than derivative financial instruments.
Financial liabilities
Financial liabilities are classified into the following categories.
Financial liabilities measured at amortized cost
A financial liability is subsequently measured at amortized cost, using the effective interest method. The
Company currently classifies accounts payable and accrued liabilities (excluding derivative financial instruments
designated as effective hedging instruments), and long-term debt bearing interest at variable and fixed rates as
financial liabilities measured at amortized cost.
Financial liabilities measured at fair value
Financial liabilities at fair value are initially recognized at fair value and are remeasured at each reporting date
with any changes therein recognized in net earnings. The Company currently has no significant financial liabilities
measured at fair value.
Fair value of financial instruments
Financial instruments measured at fair value use the following fair value hierarchy to prioritize the inputs used in
measuring fair value:
•
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
•
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices); and
•
Level 3: inputs for the asset or liability that are not based on observable market data.
Impairment of financial assets
The Company recognizes loss allowances for expected credit losses on financial assets measured at amortized cost.
The Company recognizes a loss allowance at an amount equal to the lifetime expected credit losses if the credit risk
on that financial instrument has increased significantly since initial recognition. Otherwise, the loss allowance for that
financial instrument corresponds to an amount equal to twelve-month expected credit losses. The Company uses the
simplified method to measure the loss allowance for trade receivables at lifetime expected losses. The Company
uses historical trends of default, the timing of recoveries and the amount of loss incurred, adjusted for management’s
judgement as to whether current economic and credit conditions are such that the actual losses are likely to be
greater or less than suggested by historical trends. Losses are recognized in the consolidated statements of income
and reflected in an allowance account against trade and other receivables.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 76
3. MATERIAL ACCOUNTING POLICY INFORMATION (continued):
(j)
Derivative financial instruments and hedging relationships:
The Company enters into derivative financial instruments to hedge its market risk exposures. On initial designation of
the hedge, the Company formally documents the relationship between the hedging instruments and hedged items,
including the risk management objectives and strategy in undertaking the hedge transaction, together with the
methods that will be used to assess the effectiveness of the hedging relationship. The Company makes an
assessment, both at the inception of the hedge relationship as well as on an ongoing basis, whether the hedging
instruments are expected to be effective in offsetting the changes in cash flows of the respective hedged items during
the period for which the hedge is designated. For a cash flow hedge of a forecasted transaction, the transaction
should be highly probable to occur and should present an exposure to variations in cash flows that could ultimately
affect reported net earnings.
Derivatives are recognized initially at fair value, and attributable transaction costs are recognized in net earnings as
incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted
for as described below.
Cash flow hedges
When a derivative is designated as the hedging instrument in a hedge of the variability in cash flows attributable to a
particular risk associated with a highly probable forecasted transaction that could affect net earnings, the effective
portion of changes in the fair value of the derivative is recognized in other comprehensive income and presented in
accumulated other comprehensive income as part of equity. The amount recognized in other comprehensive income
is removed and included in net earnings under the same line item in the consolidated statements of earnings and
comprehensive income as the hedged item, in the same period that the hedged cash flows affect net earnings. When
a hedged forecasted transaction subsequently results in the recognition of a non-financial asset or liability, the cash
flow hedge reserve is removed from accumulated other comprehensive income and included in the initial cost or
carrying amount of the asset or liability. Any ineffective portion of changes in the fair value of the derivative is
recognized immediately in net earnings. If the hedging instrument no longer meets the criteria for hedge accounting,
expires or is sold, terminated, exercised, or the designation is revoked, then hedge accounting is discontinued
prospectively. If the forecasted transaction is no longer expected to occur, then the balance in accumulated other
comprehensive income is recognized immediately in net earnings.
(k)
Employee benefits:
Defined contribution plans
The Company offers group defined contribution plans to eligible employees whereby the Company matches
employees' contributions up to a fixed percentage of the employee's salary. Contributions by the Company to trustee-
managed investment portfolios or employee associations are expensed as incurred. Benefits are also provided to
employees through defined contribution plans administered by the governments in the countries in which the
Company operates. The Company’s contributions to these plans are recognized in the period when services are
rendered.
Defined benefit plans
The Company maintains a liability for statutory severance obligations for active employees primarily located in the
Caribbean and Central America which is payable to the employees in a lump sum payment upon termination of
employment. The liability is based on management’s best estimates of the ultimate costs to be incurred to settle the
liability and is based on a number of assumptions and factors, including historical trends, actuarial assumptions and
economic conditions. Liabilities related to defined benefit plans are included in other non-current liabilities in the
consolidated statements of financial position. Service costs, interest costs, and costs related to the impact of program
changes are recognized in cost of sales in the consolidated statements of earnings. Actuarial gains and losses arising
from experience adjustments and changes in actuarial assumptions are recognized directly to other comprehensive
income in the period in which they arise, and are immediately transferred to retained earnings without reclassification
to net earnings in a subsequent period.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 77
3. MATERIAL ACCOUNTING POLICY INFORMATION (continued):
(l)
Provisions:
Decommissioning and site restoration costs
The Company recognizes decommissioning and site restoration obligations for future removal and site restoration
costs associated with the restoration of certain property and plant should it decide to discontinue some of its activities.
(m) Share capital:
Common shares are classified as equity. Incremental costs directly attributable to the issuance of common shares
and stock options are recognized as a deduction from equity, net of any tax effects.
When the Company repurchases its own shares, the consideration paid, including any directly attributable
incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders until the
shares are cancelled or reissued. When the shares are cancelled, the excess of the consideration paid over the
average stated value of the shares purchased for cancellation is charged to retained earnings.
(n) Revenue recognition:
The Company derives revenue from the sale of finished goods, which include activewear, hosiery, and underwear.
The Company recognizes revenue at a point in time when it transfers control of the finished goods to a customer,
which generally occurs upon shipment of the finished goods from the Company’s facilities. In certain arrangements,
control is transferred and revenue is recognized upon delivery of the finished goods to the customer’s premises.
Some arrangements for the sale of finished goods provide for customer price discounts, rights of return and/or
volume rebates based on aggregate sales over a specified period, which gives rise to variable consideration. At the
time of sale, estimates are made for items giving rise to variable consideration based on the terms of the sales
program or arrangement. The variable consideration is estimated at contract inception using the most likely amount
method and revenue is only recognized to the extent that a significant reversal of revenue is not expected to occur.
The estimate is based on historical experience, current trends, and other known factors. New sales incentive
programs which relate to sales made in a prior period are recognized at the time the new program is introduced.
Sales are recorded net of customer discounts, rebates, and estimated sales returns, and exclude sales taxes. A
provision is recognized for expected returns in relation to sales made before the end of the reporting period.
Consideration payable to a customer that is not considered a distinct good or service from the customer, such as one-
time fees paid to customers for product placement or product introduction, is accounted for as a reduction of the
transaction price, and the Company recognizes the reduction of revenue at the later of when Company recognizes
revenue for the transfer of the related goods to the customer or when the Company pays or promises to pay the
consideration.
(o) Cost of sales and gross profit:
Cost of sales includes all raw material costs, manufacturing conversion costs, including manufacturing depreciation
expense, sourcing costs, inbound freight and inter-facility transportation costs, and outbound freight to customers.
Cost of sales also includes the cost of purchased finished goods, costs relating to purchasing, receiving and
inspection activities, manufacturing administration, third-party manufacturing services, sales-based royalty costs,
insurance, inventory write-downs, and customs and duties. Gross profit is the result of net sales less cost of sales.
The Company’s gross profit may not be comparable to gross profit as reported by other companies, since some
entities include warehousing and handling costs, and/or exclude depreciation expense, outbound freight to customers
and royalty costs from cost of sales.
(p) Selling, general and administrative expenses:
Selling, general and administrative (“SG&A”) expenses include warehousing and handling costs, selling and
administrative personnel costs, advertising and marketing expenses, costs of leased non-manufacturing facilities and
equipment, professional fees, non-manufacturing depreciation expense, and other general and administrative
expenses. SG&A expenses also include amortization of intangible assets.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 78
3. MATERIAL ACCOUNTING POLICY INFORMATION (continued):
(q) Restructuring and acquisition-related costs:
Restructuring and acquisition-related costs are expensed when incurred, or when a legal or constructive obligation
exists. Restructuring and acquisition-related costs are comprised of costs directly related to significant exit activities,
including the closure of business locations or the relocation of business activities, significant changes in management
structure, as well as transaction and integration costs incurred pursuant to business acquisitions. The nature of
expenses included in restructuring and acquisition-related costs may include: severance and termination benefits,
including the termination of employee benefit plans; gains or losses from the remeasurement and disposal of assets
held for sale; write-downs of property, plant and equipment, right-of-use assets, and software related to exit activities;
facility exit and closure costs, including the costs of physically transferring inventory and fixed assets to other
facilities; costs of integrating the IT systems of an acquired business to Gildan’s existing IT systems; legal, accounting
and other professional fees (excluding costs of issuing debt or equity) directly incurred in connection with a business
acquisition; purchase gains on business acquisitions; losses on business acquisitions achieved in stages; contingent
amounts payable to selling shareholders under their employment agreements pursuant to a business acquisition; and
the remeasurement of liabilities related to contingent consideration incurred in connection with a business acquisition.
(r)
Cotton and cotton-based yarn procurement:
The Company contracts to buy cotton and cotton-based yarn with future delivery dates at fixed prices in order to
reduce the effects of fluctuations in the prices of cotton used in the manufacture of its products. These contracts are
not used for trading purposes and are not considered to be financial instruments as they are entered into for purchase
and receipt in accordance with the Company’s expected usage requirements, and therefore are not measured at fair
value. The Company commits to fixed prices on a percentage of its cotton and cotton-based yarn requirements up to
twenty-four months in the future. If the cost of committed prices for cotton and cotton-based yarn plus estimated costs
to complete production exceed current selling prices, a loss is recognized for the excess as a charge to cost of sales.
(s)
Government assistance:
Government assistance is recognized only when there is reasonable assurance the Company will comply with all
related conditions for receipt of the assistance. Government assistance, including grants and tax credits, related to
operating expenses is accounted for as a reduction to the related expenses. Government assistance, including
monetary and non-monetary grants and tax credits related to the acquisition of property, plant and equipment, is
accounted for as a reduction of the cost of the related property, plant and equipment, and is recognized in net
earnings using the same methods, periods and rates as for the related property, plant and equipment.
(t)
Financial expenses (income):
Financial expenses (income) include: interest expense on borrowings, including realized gains and/or losses on
interest rate swaps designated for hedge accounting; bank and other financial charges; amortization of debt facility
fees, discount on the sales of trade accounts receivable; interest income on funds invested; interest on lease
obligations; accretion of interest on discounted provisions; net foreign currency losses and/or gains; and losses and/
or gains on financial derivatives that do not meet the criteria for effective hedge accounting.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 79
3. MATERIAL ACCOUNTING POLICY INFORMATION (continued):
(u) Income taxes:
Income tax expense is comprised of current and deferred income taxes, and is included in net earnings except to the
extent that it relates to a business acquisition, or items recognized directly in equity or in other comprehensive
income. Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax
rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous
years.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to be applied to temporary
differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting
date, for all temporary differences caused when the tax bases of assets and liabilities differ from those reported in the
financial statements. The Company recognizes deferred income tax assets for unused tax losses and deductible
temporary differences only to the extent that, in management’s opinion, it is probable that future taxable profit will be
available against which the temporary differences can be utilized. Deferred tax assets are reviewed at each reporting
date and are derecognized to the extent that it is no longer probable that the related tax benefit will be realized.
Deferred income tax is not recognized for the following temporary differences: the initial recognition of assets or
liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or
loss at the time of the transaction; and, where the timing of the reversal of a temporary difference is controlled by the
Company and it is probable that the temporary difference will not reverse in the foreseeable future. In addition,
deferred tax is not recognized for taxable temporary differences arising on the initial recognition of goodwill.
The Company has determined that income taxes arising from legislation enacted or substantively enacted to
implement the Pillar Two model rules, including legislation implementing qualified domestic minimum top-up taxes,
are income taxes within the scope of IAS 12. The Company accounts for such income taxes as a current tax when it
is incurred.
In determining the amount of current and deferred income taxes, the Company takes into account the impact of
uncertain tax positions and whether additional taxes and interest may be due. Provisions for uncertain tax positions
are measured at the best estimate of the amounts expected to be paid upon ultimate resolution. The Company
periodically reviews and adjusts its estimates and assumptions of income tax assets and liabilities as circumstances
warrant, such as changes to tax laws, administrative guidance, change in management’s assessment of the technical
merits of its positions due to new information, and the resolution of uncertainties through either the conclusion of tax
audits or expiration of prescribed time limits within relevant statutes.
(v)
Earnings per share:
Basic earnings per share are computed by dividing net earnings by the weighted average number of common shares
outstanding for the year. Diluted earnings per share are computed using the weighted average number of common
shares outstanding for the period adjusted to include the dilutive impact of stock options and restricted share units.
The number of additional shares is calculated by assuming that all common shares held in trust for the purpose of
settling non-Treasury restricted share units have been delivered, all dilutive outstanding options are exercised and all
dilutive outstanding Treasury restricted share units have vested, and that the proceeds from such exercises, as well
as the amount of unrecognized share-based compensation which is considered to be assumed proceeds, are used to
repurchase common shares at the average share price for the period. For Treasury restricted share units, only the
unrecognized share-based compensation is considered assumed proceeds since there is no exercise price paid by
the holder.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 80
3. MATERIAL ACCOUNTING POLICY INFORMATION (continued):
(w) Share-based payments:
Stock options, Stock appreciation rights, Treasury and non-Treasury restricted share units
Stock options, Stock appreciation rights ("SARs"), Treasury restricted share units, and non-Treasury restricted share
units are equity settled share-based payments, which are measured at fair value at the grant date. For stock options
and SARs, the compensation cost is measured using the Black-Scholes option pricing model and is expensed over
the award's vesting period. For Treasury and non-Treasury restricted share units, compensation cost is measured at
the fair value of the underlying common share at the grant date and is expensed over the award's vesting period. For
Treasury restricted share units, issued with market performance objectives, compensation cost is measured using a
Monte Carlo model considering market performance conditions at grant date and is expensed over the award’s
vesting period. Compensation expense is recognized in net earnings with a corresponding increase in contributed
surplus. Any consideration paid by plan participants on the exercise of stock options is credited to share capital. Upon
the exercise of stock options, the vesting of Treasury restricted share units, and upon delivery of the common shares
for settlement of vesting non-Treasury restricted share units or SARs, the corresponding amounts previously credited
to contributed surplus are transferred to share capital. The number of non-Treasury restricted share units remitted to
the participants upon settlement is equal to the number of non-Treasury restricted share units awarded less units
withheld to satisfy the participants' statutory withholding tax requirements. Stock options and Treasury restricted
share units that are dilutive and meet performance conditions as at the reporting date are considered in the
calculation of diluted earnings per share, as per note 3(v) to these consolidated financial statements.
Estimates for forfeitures and performance conditions
The measurement of compensation expense for stock options, SARs, Treasury restricted share units and non-
Treasury restricted share units is net of estimated forfeitures. For the portion of Treasury restricted share units and
non-Treasury restricted share units that are issuable based on non-market performance conditions, the amount
recognized as an expense is adjusted to reflect the number of awards for which the related service and performance
conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the
number of awards that do meet the related service and non-market performance conditions at the vesting date.
Deferred share unit plan
The Company has a deferred share unit plan for independent members of the Company’s Board of Directors, who
receive a portion of their compensation in the form of deferred share units (“DSUs”). These DSUs are cash settled
awards and are initially recognized in net earnings based on fair value at the grant date. The DSU obligation is
included in accounts payable and accrued liabilities and is remeasured at fair value, based on the market price of the
Company’s common shares, at each reporting date.
Employee share purchase plans
For employee share purchase plans, the Company's contribution, on the employee's behalf, is recognized as
compensation expense with an offset to share capital, and consideration paid by employees on purchase of common
shares is also recorded as an increase to share capital.
(x)
Leases:
At inception of a contract, the Company assesses whether a contract is, or contains, a lease based on whether the
contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The Company recognizes a right-of-use ("ROU") asset and a lease liability at the lease commencement date. The
ROU asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs
to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less
any lease incentives received. The ROU asset is subsequently depreciated using the straight-line method from the
commencement date to the earlier of the end of the useful life of the ROU asset or the lease term. The lease term
includes consideration of an option to renew or to terminate if the Company is reasonably certain to exercise that
option. Lease terms range from 1 to 15 years for manufacturing, sales, distribution, and administrative facilities. In
addition, the ROU asset is periodically reduced by impairment losses, if any, and adjusted for certain
remeasurements of the lease liability.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 81
3. MATERIAL ACCOUNTING POLICY INFORMATION (continued):
(x)
Leases (continued):
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate
as the discount rate. Lease payments mainly include fixed, or in substance fixed, payments and variable lease
payments that depend on an index or a rate. Variable lease payments that do not depend on an index or rate are not
included in the measurement of the lease liability. The lease liability is measured at amortized cost using the effective
interest method. It is remeasured when there is a change in future lease payments arising from a change in an index
or rate, or if the Company changes its assessment of whether it will exercise a purchase, extension, or termination
option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount
of the ROU asset, or is recorded in profit or loss if the carrying amount of the ROU asset has been reduced to zero.
The Company has elected to apply the practical expedient not to recognize ROU assets and lease liabilities for short-
term leases that have a lease term of 12 months or less and leases of low-value assets. The lease payments
associated with these leases are recognized as an expense on a straight-line basis over the lease term.
(y)
Use of estimates and judgments:
The preparation of financial statements in conformity with IFRS requires management to make estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income
and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognized in the period in which the estimates are revised and in any future periods affected.
Critical judgments in applying accounting policies:
The following are critical judgments that management has made in the process of applying accounting policies and
that have the most significant effect on the amounts recognized in the consolidated financial statements:
Determination of cash generating units
The identification of CGUs and grouping of assets into the respective CGUs is based on currently available
information about actual utilization experience and expected future business plans. Management has taken into
consideration various factors in identifying its CGUs. The Company has identified its CGUs for purposes of testing the
recoverability and impairment of non-financial assets to be Textile & Sewing and Hosiery as they represent the lowest
level at which the goodwill and indefinite life intangible assets are monitored for internal management purposes.
Income taxes
The Company’s income tax provisions and income tax assets and liabilities are based on interpretations of applicable
tax laws, including income tax treaties between various countries in which the Company operates, as well as
underlying rules and regulations with respect to transfer pricing. These interpretations involve judgments and
estimates and may be challenged through government taxation audits that the Company is regularly subject to. New
information may become available that causes the Company to change its judgment regarding the adequacy of
existing income tax assets and liabilities; such changes will impact net earnings in the period that such a
determination is made.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 82
4. NEW ACCOUNTING STANDARDS AND INTERPRETATIONS NOT YET APPLIED:
IFRS 9 Financial Instruments (“IFRS 9”) and IFRS 7 Financial Instruments: Disclosures (“IFRS 7”)
In May 2024, IASB issued limited amendments to IFRS 9 and IFRS 7. These amendments provide clarity on the timing of
recognition and derecognition of financial assets and liabilities, the assessment of contractual cash flow characteristics,
and the resulting classification and disclosure of financial assets with environmental, social, and governance linked or
other contingent features. Additionally, the amendments clarify that a financial liability is derecognized on the settlement
date, with the accounting policy choice to derecognize a financial liability settled using an electronic payment system
before the settlement date, provided specific conditions are met. Additional disclosures are required for financial
instruments with contingent features and investments in equity instruments designated at fair value through other
comprehensive income with these amendments. These amendments are effective for annual reporting periods beginning
on or after January 1, 2026. Early adoption is permitted, with an option to early adopt only the amendments to the
classification of financial assets. The Company is currently evaluating the potential impact of these amendments on its
consolidated financial statements.
IFRS 18 Presentation and Disclosure in Financial Statements ("IFRS 18")
On April 9, 2024, the IASB issued IFRS 18 to improve reporting of financial performance. IFRS 18 replaces IAS
1 Presentation of Financial Statements. It carries forward many requirements from IAS 1 unchanged. The standard sets
out requirements on presentation and disclosures in financial statements. It introduces a defined structure for the
statement of income composed of required categories and subtotals. The standard also introduces specific disclosure
requirements for management-defined performance measures and a reconciliation between these measures and the most
similar subtotal specified in IFRS, which must be disclosed in a single note. IFRS 18 applies for annual reporting periods
beginning on or after January 1, 2027. Earlier application is permitted. The Company is currently evaluating the impact of
the adoption of IFRS 18 on its consolidated financial statements.
5. CASH AND CASH EQUIVALENTS:
Cash and cash equivalents consisted entirely of bank balances as at December 29, 2024 and December 31, 2023.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 83
6. TRADE ACCOUNTS RECEIVABLE:
December
29, 2024
December
31, 2023
Trade accounts receivable
$
553,420
$
423,663
Allowance for expected credit losses
(11,061)
(11,165)
$
542,359
$
412,498
As at December 29, 2024, trade accounts receivables being serviced under a receivables purchase agreement amounted
to $272.1 million (December 31, 2023 - $270.9 million). The difference between the carrying amount of the receivables
sold under the agreement and the cash received at the time of transfer was $16.4 million for fiscal 2024 (2023 - $17.5
million) and was recorded in bank and other financial charges. Refer to note 25 for additional information related to the
receivables purchase agreement.
The movement in the allowance for expected credit losses in respect of trade receivables was as follows:
2024
2023
Balance, beginning of fiscal year
$
(11,165) $
(15,394)
(Impairment) Reversal of impairment of trade accounts receivable
(380)
3,859
Write-off of trade accounts receivable
484
370
Balance, end of fiscal year
$
(11,061) $
(11,165)
The impairment of trade accounts receivable for fiscal 2024, is mainly related to the impact of increases in overall trade
accounts receivables, partially offset by a decrease in the expected credit loss rates for specific customers. The reversal
of impairment of trade accounts receivable for fiscal 2023 mainly related to a decrease in the expected credit loss rates for
specific customers, partially offset by the impact of increases in overall trade accounts receivables.
7. INVENTORIES:
December
29, 2024
December
31, 2023
Raw materials and spare parts inventories
$
170,321
$
165,527
Work in progress
65,399
57,938
Finished goods
874,842
865,976
$ 1,110,562
$ 1,089,441
The amount of inventories recognized as an expense and included in cost of sales was $2,214.0 million for
fiscal 2024 (2023 - $2,241.2 million). For fiscal 2024, cost of sales included an expense of $8.1 million (2023 - $12.3
million) related the write-down of inventory to net realizable value.
The Company has a multi-year agreement for the purchase of yarn terminating in 2028, with minimum purchase
requirements. As at December 29, 2024, the Company had a commitment of $155.6 million (2023 - $186.5 million) under
this agreement. These commitments are included in our contractual undiscounted cash flows summary. Refer to note 25
Financial risk management of these annual consolidated financial statements for additional information.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 84
8. PROPERTY, PLANT AND EQUIPMENT:
Land
Buildings and
improvements
Manufacturing
equipment
Other
equipment
Assets not
yet utilized in
operations
Total
2024
Cost
Balance, December 31, 2023
$
129,569
$
601,486
$ 1,313,960
$
172,228
$
185,251
$ 2,402,494
Additions
238
24,652
55,770
8,065
53,764
142,489
Transfers
—
73,707
103,684
3,910
(181,301)
—
Disposals(1)
(899)
(49,319)
(35,091)
(9,095)
—
(94,404)
Balance, December 29, 2024
$
128,908
$
650,526
$ 1,438,323
$
175,108
$
57,714
$ 2,450,579
Accumulated depreciation
Balance, December 31, 2023
$
—
$
283,325
$
806,086
$
138,568
$
—
$ 1,227,979
Depreciation (note 20)
—
26,620
72,996
11,516
—
111,132
Disposals(1)
—
(23,785)
(28,897)
(9,090)
—
(61,772)
Balance, December 29, 2024
$
—
$
286,160
$
850,185
$
140,994
$
—
$ 1,277,339
Carrying amount, December 29, 2024
$
128,908
$
364,366
$
588,138
$
34,114
$
57,714
$ 1,173,240
Land
Buildings and
improvements
Manufacturing
equipment
Other
equipment
Assets not
yet utilized in
operations
Total
2023
Cost
Balance, January 1, 2023
$
130,940
$
591,302
$ 1,205,601
$
175,366
$
172,754
$ 2,275,963
Additions
2,910
28,661
31,337
6,659
126,126
195,693
Transfers
—
11,024
97,684
4,921
(113,629)
—
Disposals(1)
(4,281)
(29,501)
(20,662)
(14,718)
—
(69,162)
Balance, December 31, 2023
$
129,569
$
601,486
$ 1,313,960
$
172,228
$
185,251
$ 2,402,494
Accumulated depreciation
Balance, January 1, 2023
$
—
$
263,383
$
756,317
$
141,094
$
—
$ 1,160,794
Depreciation (note 20)
—
23,493
66,694
10,974
—
101,161
Disposals(1)
—
(3,551)
(16,925)
(13,500)
—
(33,976)
Balance, December 31, 2023
$
—
$
283,325
$
806,086
$
138,568
$
—
$ 1,227,979
Carrying amount, December 31, 2023
$
129,569
$
318,161
$
507,874
$
33,660
$
185,251
$ 1,174,515
(1) Disposals include the write-off of certain equipment relating to facility closures. See note 17 "Restructuring and acquisition-related
costs" for additional information.
Assets not yet utilized in operations include expenditures incurred to date for plant expansions which are still in process
and equipment not yet placed into service as at the end of the reporting period.
As at December 29, 2024, there were contractual purchase obligations outstanding of approximately $50.7 million
(December 31, 2023 - $104.7 million) for the purchase of property, plant and equipment. These contractual purchase
obligations are included in our contractual undiscounted cash flows summary. Refer to note 25 Financial risk management
of these annual consolidated financial statements for additional information.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 85
9. RIGHT-OF-USE ASSETS AND LEASE OBLIGATIONS:
(a) Right-of-use assets:
The following table presents the right-of-use assets for the Company:
2024
2023
Balance, beginning of fiscal year
$
81,447 $
77,958
Additions
34,863
18,502
Write-downs, impairments, and accelerated depreciation
(6,614)
(1,657)
Depreciation (note 20)
(14,128)
(13,356)
Balance, end of fiscal year
$
95,568 $
81,447
(b) Lease obligations:
The Company’s leases are primarily for manufacturing, sales, distribution, and administrative facilities.
The following table presents lease obligations recorded in the statement of financial position:
December
29, 2024
December 31,
2023
Current
$
17,749 $
14,161
Non-current
99,671
83,900
$
117,420 $
98,061
Leases of certain facilities contain extension or termination options exercisable by the Company before the end of the
non-cancellable contract period. The Company has applied judgment to determine the lease term for the contracts
with renewal and termination options and has included renewal and termination options in the measurement of lease
obligations when it is reasonably certain to exercise the options. The Company reassesses whether it is reasonably
certain to exercise the options if there is a significant event or a significant change in circumstances within its control
which impacts the original assessments made. As at December 29, 2024, potential undiscounted future lease
payments related to renewal options not included in the measurement of lease obligations were $116.8 million
(December 31, 2023 - $80.2 million).
The following table presents the undiscounted future minimum lease payments under non-cancellable leases
(including short term leases) as at December 29, 2024:
December 29,
2024
Less than one year
$
25,549
One to five years
70,513
More than five years
41,319
$
137,381
For the year ended December 29, 2024, expenses relating to short-term leases and leases of low-value assets were
$3.4 million (2023 - $3.2 million).
For the year ended December 29, 2024, the total cash outflow for recognized lease obligations (including interest)
was $20.0 million (2023 - $28.3 million), of which $15.2 million (2023 - $24.9 million) was included as part of cash
outflows from financing activities.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 86
10. INTANGIBLE ASSETS AND GOODWILL:
Intangible assets:
2024
Customer
contracts and
customer
relationships
Trademarks
License
agreements
Computer
software
Non-compete
agreements
Total
Cost
Balance, December 31, 2023
$
224,489
$
226,172
$
70,450
$
73,900
$
—
$
595,011
Additions
—
—
—
5,153
—
5,153
Disposals
—
—
—
(2,740)
—
(2,740)
Balance, December 29, 2024
$
224,489
$
226,172
$
70,450
$
76,313
$
—
$
597,424
Accumulated amortization
Balance, December 31, 2023
$
183,251
$
22,480
$
70,040
$
57,821
$
—
$
333,592
Amortization (note 20)
7,694
—
410
5,136
—
13,240
Disposals
—
—
—
(2,727)
—
(2,727)
Balance, December 29, 2024
$
190,945
$
22,480
$
70,450
$
60,230
$
—
$
344,105
Carrying amount, December 29, 2024
$
33,544
$
203,692
$
—
$
16,083
$
—
$
253,319
2023
Customer
contracts and
customer
relationships
Trademarks
License
agreements
Computer
software
Non-compete
agreements
Total
Cost
Balance, January 1, 2023
$
224,489
$
226,172
$
70,450
$
70,574
$
1,790
$
593,475
Additions
—
—
—
4,592
—
4,592
Disposals
—
—
—
(1,266)
(1,790)
(3,056)
Balance, December 31, 2023
$
224,489
$
226,172
$
70,450
$
73,900
$
—
$
595,011
Accumulated amortization
Balance, January 1, 2023
$
184,421
$
55,447
$
68,398
$
53,468
$
1,790
$
363,524
Amortization (note 20)
6,633
—
1,642
5,568
—
13,843
Disposals
—
—
—
(1,215)
(1,790)
(3,005)
Impairment reversal
(7,803)
(32,967)
—
—
—
(40,770)
Balance, December 31, 2023
$
183,251
$
22,480
$
70,040
$
57,821
$
—
$
333,592
Carrying amount, December 31, 2023
$
41,238
$
203,692
$
410
$
16,079
$
—
$
261,419
During fiscal 2024, no impairment charges were recorded related to intangible assets (both definite and indefinite life)
acquired in previous business acquisitions.
During fiscal 2023, the Company recorded an impairment reversal of $40.8 million relating to intangible assets (both
definite and indefinite life) acquired in previous business acquisitions.
The carrying amount of internally-generated assets within computer software was $10.6 million as at December 29, 2024
(December 31, 2023 - $11.7 million). Included in computer software as at December 29, 2024 was $3.9 million
(December 31, 2023 - $1.2 million) of assets not yet utilized in operations.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 87
10. INTANGIBLE ASSETS AND GOODWILL (continued):
Goodwill:
2024
2023
Balance, beginning of fiscal year
$
271,677
$
271,677
Goodwill acquired (disposed)
—
—
Balance, end of fiscal year
$
271,677
$
271,677
Recoverability of cash-generating units:
Goodwill acquired through business acquisitions and intangibles have been allocated to the Company's CGUs as follows:
December
29, 2024
December
31, 2023
Textile & Sewing:
Goodwill
$
271,677
$
271,677
Definite life intangible assets (excluding computer software)
10,987
15,134
Indefinite life intangible assets
93,400
93,400
$
376,064
$
380,211
Hosiery:
Definite life intangible assets (excluding computer software)
$
22,557
$
26,514
Indefinite life intangible assets
110,292
110,292
$
132,849
$
136,806
In assessing whether goodwill and indefinite life intangible assets are impaired, the carrying amounts of the CGUs
(including goodwill and indefinite life intangible assets) are compared to their recoverable amounts. The key assumptions
for the fair value less costs of disposal method include estimated sales volumes, selling prices, input costs, and SG&A
expenses in determining forecasted adjusted EBITDA, as well as the multiple applied to forecasted adjusted EBITDA. The
adjusted EBITDA multiple was obtained by using market comparables as a reference.
The Company performed its annual impairment review for goodwill and indefinite life intangible assets as at December 29,
2024 and December 31, 2023. The estimated recoverable amount for the Textile & Sewing CGU exceeded its carrying
value and as a result, there was no impairment identified. The estimated recoverable amount for the Hosiery CGU
exceeded its carrying value and as a result, there was no impairment identified for the year ended December 29, 2024.
For the year ended December 31, 2023, the carrying value for the Hosiery CGU was in excess of its carrying value and as
a result the Company recorded an impairment reversal of $40.8 million, relating to intangible assets (both definite and
indefinite life) acquired in previous business acquisitions. Following this impairment reversal, no additional amount can be
reversed.
Recoverable amount for Textile & Sewing and Hosiery CGUs
The Company determined the recoverable amounts of the Textile & Sewing and Hosiery CGUs based on the fair value
less costs of disposal method. The fair value measurement was categorized as a level 3 fair value. The fair values of the
Textile & Sewing and Hosiery CGUs were based on a multiple of 8.5 (2023 - 7.5), applied to risk adjusted EBITDA
(adjusted EBITDA as defined in note 24) for the next year, which takes into account financial forecasts approved by senior
management. The values assigned to the key assumptions represent management’s assessment of future trends and
have been based on historical data from external and internal sources.
Textile & Sewing CGU
For the Textile & Sewing CGU, no reasonably possible change in the key assumptions used in determining the
recoverable amount would result in any impairment of goodwill or indefinite life intangible assets.
Hosiery CGU
For the Hosiery CGU, no reasonably possible change in the key assumptions used in determining the recoverable amount
would result in any impairment of indefinite life intangible assets.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 88
11. LONG-TERM DEBT:
Effective
interest
rate (1)
Principal amount
Maturity date
December 29,
2024
December 31,
2023
Non-current portion of long-term debt
Revolving long-term bank credit facility, interest at variable U.S.
interest rate(2)(3)
6.6%
$
— $
235,000
March 2027
Senior unsecured Canadian notes, Series 1, interest at fixed rate
of 4.36%, payable semi-annually
5.5%
347,050
—
November
2029
Senior unsecured Canadian notes, Series 2, interest at fixed rate
of 4.71%, payable semi-annually
5.8%
138,820
—
November
2031
Term loan, interest at variable U.S. interest rate, payable
monthly(2)(4)
4.7%
300,000
300,000
June 2026
Term loan facility, interest at variable U.S. interest rate, payable
monthly(5)
6.4%
300,000
—
August 2029
Notes payable, interest at fixed rate of 2.91%, payable semi-
annually(6)
2.9%
100,000
100,000
August 2026
Notes payable, interest at Adjusted SOFR plus a spread of
1.57%, payable quarterly(6)(7)
2.9%
50,000
50,000
August 2026
$
1,235,870 $
685,000
Current portion of long-term debt
Delayed draw term loan (DDTL), interest at variable U.S. interest
rate, payable monthly(2)(4)(8)
6.9%
300,000
300,000
May 2025
$
300,000 $
300,000
Long-term debt
$
1,535,870 $
985,000
(1) Represents the annualized effective interest rate for the year ended December 29, 2024, including the cash impact of interest rate
swaps, where applicable.
(2) Secured Overnight Financing Rate (SOFR) advances at adjusted Term SOFR (includes a 0% to 0.25% reference rate adjustment)
plus a spread ranging from 1% to 3%.
(3) The Company’s committed unsecured revolving long-term bank credit facility of $1 billion provides for an annual extension which is
subject to the approval of the lenders. The spread added to the adjusted Term SOFR is a function of the total net debt to EBITDA ratio (as
defined in the credit facility agreement and its amendments). In addition, an amount of $10.8 million (December 31, 2023 - $36.0 million)
has been committed against this facility to cover various letters of credit.
(4) The unsecured term loan is non-revolving and can be prepaid in whole or in part at any time with no penalties. The spread added to
the adjusted Term SOFR is a function of the total net debt to EBITDA ratio (as defined in the term loan agreements and its amendments).
(5) The term loan facility can be prepaid in whole or in part at any time with no penalties. U.S. Base Rate Advances at U.S. Base rates or
SOFR advances at adjusted Term SOFR (includes a 0.10% reference rate adjustment) plus a spread ranging from 1% to 2% based on
the Company's total net debt to EBITDA ratio (as defined in the term loan agreement).
(6) The unsecured notes issued to accredited investors in the U.S. private placement market can be prepaid in whole or in part at any
time, subject to the payment of a prepayment penalty as provided for in the Note Purchase Agreement.
(7) Adjusted SOFR rate is determined on the basis of floating rate notes that bear interest at a floating rate plus a spread of 1.57%.
(8) On May 26, 2023, the Company amended its $300 million term loan to include an additional $300 million delayed draw term loan
("DDTL") with a one year maturity from the effective date. All other terms of the agreement remained unchanged.
On August 30, 2024, the Company entered into an unsecured committed five-year term loan agreement for a total
principal amount of $300 million. The term loan is non-revolving and provides for a spread added to the adjusted Term
SOFR based on the total net debt to EBITDA ratio (as defined in the term loan agreement).
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 89
11. LONG-TERM DEBT (continued):
On November 22, 2024, the Company issued 4.362% Series 1 senior unsecured notes ("Series 1 notes") with a principal
amount of $500 million in Canadian dollars ($357.1 million in U.S. dollars), which mature on November 22, 2029.
Additionally, on the same date, the Company issued 4.711% Series 2 senior unsecured notes ("Series 2 notes") with a
principal amount of $200 million in Canadian dollars ($142.9 million in U.S. dollars), which mature on November 22, 2031.
The notes were offered in Canada on a private placement basis.
The Series 1 notes and Series 2 notes have been hedged for foreign currency fluctuations through cross currency
principal and interest rate swaps, which serves to lock in the combined principal at US$500 million. Interest on these
senior unsecured Canadian notes is payable semi-annually. See Note 14, Financial instruments, for additional details.
Under the terms of the revolving facility, term loan facilities and U.S private notes. the Company is required to comply with
certain covenants, including maintenance of financial ratios. The Company was in compliance with all financial covenants
at December 29, 2024.
12. OTHER NON-CURRENT LIABILITIES:
December
29, 2024
December
31, 2023
Employee benefit obligation - Statutory severance and pre-notice (a)
$
32,400
$
31,003
Employee benefit obligation - Defined contribution plan (b)
5,267
4,225
Provisions (c)
10,541
11,080
Derivative liability (note 14(a))
8,602
—
$
56,810
$
46,308
(a) Statutory severance and pre-notice obligations:
2024
2023
Obligation, beginning of fiscal year
$
31,003
$
42,127
Service cost
14,972
16,700
Interest cost
7,823
8,767
Actuarial loss (gain)(1)
817
(1,717)
Foreign exchange gain
(2,597)
(501)
Benefits paid
(19,618)
(34,373)
Obligation, end of fiscal year
$
32,400
$
31,003
(1) The actuarial loss (gain) in fiscal 2024 and 2023 respectively, is mainly due to changes in the actuarial assumptions used to
determine the statutory severance obligations.
Significant assumptions for the calculation of the statutory severance obligations included the use of a discount rate
ranging between 9.3% and 11.7% (2023 - between 10.0% and 11.4%) and rates of compensation increases between
7.5% and 9.5% (2023 - 8.0% and 9.5%). A 1% increase in the discount rates would result in a corresponding
decrease in the statutory severance obligations of $4.5 million, and a 1% decrease in the discount rates would result
in a corresponding increase in the statutory severance obligations of $5.2 million. A 1% increase in the rates of
compensation increases used would result in a corresponding increase in the statutory severance obligations of
$5.6 million, and a 1% decrease in the rates of compensation increases used would result in a corresponding
decrease in the statutory severance obligations of $4.9 million.
The cumulative amount of actuarial losses recognized in other comprehensive income as at December 29, 2024 was
$25.6 million (December 31, 2023 - $24.8 million) which have been reclassified to retained earnings in the period in
which they were recognized.
(b) Defined contribution plan:
During fiscal 2024, defined contribution expenses were $6.7 million (2023 - $5.4 million).
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 90
12. OTHER NON-CURRENT LIABILITIES (continued):
(c)
Provisions:
The following table presents the provisions for decommissioning and site restoration costs of the Company:
2024
2023
Balance, beginning of fiscal year
$
11,080
$
10,707
Changes in estimates made during the fiscal year
(970)
(41)
Accretion of interest
431
414
Balance, end of fiscal year
$
10,541
$
11,080
Provisions as at December 29, 2024 include estimated future costs of decommissioning and site restoration for
certain assets located at the Company’s textile and sock facilities for which the timing of settlement is uncertain, but
has been estimated to be in excess of nine years.
13. EQUITY:
(a) Shareholder rights plan:
The Company has a shareholder rights plan which provides the Board of Directors and the shareholders with
additional time to assess any unsolicited take-over bid for the Company and, where appropriate, pursue other
alternatives for maximizing shareholder value.
(b) Accumulated other comprehensive income ("AOCI"):
Accumulated other comprehensive income includes the changes in the fair value of the effective portion of qualifying
cash flow hedging instruments, for which the hedged transaction has not yet occurred at the end of the fiscal year.
(c)
Share capital:
Authorized:
Common shares, authorized without limit as to number and without par value. First preferred shares, without limit as
to number and without par value, issuable in series and non-voting. Second preferred shares, without limit as to
number and without par value, issuable in series and non-voting. As at December 29, 2024 and December 31, 2023,
none of the first and second preferred shares were issued.
Issued:
As at December 29, 2024, there were 152,410,994 common shares (December 31, 2023 - 169,986,477) issued and
outstanding, which are net of 94,535 common shares (December 31, 2023 - 8,245) that have been purchased and
are held in trust as described in note 13(e).
(d) Normal course issuer bid ("NCIB"):
In August 2022, the Company received approval from the TSX to renew its normal course issuer bid ("NCIB")
program commencing on August 9, 2022, to purchase for cancellation a maximum of 9,132,337 common shares,
representing 5% of the Company's issued and outstanding common shares, as at July 31, 2022 (the reference date
for the NCIB). Under the NCIB, the Company was authorized to make purchases under the normal course issuer bid
during the period from August 9, 2022 to August 8, 2023 in accordance with the requirements of the TSX.
In August 2023, the Company received approval from the TSX to renew its NCIB program commencing on
August 9, 2023, to purchase for cancellation a maximum of 8,778,638 common shares, representing approximately
5% of the Company's issued and outstanding common shares, as at July 31, 2023 (the reference date for the
renewed NCIB). The Company is authorized to make purchases under the renewed NCIB until August 8, 2024 in
accordance with the requirements of the TSX.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 91
13. EQUITY (continued):
(d) Normal course issuer bid ("NCIB") (continued):
On July 31, 2024, the Company received approval from the TSX to renew its NCIB program commencing on
August 9, 2024, to purchase for cancellation a maximum of 16,106,155 common shares, representing approximately
10% of the Company's public float, as at July 26, 2024 (the reference date for the renewed NCIB). The Company is
authorized to make purchases under the renewed NCIB until August 8, 2025, in accordance with the requirements of
the TSX. Purchases are made by means of open market transactions on both the TSX and the New York Stock
Exchange ("NYSE"), or alternative U.S. or Canadian trading systems if eligible, or by such other means as may be
permitted by securities regulatory authorities, including pre-arranged crosses, exempt offers, private agreements
under an issuer bid exemption order issued by securities regulatory authorities and block purchases of common
shares. In accordance with the requirements of the TSX, the Company may purchase, in addition to purchases made
on other exchanges including the NYSE, up to a maximum of 80,209 common shares daily through the facilities of the
TSX, which represents 25% of the ADTV for the most recently completed six-month period noted above.
In connection with each of its 2023-2024 and 2024-2025 NCIB programs, the Company entered into an automatic
share purchase plan ("ASPP") with a designated broker which allows for the purchase of common shares under the
NCIB at times when the Company would ordinarily not be permitted to purchase its common shares due to regulatory
restrictions or self-imposed trading blackout periods.
On June 20, 2024, Canada’s Bill C-59 was enacted into law, which, among other things, introduced a 2% tax on the
annual net value of share repurchases by public corporations in Canada occurring on or after January 1, 2024. The
Company is subject to this tax which is based on the shares repurchased for cancellation under the Company’s
normal course issuer bid (NCIB) program during the year ended December 29, 2024. The tax cost of $14.9 million
has been recorded as a charge to retained earnings and is included in accounts payable and accrued liabilities in the
consolidated statements of financial position as at December 29, 2024, as the amount is only payable in 2025.
During the year ended December 29, 2024, the Company repurchased for cancellation a total of 17,735,095 common
shares, for a total cost of $761.5 million (including $14.9 million of taxes on share repurchases) of which $29.7 million
was charged to share capital and $731.8 million was charged to retained earnings.
(e) Common shares purchased as settlement for non-Treasury RSUs:
The Company has established a trust for the purpose of settling the vesting of non-Treasury RSUs. For non-Treasury
RSUs that are to be settled in common shares in lieu of cash, the Company directs the trustee to purchase common
shares of the Company on the open market to be held in trust for and on behalf of the holders of non-Treasury RSUs
until they are delivered for settlement, when the non-Treasury RSUs vest. For accounting purposes, the common
shares are considered as held in treasury, and recorded as a temporary reduction of outstanding common shares and
share capital. Upon delivery of the common shares for settlement of the non-Treasury RSUs, the number of common
shares outstanding is increased, and the amount in contributed surplus is transferred to share capital. As at
December 29, 2024, a total of 94,535 common shares purchased as settlement for non-Treasury RSUs were
considered as held in treasury and recorded as a temporary reduction of outstanding common shares and share
capital (December 31, 2023 - 8,245 common shares).
(f)
Contributed surplus:
The contributed surplus account is used to record the accumulated compensation expense related to equity-settled
share-based compensation transactions. Upon the exercise of stock options, the vesting of Treasury RSUs, and the
delivery of common shares for settlement of vesting non-Treasury RSUs or SARs, the corresponding amounts
previously credited to contributed surplus are transferred to share capital, except for the portion of the share-based
payment that the Company settles on a net basis when the Company has an obligation under tax laws to withhold an
amount for an employee’s tax obligation, in which case the corresponding amounts previously credited to contributed
surplus are transferred to accounts payable and accrued liabilities.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 92
14. FINANCIAL INSTRUMENTS:
(a) Financial instruments - carrying amounts and fair values:
The carrying amounts and fair values of financial assets and liabilities included in the consolidated statements of
financial position are as follows:
December
29, 2024
December
31, 2023
Financial assets
Amortized cost:
Cash and cash equivalents
$
98,799
$
89,642
Trade accounts receivable
542,359
412,498
Financial assets included in prepaid expenses, deposits and other current assets
56,785
45,136
Long-term non-trade receivables included in other non-current assets
22,321
12,863
Fair value through other comprehensive income:
Derivative financial assets included in prepaid expenses, deposits and other current
assets
12,108
15,797
Financial liabilities
Amortized cost:
Accounts payable and accrued liabilities(1)
$
478,317
$
403,534
Long-term debt - bearing interest at variable rates
950,000
885,000
Long-term debt - bearing interest at fixed rates(2)
585,870
100,000
Fair value through other comprehensive income:
Derivative financial liabilities included in accounts payable and accrued liabilities
11,756
4,760
Derivative financial liabilities included in other non-current liabilities
8,602
—
1) Accounts payable and accrued liabilities include $11.6 million (December 31, 2023 - $12.5 million) under supply-chain financing
arrangements (reverse factoring) with a financial institution, whereby receivables due from the Company to certain suppliers can be
collected by the suppliers from a financial institution before their original due date. These balances are classified as accounts
payable and accrued liabilities and the related payments as cash flows from operating activities, given the principal business
purpose of the arrangement is to provide funding to the supplier and not the Company, the arrangement does not significantly
extend the payment terms beyond the normal terms agreed with other suppliers, and no additional deferral or special guarantees to
secure the payments are included in the arrangement. Accounts payable and accrued liabilities also include balances payable of
$37.8 million (December 31, 2023 - $49.0 million) resulting mainly from a one-week timing difference between the collection of sold
receivables and the weekly remittance to our bank counterparty under our receivables purchase agreement that is disclosed in note
6 to these consolidated financial statements.
2) The fair value of the long-term debt bearing interest at fixed rates was $627.3 million as at December 29, 2024 (December 31,
2023 - $98.6 million).
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 93
14. FINANCIAL INSTRUMENTS (continued):
(a) Financial instruments - carrying amounts and fair values (continued):
Short-term financial assets and liabilities
The Company has determined that the fair value of its short-term financial assets and liabilities approximates their
respective carrying amounts as at the reporting dates due to the short-term maturities of these instruments, as they
bear variable interest-rates or because the terms and conditions are comparable to current market terms and
conditions for similar items.
Non-current assets and long-term debt bearing interest at variable rates
The fair values of the long-term non-trade receivables included in other non-current assets and the Company’s long-
term debt bearing interest at variable rates also approximate their respective carrying amounts because the interest
rates applied to measure their carrying amounts approximate current market interest rates.
Long-term debt bearing interest at fixed rates
The fair value of the long-term debt bearing interest at fixed rates is determined using the discounted future cash
flows method and at discount rates based on yield to maturities for similar issuances. The fair value of the long-term
debt bearing interest at fixed rates was measured using Level 2 inputs in the fair value hierarchy. In determining the
fair value of the long-term debt bearing interest at fixed rates, the Company takes into account its own credit risk and
the credit risk of the counterparties.
Derivatives
Derivative financial instruments are designated as effective hedging instruments and consist of foreign exchange and
commodity forward, option, and swap contracts, as well as floating-to-fixed interest rate swaps to fix the variable
interest rates on a designated portion of borrowings under the term loan and unsecured notes. The fair value of the
forward contracts is measured using a generally accepted valuation technique which is the discounted value of the
difference between the contract’s value at maturity based on the rate set out in the contract and the contract’s value
at maturity based on the rate that the counterparty would use if it were to renegotiate the same contract terms at the
measurement date under current conditions. The fair value of the option contracts is measured using option pricing
models that utilize a variety of inputs that are a combination of quoted prices and market-corroborated inputs,
including volatility estimates and option adjusted credit spreads. The fair value of the interest rate swaps is
determined based on market data, by measuring the difference between the fixed contracted rate and the forward
curve for the applicable floating interest rates.
On November 22, 2024, the Company entered into derivative transactions to hedge its exposure to foreign currency
exchange risk related to its senior notes liability and interest expense denominated in Canadian dollars. This cross-
currency swap has been designated at inception and is accounted for as a cash flow hedge, and to the extent that the
hedge is effective, unrealized gains and losses are included in other comprehensive income until reclassified to the
statement of income as the hedged interest payments and principal repayments impact net income.
Derivative financial instruments were measured using Level 2 inputs in the fair value hierarchy. In determining the fair
value of derivative financial instruments the Company takes into account its own credit risk and the credit risk of the
counterparties.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 94
14. FINANCIAL INSTRUMENTS (continued):
(b) Derivative financial instruments - hedge accounting:
During fiscal 2024 and 2023, the Company entered into foreign exchange and commodity forward, option, and swap
contracts in order to minimize the exposure of forecasted cash inflows and outflows in currencies other than the U.S.
dollar, as well contractual future principal and interest payments on fixed rate foreign currency debt, and to manage
its exposure to movements in commodity prices, as well as floating-to-fixed interest rate swaps to fix the variable
interest rates on a designated portion of borrowings under the term loan and unsecured notes.
The forward foreign exchange contracts were designated as cash flow hedges and qualified for hedge accounting.
The forward foreign exchange contracts outstanding as at December 29, 2024 and December 31, 2023 consisted
primarily of contracts to reduce the exposure to fluctuations in Canadian dollars, Euros, Australian dollars, Pounds
sterling, and Mexican pesos against the U.S. dollar, as well as cross-currency debt and interest rate swap contracts to
reduce the exposure to fluctuations in Canadian dollars against the U.S dollar.
The commodity forward, option, and swap contracts were designated as cash flow hedges and qualified for hedge
accounting. The commodity contracts outstanding as at December 29, 2024 and December 31, 2023 consisted
primarily of forward, collar, and swap contracts to reduce the exposure to movements in commodity prices.
The floating-to-fixed interest rate swaps were designated as cash flow hedges and qualified for hedge accounting.
The floating-to-fixed interest rate swaps contracts outstanding as at December 29, 2024 and December 31, 2023
served to fix the variable interest rates on the designated interest payments of a portion of the Company's long-term
debt.
The fair value of interest rate swaps and cross-currency swaps is calculated as the present value of estimated future
cash flows over the remaining term of the contracts and based on market data (primarily yield curves, interest rates,
and exchange rates for cross-currency swaps).
The following table summarizes the Company’s commitments to buy and sell foreign currencies (cash flow hedges)
as at December 29, 2024:
Carrying and fair value
Maturity
Notional
foreign currency
Average
Notional
Prepaid expenses,
Accounts
amount
exchange
U.S. $
deposits and other
payable and
0 to 12
equivalent
rate
equivalent
current assets
accrued liabilities
months
Forward foreign exchange contracts:
Sell GBP/Buy USD
23,665
1.2827
$
30,355
$
705
$
—
$
705
Sell EUR/Buy USD
38,477
1.0914
41,995
1,532
—
1,532
Sell CAD/Buy USD
34,139
0.7401
25,266
1,403
—
1,403
Buy CAD/Sell USD
77,510
0.7252
56,214
—
(1,781)
(1,781)
Sell AUD/Buy USD
7,586
0.6620
5,022
292
—
292
Sell MXN/Buy USD
172,198
0.0511
8,793
451
(3)
448
$ 167,645
$
4,383
$
(1,784) $
2,599
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 95
14. FINANCIAL INSTRUMENTS (continued):
(b) Derivative financial instruments - hedge accounting (continued):
The following table summarizes the Company’s commitments to buy and sell foreign currencies (cash flow hedges)
as at December 31, 2023:
Carrying and fair value
Maturity
Notional foreign
Average
Notional
Prepaid expenses,
Accounts
currency amount
exchange
U.S. $
deposits and other
payable and
0 to 12
equivalent
rate
equivalent
current assets
accrued liabilities
months
Forward foreign exchange contracts:
Sell GBP/Buy USD
25,399
1.2506
$
31,765
$
25
$
(585)
$
(560)
Sell EUR/Buy USD
40,866
1.0987
44,901
63
(640)
(577)
Sell CAD/Buy USD
52,285
0.7506
39,243
33
(362)
(329)
Buy CAD/Sell USD
41,199
0.7384
30,422
735
—
735
Sell AUD/Buy USD
15,011
0.6681
10,029
21
(261)
(240)
Sell MXN/Buy USD
325,633
0.0543
17,687
—
(980)
(980)
$ 174,047
$
877
$
(2,828)
$
(1,951)
The following table summarizes the Company’s cross-currency fixed rate debt swap commitments to sell foreign
currencies (cash flow hedges) as at December 29, 2024:
Carrying and fair value
Maturity
Notional foreign
Fixed
Notional
Other non-
Other non-
currency amount
exchange
U.S. $
Pay
Receive
current
current
Over 12
equivalent
rate
equivalent
rate
Rate
assets
liabilities
months
Forward foreign exchange contracts:
Sell CAD/Buy USD
500,000
1.4000
357,143
5.49 %
4.36 %
—
(6,442)
November 2029
Sell CAD/Buy USD
200,000
1.4000
142,857
5.77 %
4.71 %
—
(2,160)
November 2031
$ 500,000
$
(8,602)
The following table summarizes the Company's commodity contracts outstanding (cash flow hedges) as at
December 29, 2024:
Carrying and fair value
Maturity
Prepaid expenses,
Accounts
Type of
deposits and other
payable and
0 to 12
commodity
Notional amount(1)
current assets
accrued liabilities
months
Forward contracts
Cotton
382.2 million pounds
$
1,584
$
(9,519)
$
(7,935)
Swap & option contracts
Energy
3.4 million gallons
25
(453)
(428)
$
1,609
$
(9,972)
$
(8,363)
(1) Notional amounts are not in thousands.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 96
14. FINANCIAL INSTRUMENTS (continued):
(b) Derivative financial instruments - hedge accounting (continued):
The following table summarizes the Company's commodity contracts outstanding (cash flow hedges) as at
December 31, 2023:
Carrying and fair value
Maturity
Prepaid expenses,
Accounts
Type of
deposits and other
payable and
0 to 12
commodity
Notional amount(1)
current assets
accrued liabilities
months
Forward contracts
Cotton
144.6 million pounds
$
4,583
$
(1,745)
$
2,838
Swap & option contracts
Energy
2.9 million gallons
153
(187)
(34)
$
4,736
$
(1,932)
$
2,804
(1) Notional amounts are not in thousands.
The following table summarizes the Company’s floating-to-fixed interest rate swap contracts outstanding (cash flow
hedges) as at December 29, 2024:
Carrying and fair value
Notional
Prepaid expenses,
Accounts
amount of
Maturity
Fixed
Floating
deposits and other
payable and
borrowings
date
Pay / Receive
rate
rate
current assets
accrued liabilities
Term Loan(1)
$
25,000
April 30,
2025
Pay fixed rate /
receive floating rate
1.06 %
SOFR
$
355
$
—
50,000
April 30,
2025
Pay fixed rate /
receive floating rate
0.70 %
SOFR
771
—
25,000
June 30,
2026
Pay fixed rate /
receive floating rate
1.52 %
SOFR
714
25,000
June 30,
2026
Pay fixed rate /
receive floating rate
1.17 %
SOFR
1,153
—
25,000
June 30,
2026
Pay fixed rate /
receive floating rate
3.20 %
SOFR
364
—
25,000
June 30,
2026
Pay fixed rate /
receive floating rate
3.69 %
SOFR
172
—
Unsecured Notes
50,000
August 25,
2026
Pay fixed rate /
receive floating rate
1.12 %
SOFR
2,587
—
$
6,116
$
—
(1) The notional amounts for the interest rate swap contracts maturing in 2026 are extensions to the $100 million interest rate swap
contracts originally entered into for the $300 million term loan.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 97
14. FINANCIAL INSTRUMENTS (continued):
(b) Derivative financial instruments - hedge accounting (continued):
The following table summarizes the Company’s floating-to-fixed interest rate swap contracts outstanding (cash flow
hedges) as at December 31, 2023:
Carrying and fair value
Notional
Prepaid expenses,
Accounts
amount of
Maturity
Fixed
Floating
deposits and other
payable and
borrowings
date
Pay / Receive
rate
rate
current assets
accrued liabilities
Term Loan(1)
50,000
April 30,
2024
Pay fixed rate /
receive floating rate
1.44 %
SOFR
$
646
$
—
25,000
April 30,
2025
Pay fixed rate /
receive floating rate
1.06 %
SOFR
1,130
—
50,000
April 30,
2025
Pay fixed rate /
receive floating rate
0.70 %
SOFR
2,414
—
25,000
June 30,
2026
Pay fixed rate /
receive floating rate
1.52 %
SOFR
439
25,000
June 30,
2026
Pay fixed rate /
receive floating rate
1.17 %
SOFR
1,593
—
25,000
June 30,
2026
Pay fixed rate /
receive floating rate
3.20 %
SOFR
373
—
Unsecured Notes
50,000
August 25,
2026
Pay fixed rate /
receive floating rate
1.12 %
SOFR
3,589
—
$
10,184
$
—
(1) The notional amounts for the interest rate swap contracts maturing in 2025 and 2026 were extensions to the $125 million interest
rate swap contracts originally entered into for the $300 million term loan.
The following table summarizes the Company’s hedged items as at December 29, 2024:
Change in
Carrying amount of
value used for
Cash flow
the hedged item
calculating hedge
hedge reserve
Assets
Liabilities
ineffectiveness
(AOCI)
Cash flow hedges:
Foreign currency risk:
Forecast sales
$
—
$
—
$
3,048
$
(3,048)
Forecast expenses
—
—
(1,781)
1,781
Debt & interest payments
—
487,677
6,041
(6,041)
Commodity risk:
Forecast purchases
—
—
(12,592)
12,592
Interest rate risk:
Forecast interest payments
—
—
5,257
(5,257)
$
—
$ 487,677
$
(27)
$
27
No ineffectiveness was recognized in net earnings as the change in value of the hedging instrument used for
calculating ineffectiveness was the same or smaller as the change in value of the hedged items used for calculating
the ineffectiveness.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 98
14. FINANCIAL INSTRUMENTS (continued):
(b) Derivative financial instruments - hedge accounting (continued):
The following table summarizes the Company’s hedged items as at December 31, 2023:
Change in
Carrying amount of
value used for
Cash flow
the hedged item
calculating hedge
hedge reserve
Assets
Liabilities
ineffectiveness
(AOCI)
Cash flow hedges:
Foreign currency risk:
Forecast sales
$
—
$
—
$
(1,945)
$
1,945
Forecast expenses
—
—
736
(736)
Commodity risk:
Forecast purchases
—
—
4,733
(4,733)
Interest rate risk:
Forecast interest payments
—
—
10,126
(10,126)
$
—
$
—
$
13,650
$
(13,650)
No ineffectiveness was recognized in net earnings as the change in value of the hedging instrument used for
calculating ineffectiveness was the same or smaller as the change in value of the hedged items used for calculating
the ineffectiveness.
(c)
Financial expenses, net:
2024
2023
Interest expense on financial liabilities recorded at amortized cost (1)
$
80,256
$
53,360
Bank and other financial charges
22,212
22,314
Interest accretion on discounted lease obligations
4,764
3,429
Interest accretion on discounted provisions
431
414
Foreign exchange (gain) loss
(3,509)
153
$
104,154
$
79,670
(1) Net of capitalized borrowing costs of nil (2023 - $6.8 million) using an average capitalization rate of nil (2023 - 5.39%).
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 99
14. FINANCIAL INSTRUMENTS (continued):
(d) Hedging components of other comprehensive (loss) income (“OCI”):
2024
2023
Net gain (loss) on derivatives designated as cash flow hedges:
Foreign currency risk
$
(4,806) $
(3,334)
Commodity price risk
(14,525)
15,758
Interest rate risk
3,246
2,682
Income taxes
(38)
33
Amounts reclassified from OCI to inventory, related to commodity
price risk
(2,800)
(6,913)
Amounts reclassified from OCI to net earnings, related to foreign currency risk,
commodity risk, and interest rate risk, and included in:
Net sales
(809)
1,802
Cost of sales
—
58
Selling, general and administrative expenses
211
1,198
Financial expenses, net
5,899
(7,437)
Income taxes
(55)
(42)
Other comprehensive (loss) income
$
(13,677) $
3,805
The change in the time value element of option and swap contracts designated as cash flow hedges to reduce the
exposure in movements of commodity prices was not significant for the years ended December 29, 2024 and
December 31, 2023. The change in the forward element of derivatives designated as cash flow hedges to reduce
foreign currency risk was not significant for the years ended December 29, 2024 and December 31, 2023.
Approximately $13.3 million of net losses presented in accumulated other comprehensive income as at December 29,
2024 are expected to be reclassified to inventory or net earnings within the next twelve months.
15. SHARE-BASED COMPENSATION:
The Company’s Long-Term Incentive Plan (the "LTIP") includes stock options, stock appreciation rights ('SARs'), and
restricted share units. The LTIP allows the Board of Directors to grant stock options, SARs, dilutive restricted share units
("Treasury RSUs"), and non-dilutive restricted share units ("non-Treasury RSUs") to officers and other key employees of
the Company and its subsidiaries. The number of common shares that are issuable pursuant to the exercise of stock
options and the vesting of Treasury RSUs for the LTIP is fixed at 13,797,851. As at December 29, 2024, 573,710 common
shares remained authorized for future issuance under this plan.
The exercise price payable for each common share covered by a stock option or SARs is determined by the Board of
Directors at the date of the grant, but may not be less than the closing price of the common shares of the Company on the
trading day immediately preceding the effective date of the grant. Most stock options vest equally beginning on the
second, third, fourth, and fifth anniversary of the grant date. Stock options granted in fiscal 2020 all vested on the third
anniversary of the grant date, subject to performance vesting conditions in some cases. SARs granted in fiscal 2020
vested on the third anniversary of the grant date, and were subject to performance vesting conditions, with the result that
75% of the SARs vested and 25% were forfeited. No stock options or SARs have been granted since fiscal 2020.
Holders of Treasury RSUs and non-Treasury RSUs are entitled to dividends declared by the Company which are
recognized in the form of additional equity awards equivalent in value to the dividends paid on common shares. The
vesting conditions of the additional equity awards are subject to the same performance objectives and other terms and
conditions as the underlying equity awards. The additional awards related to outstanding Treasury RSUs and non-
Treasury RSUs expected to be settled in common shares are credited to contributed surplus when the dividends are
declared.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 100
15. SHARE-BASED COMPENSATION (continued):
(a) Stock options:
Outstanding stock options were as follows:
Stock options issued in Canadian dollars and to be exercised on the TSX:
Number
Weighted exercise
price (CA$)
Stock options outstanding, January 1, 2023
746
$
36.52
Changes in outstanding stock options:
Exercised
(463)
33.01
Stock options outstanding, December 31, 2023
283
42.27
Changes in outstanding stock options:
Exercised
—
—
Stock options outstanding, December 29, 2024
283
$
42.27
Stock options issued in U.S. dollars and to be exercised on the NYSE:
Number
Weighted exercise
price (US$)
Stock options outstanding, January 1, 2023
1,988
$
27.21
Changes in outstanding stock options:
Forfeited
(213)
30.00
Exercised
(1,591)
26.62
Stock options outstanding, December 31, 2023
184
29.01
Changes in outstanding stock options:
Exercised
(184)
29.01
Stock options outstanding, December 29, 2024
—
$
—
As at December 29, 2024, 282,737 outstanding options issued in Canadian dollars to be exercised on the TSX were
exercisable at the weighted average exercise price of CA$42.27 (December 31, 2023 - 282,737 options at
CA$42.27), and nil outstanding options issued in U.S. dollars and to be exercised on the NYSE, were exercisable at
the weighted average exercise price of nil (December 31, 2023 - 184,664 options at US$29.01).
For stock options exercised during fiscal 2024, the weighted average share price at the date of exercise on the NYSE
was US$42.61. For stock options exercised during fiscal 2023, the weighted average share price at the date of
exercise on the TSX was CA$40.72, and the weighted average share price at the date of exercise on the NYSE was
US$33.06.
The following table summarizes information about stock options issued and outstanding and exercisable at
December 29, 2024:
Options issued and outstanding
Options exercisable
Exercise prices
Number
Remaining
contractual life (yrs)
Number
CA$42.27
283
1
283
The compensation expense related to stock options included in operating income for fiscal 2024 was nil (2023 -
$2.1 million), and the counterpart has been recorded as contributed surplus. When the underlying shares are issued
to the employees, the amounts previously credited to contributed surplus are transferred to share capital.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 101
15. SHARE-BASED COMPENSATION (continued):
(b) Stock appreciation rights ("SARs"):
As at December 29, 2024, nil SARs remained outstanding (2023 - nil). During fiscal 2023, 618,304 SARs vested and
settled through the delivery of shares and 206,102 SARs were forfeited. The compensation expense related to SARs
included in operating income for fiscal 2024 was nil (2023 - $1.4 million), and the counterpart has been recorded as
contributed surplus.
(c) Restricted share units:
A Treasury RSU represents the right of an individual to receive one common share on the vesting date without any
monetary consideration being paid to the Company. All Treasury RSUs awarded to date vest within a four to five-year
period. Treasury RSUs may also be subject to performance conditions.
On December 12, 2024, the Company granted treasury share units to employees eligible to participate in the
Company's long-term incentive plan (LTIP), subject to share price hurdle performance objectives. This award will vest
at the end of a four or five-year period. Based on the Monte-Carlo pricing model, the grant date fair value of options
granted of 1,530,644 units during the fiscal year ended December 29, 2024 was $21.91 per unit. The fair value of the
grant of $33.5 million will be amortized over a 5 year period. The following table summarizes the assumptions used in
the Monte-Carlo option pricing model for the stock option grant:
2024
Exercise price
$48.82
Risk-free interest rate (5 years)
3.76%
Expected volatility
31.81%
Expected dividend yield
1.70%
Outstanding Treasury RSUs were as follows:
Number
Weighted average
fair value per unit
Treasury RSUs outstanding, January 1, 2023
73
$
33.91
Changes in outstanding Treasury RSUs:
Granted
3
29.12
Granted for dividends declared
2
30.98
Forfeited
(17)
29.95
Treasury RSUs outstanding, December 31, 2023
61
34.69
Changes in outstanding Treasury RSUs:
Granted1
1,531
21.91
Granted for dividends declared
1
40.40
Settled through the issuance of common shares
(20)
31.38
Forfeited
—
37.56
Treasury RSUs outstanding, December 29, 2024
1,573
$
22.30
1) Includes 968,068 Treasury RSUs granted to four executive officers of the Company.
As at December 29, 2024 and December 31, 2023, none of the outstanding Treasury RSUs vested.
The compensation expense related to Treasury RSUs included in operating income for fiscal 2024 was an expense of
$0.9 million (2023 - $0.4 million), and the counterpart has been recorded as contributed surplus. When the underlying
shares are issued to the employees, the amounts previously credited to contributed surplus are transferred to share
capital.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 102
15. SHARE-BASED COMPENSATION (continued):
(c) Restricted share units (continued):
Outstanding non-Treasury RSUs were as follows:
Number
Weighted average
fair value per unit
Non-Treasury RSUs outstanding, January 1, 2023
2,089
$
31.63
Changes in outstanding non-Treasury RSUs:
Granted
845
32.12
Additional vesting for performance conditions
493
27.36
Granted for dividends declared
53
31.09
Settled - common shares
(810)
27.08
Settled - payment of withholding taxes
(524)
27.65
Forfeited
(170)
32.10
Forfeited for President & CEO
(460)
34.89
Non-Treasury RSUs outstanding, December 31, 2023
1,516
33.26
Changes in outstanding non-Treasury RSUs:
Granted1
787
38.42
Additional units for vested performance conditions
485
30.73
Granted for dividends declared
33
42.22
Settled - common shares
(707)
31.10
Settled - payment of withholding taxes
(412)
31.08
Forfeited
(42)
35.14
Settled in cash for outgoing executives
(82)
35.08
Reinstated awards for President & CEO
440
37.91
Non-Treasury RSUs outstanding, December 29, 2024
2,018
$
36.91
(1) Includes 291,804 RSUs granted to three executive officers (Key management personnel) of the Company, under the Company’s
annual long-term incentive program (LTIP) and for special retention awards granted to these executive officers to ensure stability
and operational performance in light of the CEO transition process and proxy contest, as well as 211,659 RSUs granted to Mr.
Chamandy on June 28, 2024, under the Company’s annual LTIP program, with a total grant date fair value of $8.7 million. Refer to
note 22 in subsection "Key management personnel compensation" for additional information on executive compensation.
Non-Treasury RSUs have the same features as Treasury RSUs, except that their vesting period is a maximum of
three years and they can be settled in cash based on the Company’s share price on the vesting date, or through the
delivery of common shares purchased on the open market, at the Company's option. Non-Treasury RSUs are settled
in common shares purchased on the open market, and to the extent that the Company has an obligation under tax
laws to withhold an amount for an employee’s tax obligation associated with the share-based payment the Company
settles non-Treasury RSUs on a net basis.
The outstanding non-Treasury RSUs awarded to executive officers have vesting conditions that are dependent upon
the financial performance and share price of the Company relative to a benchmark group of North American publicly
listed companies. In addition, up to two times the actual number of non-Treasury RSUs awarded can vest if
exceptional financial performance is achieved. As at December 29, 2024 and December 31, 2023, none of the
outstanding non-Treasury RSUs were vested.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 103
15. SHARE-BASED COMPENSATION (continued):
(c) Restricted share units (continued):
The compensation cost related to non-Treasury RSUs included in operating income for fiscal 2024 was an expense of
$63.4 million (2023 - $22.9 million), and the counterpart has been recorded as contributed surplus. When the
underlying common shares are delivered to employees for settlement upon vesting, the amounts previously credited
to contributed surplus are transferred to share capital. The increase in the expense compared to last year is mainly
due to the accelerated vesting of non-Treasury RSU awards for outgoing executives Mr. Tyra and Mr. Bajaj resulting
in an expense of $12.3 million as described in notes 16(g) and 22 to these financial statements, and the impact of Mr.
Chamandy’s termination and subsequent reinstatement as President and Chief Executive Officer which included the
reinstatement of share-based awards which had been canceled by the previous Board of Directors in the fourth
quarter of 2023 (resulting in a past service expense of $17.0 million for the year ended December 29, 2024 as
described in note 16(g) to these financial statements). The accelerated expense for the two outgoing executives
includes amounts relating to share-based awards with a total value of approximately $12.0 million, which were
approved during the first quarter of fiscal 2024 but for which the number of RSUs had not been established due to the
Company being in a trading blackout. These awards were fully paid out in the second quarter of fiscal 2024 to the
outgoing executives at the approved value, before the number of RSUs relating thereto was established, and
therefore do not appear in the RSU table above.
(d) Deferred share unit plan:
The Company has a deferred share unit plan for independent members of the Company’s Board of Directors who
must receive at least 50% of their annual board retainers in the form of deferred share units ("DSUs"). The value of
these DSUs is based on the Company’s share price at the time of payment of the retainers or fees. Holders of
deferred share units are entitled to dividends declared by the Company which are recognized in the form of additional
awards equivalent in value to the dividends paid on common shares. DSUs granted under the plan will be
redeemable and the value thereof payable in cash only after the director ceases to act as a director of the Company.
As at December 29, 2024, there were 140,393 (December 31, 2023 - 410,646) DSUs outstanding at a value of
$6.6 million (December 31, 2023 - $13.6 million). This amount is included in accounts payable and accrued liabilities
based on a fair value per deferred share unit of $46.86 (December 31, 2023 - $33.06). The DSU obligation is
adjusted each quarter based on the market value of the Company’s common shares. The Company includes the cost
of the DSU plan in selling, general and administrative expenses, which for fiscal 2024 was $4.9 million (2023 - $2.0
million).
Changes in outstanding DSUs were as follows:
2024
2023
DSUs outstanding, beginning of fiscal year
411
385
Granted
46
80
Granted for dividends declared
4
10
Forfeited
—
—
Redeemed1
(321)
(64)
DSUs outstanding, end of fiscal year
140
411
1) The redemption value of the 321 redeemed DSUs (2023 - nil) is included in accounts payable and accrued liabilities as at
December 29, 2024. Refer to note 22 for additional information.
(e) Employee share purchase plans:
The Company has employee share purchase plans which allow eligible employees to authorize payroll deductions of
up to 10% of their salary to purchase common shares of the Company at a price of 90% of the then current share
price as defined in the plans from Treasury. Employees purchasing shares under the plans subsequent to
January 1, 2008 must hold the shares for a minimum of two years. The Company has reserved 5,000,000 common
shares for issuance under the plans. As at December 29, 2024, 4,335,469 common shares remained authorized for
future issuance under the plans. Included as compensation costs in selling, general and administrative expenses is
$0.2 million (2023 - $0.2 million) relating to the employee share purchase plans.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 104
16. SUPPLEMENTARY INFORMATION RELATING TO THE NATURE OF EXPENSES:
(a) Selling, general and administrative expenses:
2024
2023
Selling expenses
$
55,497
$
68,460
Administrative expenses
218,537
151,905
Distribution expenses
116,735
110,026
$
390,769
$
330,391
(b) Employee benefit expenses:
2024
2023
Salaries, wages and other short-term employee benefits
$
561,793
$
583,860
Share-based payments
64,524
27,118
Post-employment benefits
29,960
52,114
$
656,277
$
663,092
(c)
Cost of sales:
Included in cost of sales for the year ended December 29, 2024 are the following items:
•
An expense of $8.1 million related to the write-down of inventory to net realizable value.
Included in cost of sales for the year ended December 31, 2023 are the following items:
•
An expense of $12.3 million related to the write-down of inventory to net realizable value.
•
Net insurance gains of $3.1 million, primarily related to accrued insurance recoveries at replacement cost
value for damaged equipment in excess of the write-off of the net book value of property plant and
equipment.
(d) Government assistance:
During the year ended December 29, 2024, a recovery of $15.2 million (2023 - $19.6 million) was recognized in cost
of sales in the consolidated statements of earnings and comprehensive income relating to government assistance for
production costs.
During the second quarter of fiscal 2024, the Government of Barbados enacted a jobs credit, in order to foster
economic activity and employment in Barbados. The jobs credit was effective retroactively to January 1, 2024. For the
year ended December 29, 2024, the Company recognized $41.8 million (2023 - nil), for this jobs credit, as a reduction
of SG&A expenses in the consolidated statements of earnings and comprehensive income, of which $25.5 million
was applied as a reduction to income taxes payable, and $16.3 million recorded in other non-current assets.
(e) Sale and leaseback:
During the first quarter of fiscal 2023, the Company entered into an agreement to sell and leaseback one of its
distribution centres located in the U.S. The proceeds of disposition of $51.0 million, which represents the fair value of
the distribution centre, were recognized in the consolidated statements of cash flows as proceeds from sale and
leaseback and other disposals of property, plant and equipment within investing activities. The Company recognized a
right-of-use asset of $3.9 million and a lease obligation of $15.5 million at inception. In addition, a pre-tax gain on sale
of $25.0 million ($15.5 million after tax) was recognized in the consolidated statements of earnings and
comprehensive income in gain on sale and leaseback.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 105
16. SUPPLEMENTARY INFORMATION RELATING TO THE NATURE OF EXPENSES (continued):
(f) Net insurance gains:
During the second quarter of fiscal 2023, the Company finalized an agreement with the insurer to close its insurance
claims related to the two hurricanes which occurred in Central America in November 2020, and received a final
insurance claims payment of $74.0 million, relating to the business interruption portion of its claims. This payment
resulted in the recognition of a corresponding gain in the Company’s consolidated statements of earnings and
comprehensive income in Net insurance gains.
(g) Costs relating to proxy contest and leadership changes and related matters:
During the year ended December 29, 2024, the Company recognized costs relating to the recent proxy contest and
leadership changes and related matters in SG&A expenses of $82.7 million (2023 - $6.3 million), consisting of the
following:
•
Advisory fees on shareholder matters of $36.7 million;
•
Severance and other termination benefits of $21.6 million, to outgoing executives (Mr. Tyra and Mr. Bajaj)
following the conclusion of the proxy contest in May 2024 which includes an expense of $12.3 million resulting
from the accelerated vesting of RSU awards;
•
Compensation expenses relating to Mr. Chamandy’s termination and subsequent reinstatement as President and
Chief Executive Officer of $8.9 million. The expense includes $1.7 million, for short-term incentive plan benefits,
as well as $17.0 million, in stock-based compensation expense adjustments for reinstated share-based awards
(for which a reversal of compensation expense of approximately $6.0 million was recorded in the fourth quarter of
fiscal 2023), partially offset by the reversal of $9.8 million, in severance benefits which had been accrued in the
fourth quarter of 2023;
•
Incremental costs relating to the previous Board and refreshed Board of $8.7 million. These charges include
$4.8 million, for a Directors and Officers run-off insurance policy, $0.6 million, for special board meeting fee
payments, and $3.3 million, for the increase in value of the deferred share units (DSU) liability;
•
Stock-based compensation relating to special retention awards of $3.8 million. The expense includes $5.8 million
in retention awards, partially offset by $2.0 million in jobs credit. At the grant date, these special retention awards
had a total fair value of $8.6 million. The stock-based compensation expense relating to these awards is being
recognized over the respective vesting periods, with most of the awards originally vesting at the end of 2024. In
connection with the departure of Mr. Bajaj, $2.5 million of these awards were fully paid out in cash to him during
the second quarter of 2024; and
•
Advisory, legal and other expenses of $3.0 million, with respect to the announced review process initiated by the
previous Board following receipt of a confidential non-binding expression of interest to acquire the Company.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 106
17. RESTRUCTURING AND ACQUISITION-RELATED (RECOVERIES) COSTS:
Restructuring and acquisition-related costs are presented in the following table, and are comprised of costs directly related
to significant exit activities, including the closure of business locations or the relocation of business activities, significant
changes in management structure, as well as transaction, exit, and integration costs incurred pursuant to business
acquisitions.
2024
2023
Employee termination and benefit costs
$
—
$ 16,638
Exit, relocation and other costs
5,619
10,936
Net (gain) loss on disposal, write-downs and accelerated depreciation of property, plant and
equipment, right-of-use assets and computer software related to exit activities
(10,948)
18,142
Acquisition-related transaction costs
—
46
$
(5,329) $ 45,762
Restructuring and acquisition-related recoveries in fiscal 2024 related to the following: $2.6 million in net gains from the
sale of two previously closed yarn spinning facilities located in the United States, as well as the disposal of certain
equipment, $4.9 million in gains on disposals relating to the sublease of a closed distribution facility in the western United
States, and $2.2 million net losses mainly related to the completion of previously initiated restructuring activities.
Restructuring and acquisition-related costs in fiscal 2023 related to the following: $27.5 million primarily for the
consolidation and closure of manufacturing facilities in Central America in the second quarter of 2023, $11.4 million related
to the closure of a yarn-spinning facility in the U.S. in the fourth quarter of fiscal 2023, $3.7 million related to the December
2022 closure of a yarn-spinning plant in the U.S. and the exit cost from terminating a lease on a previously closed yarn
facility, and $3.2 million in other costs, including costs incurred to complete restructuring activities that were initiated in
fiscal 2022.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 107
18. INCOME TAXES:
The income tax provision differs from the amount computed by applying the combined Canadian federal and provincial tax
rates to earnings before income taxes. The reasons for the difference and the related tax effects are as follows:
2024
2023
Earnings before income taxes
$
514,085
$
564,183
Applicable statutory tax rate
26.5 %
26.5 %
Income taxes at applicable statutory rate
136,233
149,508
Increase (decrease) in income taxes resulting from:
Effect of different tax rates and additional income taxes in other jurisdictions
(110,434)
(141,387)
Global Minimum Tax ("GMT") top-up tax
33,000
—
Income tax and other adjustments related to prior taxation years
(1,279)
(2,824)
Impact of Barbados tax rate changes on the revaluation of deferred income
tax assets and liabilities
10,904
—
Non-recognition of tax benefits related to tax losses and temporary differences
45,171
24,798
Effect of non-deductible expenses and other
(375)
508
Total income tax expense
$
113,220
$
30,603
Average effective tax rate
22.0 %
5.4 %
The Company’s applicable statutory tax rate is the Canadian combined rate applicable in the jurisdictions in which the
Company operates.
The details of income tax expense are as follows:
2024
2023
Current income taxes, includes a recovery of $602 (2023 - $2,848) relating to prior
taxation years
$
100,555
$
20,456
Deferred income taxes:
Impact of Barbados tax rate changes on the revaluation of deferred income
tax assets and liabilities
10,904
—
Origination and reversal of temporary differences
(42,708)
(14,645)
Non-recognition of tax benefits related to tax losses and temporary differences
45,146
24,768
Adjustments relating to prior taxation years
(677)
24
12,665
10,147
Total income tax expense
$
113,220
$
30,603
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 108
18. INCOME TAXES (continued):
The increase in the income tax expense and effective tax rate for the year ended December 29, 2024, compared to last
year, is mainly due to the implementation of Global Minimum Tax and related initiatives in Canada and Barbados, more
specifically as follows:
–
During the second quarter of fiscal 2024, the Government of Barbados increased the corporate tax rate
applicable to the Company from a sliding scale of 5.5% to 1% to a flat rate of 9%, effective January 1, 2024. For
the year ended December 29, 2024, the Company recognized an income tax expense of $47.5 million related to
the impact of the Barbados corporate tax rate increase on the Company’s earnings in Barbados, and a deferred
income tax expense of $10.9 million related to the impact of the tax rate increase on the remeasurement of
deferred tax assets and liabilities in Barbados.
–
During the second quarter of fiscal 2024, the Company became subject to the OECD’s Pillar Two global minimum
tax regime, effective January 1, 2024, as a result of the enactment of the Global Minimum Tax Act in Canada. For
the year ended December 29, 2024, the Company recognized a current tax expense of $33.0 million related to
the top-up tax on the Company’s earnings in Barbados, resulting in an effective tax rate of 15% in Barbados. The
top-up tax is levied on the Company’s subsidiaries in Barbados under Barbados’ domestic top-up tax legislation.
Significant components of the Company’s deferred income tax assets and liabilities relate to the following temporary
differences and unused tax losses:
December
29, 2024
December
31, 2023
Deferred income tax assets:
Non-capital losses
$
138,615
$
119,187
Non-deductible reserves and accruals
50,932
15,233
Property, plant and equipment
18,859
17,470
Lease liability
23,366
16,448
Intangible assets
—
6,737
Other items
10,183
10,202
241,955
185,277
Unrecognized deferred income tax assets
(175,571)
(130,425)
Deferred income tax assets
$
66,384
$
54,852
Deferred income tax liabilities:
Right-of-use assets
$
(20,726) $
(12,312)
Property, plant and equipment
(43,016)
(36,687)
Intangible assets
(9,472)
—
Deferred income tax liabilities
(73,214)
(48,999)
Deferred income taxes
$
(6,830) $
5,853
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 109
18. INCOME TAXES (continued):
The details of changes to deferred income tax assets and liabilities were as follows:
2024
2023
Balance, beginning of fiscal year, net
$
5,853
$
16,000
Recognized in the statements of earnings:
Non-capital losses
19,419
7,394
Non-deductible reserves and accruals
31,097
396
Property, plant and equipment
(4,727)
3,069
Right of use assets and lease liability
(1,539)
438
Intangible assets
(864)
3,310
Other
(1)
14
Impact of Barbados tax rate changes on the revaluation of deferred income
tax assets and liabilities
(10,904)
—
Unrecognized deferred income tax assets
(45,146)
(24,768)
(12,665)
(10,147)
Other
(18)
—
Balance, end of fiscal year, net
$
(6,830) $
5,853
Deferred income tax assets and liabilities are presented in the statement of financial position as follows:
December
29, 2024
December
31, 2023
Deferred income tax assets
$
21,800
$
23,971
Deferred income tax liabilities
28,630
18,118
Deferred income taxes
$
(6,830) $
5,853
As at December 29, 2024, the Company has tax credits, capital and non-capital loss carryforwards, and other deductible
temporary differences available to reduce future taxable income for tax purposes representing a tax benefit of
approximately $175.6 million, for which no deferred tax asset has been recognized (December 31, 2023 - $130.4 million),
because the criteria for recognition of the tax asset was not met. The tax credits and capital and non-capital loss
carryforwards expire between 2027 and 2044. The recognized deferred tax asset related to loss carryforwards is
supported by projections of future profitability of the Company.
The Company has unrecognized deferred income tax liabilities for the undistributed profits of subsidiaries operating in
foreign jurisdictions, for which it currently has no intention to repatriate these profits. If expectations or intentions change in
the future, the Company may be subject to an additional tax liability upon distribution of these earnings in the form of
dividends or otherwise. As at December 29, 2024, a deferred income tax liability of approximately $78 million would result
from the recognition of the taxable temporary differences of approximately $732 million.
The Company previously disclosed in its 2023 Annual Financial Statements that if Pillar Two legislation would have
applied in 2023, the Company’s average effective tax rate would have been approximately 18% in 2023. However, for the
year ended December 29, 2024, the Company’s effective tax rate was 22%, significantly higher than the proforma 2023
effective rate of 18%, due mainly to the impact of $82.7 million of charges incurred in Canada relating to the proxy contest,
and leadership changes, which do not result in any tax benefit in Canada. In addition, the $10.9 million deferred income
tax charge (relating to the remeasurement of deferred tax assets and liabilities) also increased the effective tax rate for
fiscal 2024.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 110
19. EARNINGS PER SHARE:
Reconciliation between basic and diluted earnings per share is as follows:
2024
2023
Net earnings - basic and diluted
$
400,865
$
533,580
Basic earnings per share:
Basic weighted average number of common shares outstanding
162,928
175,938
Basic earnings per share
$
2.46
$
3.03
Diluted earnings per share:
Basic weighted average number of common shares outstanding
162,928
175,938
Plus dilutive impact of stock options, Treasury RSUs, and common
shares held in trust
251
286
Diluted weighted average number of common shares outstanding
163,179
176,224
Diluted earnings per share
$
2.46
$
3.03
Excluded from the above calculation for the year ended December 29, 2024 are nil stock options (2023 - 282,737) which
were deemed to be anti-dilutive.
20. DEPRECIATION AND AMORTIZATION:
2024
2023
Depreciation of property, plant and equipment (note 8)
$
111,132
$
101,161
Depreciation of right-of-use assets (note 9)
14,128
13,356
Adjustment for the variation of depreciation included in inventories at the beginning
and end of the year
(298)
(6,716)
Amortization of intangible assets, excluding software (note 10)
8,104
8,275
Amortization of software (note 10)
5,136
5,568
Depreciation and amortization included in net earnings
$
138,202
$
121,644
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 111
21. SUPPLEMENTAL CASH FLOW DISCLOSURE:
(a) Adjustments to reconcile net earnings to cash flows from operating activities - other items:
2024
2023
Unrealized net loss (gain) on foreign exchange and financial derivatives
$
23
$
(484)
Timing differences between settlement of financial derivatives and transfer of deferred
gains and losses in accumulated OCI to inventory and net earnings
(6,095)
6,250
Other non-current assets
(17,681)
(11,787)
Other non-current liabilities
1,357
(8,021)
$
(22,396) $
(14,042)
(b) Variations in non-cash transactions:
2024
2023
Net additions to property, plant and equipment and intangible assets included in
accounts payable and accrued liabilities
$
(2,894) $
(7,775)
Proceeds on disposal of property, plant and equipment and computer software included
in other current assets
(176)
(446)
Amounts payable relating to taxes on share repurchases included in accounts payable
and accrued liabilities
14,904
—
Reclass from accounts payable and accrued liabilities to contributed surplus pursuant
to change in settlement of restricted share units
(2,384)
—
Amounts payable relating to non-Treasury RSUs to be settled in cash included in
accounts payable and accrued liabilities
2,384
—
Additions to right-of-use assets included in lease obligations
33,794
16,717
Shares repurchases for cancellation included in accounts payable and accrued
liabilities
(9,014)
9,951
Non-cash ascribed value credited to share capital from shares issued or distributed
pursuant to vesting of restricted share units and exercise of stock options
21,184
29,247
Deferred compensation credited to contributed surplus
1,312
(2,075)
Non-cash ascribed value credited to contributed surplus for dividends attributed to
restricted share units
1,275
1,712
(c)
Changes in working capital balances:
2024
2023
Trade accounts receivable
$
(134,372) $
(161,893)
Income taxes
27,588
(4,841)
Inventories
(20,823)
143,215
Prepaid expenses, deposits and other current assets
(11,435)
(1,956)
Accounts payable and accrued liabilities
73,121
(58,993)
$
(65,921) $
(84,468)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 112
22. RELATED PARTY TRANSACTIONS:
Key management personnel compensation:
Key management personnel includes those individuals that have authority and responsibility for planning, directing and
controlling the activities of the Company, directly or indirectly, and is comprised of the members of the executive
management team and the Board of Directors. The amount for compensation expense recognized in net earnings for key
management personnel, was as follows:
2024
2023
Short-term employee benefits(1)
$
10,964
$
5,950
Post-employment benefits
209
199
Termination benefits(2)
(487)
4,431
Share-based payments(1)
53,577
18,376
$
64,263
$
28,956
(1) As a result of the termination and subsequent reinstatement of the employment of Mr. Glenn J. Chamandy as President and Chief
Executive Officer (CEO) and Director of the Company, short-term employee benefits for fiscal 2024 include $1.7 million for short-term
incentive plan benefits, and share-based payments include $17.0 million in stock-based compensation expense adjustments for
reinstated share-based awards (for which a reversal of compensation expense of approximately $6 million was recorded in the fourth
quarter of fiscal 2023 and presented in "termination benefits").
(2) Fiscal 2024 includes $9.3 million of severance to outgoing executives (see note 16(g)), more than offset by the reversal of $9.8 million
in severance benefits which had been accrued in the fourth quarter of 2023. Fiscal 2023 includes a net charge of $4.4 million which
resulted from the termination of the employment of Mr. Glenn J. Chamandy as President and Chief Executive Officer (CEO) and Director
of the Company,
The amounts included in accounts payable and accrued liabilities for share-based compensation awards to key
management personnel were as follows:
December
29, 2024
December
31, 2023
DSUs1
$
18,687
$
13,576
1) $12.1 million of fiscal 2024 amount represents the redemption value of the redeemed and unpaid portion of deferred share units (DSU)
held by members of the Previous board.
Other:
During fiscal 2024, the Company incurred $0.1 million in travel related expenses for the Board of Directors.
During fiscal 2024, the Company incurred expenses for aircraft and other services of $1.3 million (2023 - $1.6 million),
with companies controlled by the President and Chief Executive Officer of the Company. The payments made are in
accordance with the terms of the agreement established and agreed to by the related parties. As at December 29, 2024,
the amount in accounts payable and accrued liabilities related to the airplane usage and other services was $0.2 million
(December 31, 2023 - $0.3 million).
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 113
22. RELATED PARTY TRANSACTIONS (continued):
Key management personnel compensation (continued):
Included in selling, general and administrative expenses (SG&A), for the year ended December 29, 2024, are the
following related party transactions:
–
$21.6 million of severance and other termination benefits to outgoing executives (see note 16(g)). The cash
payouts in the second quarter of 2024 for the severance and termination benefits totaled $24.4 million, of which
$15.3 million was for Mr. Tyra and $9.1 million was for Mr. Bajaj.
–
$9.4 million relating to the approved reimbursement of legal and other advisory expenses incurred by Browning
West (one of the Company's shareholders which has a partner serving on the Company’s Board of Directors
since May 23, 2024). The approved reimbursement relates to expenses incurred by Browning West relating to
the proxy contest which arose following the termination of the Company’s President and Chief Executive Officer,
Mr. Glenn Chamandy, and his subsequent reinstatement as President and Chief Executive Officer on May 24,
2024. As at December 29, 2024, the amount in accounts payable and accrued liabilities related to these charges
was nil.
–
Refer to note 16(g) for compensation expenses relating to Mr. Chamandy’s reinstatement as President and CEO,
as well incremental costs relating to the previous Board and refreshed Board, and note 15 regarding a share-
based award approved for Mr. Chamandy in the second quarter.
23. COMMITMENTS, GUARANTEES AND CONTINGENT LIABILITIES:
(a) Claims and litigation:
The Company is a party to claims and litigation arising in the normal course of operations. The Company does not
expect the resolution of these matters to have a material adverse effect on the financial position or results of
operations of the Company.
We record a liability when we believe that it is both probable that a liability has been incurred and the amount of loss
can be reasonably estimated. Significant judgment is required to determine both the probability of having incurred a
liability and the estimated amount of the liability. We review these matters at least quarterly and adjust these liabilities
to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other updated information and
events, pertaining to a particular case.
(b) Guarantees:
The Company, and some of its subsidiaries, have granted financial guarantees, irrevocable standby letters of credit,
and surety bonds to third parties to indemnify them in the event the Company and some of its subsidiaries do not
perform their contractual obligations. As at December 29, 2024, the maximum potential liability under these
guarantees was $97.7 million (December 31, 2023 - $131.5 million), of which $17.2 million was for surety bonds and
$80.5 million was for financial guarantees and standby letters of credit (December 31, 2023 - $15.2 million and
$116.3 million, respectively).
As at December 29, 2024, the Company has recorded no liability with respect to these guarantees, as the Company
does not expect to make any payments for the aforementioned items.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 114
24. CAPITAL DISCLOSURES:
The Company’s objective in managing capital is to ensure sufficient liquidity to pursue its organic growth strategy and
undertake selective acquisitions, while maintaining a strong credit profile and a capital structure that reflects a target ratio
of financial leverage as noted below.
The Company’s capital is composed of net debt and shareholders’ equity. Net debt consists of interest-bearing debt less
cash and cash equivalents. The Company’s use of capital is to finance working capital requirements, capital expenditures,
business acquisition, payment of dividends, as well as share repurchases. The Company currently funds these
requirements out of its internally-generated cash flows and with funds drawn from its long-term debt facilities.
The primary measure used by the Company to monitor its financial leverage is its net debt leverage ratio. The Company’s
net debt leverage ratio is defined as the ratio of net debt to adjusted EBITDA for the trailing twelve months, on a pro-forma
basis to reflect business acquisitions made during the trailing twelve month period, as if they had occurred at the
beginning of the trailing twelve month period. Adjusted EBITDA is calculated as earnings before financial expenses,
income taxes, and depreciation and amortization, and excludes the impact of restructuring and acquisition-related costs.
Adjusted EBITDA also excludes impairment of goodwill and intangible assets and reversal of impairments on intangible
assets, net insurance gains related to the two hurricanes which impacted the Company’s operations in Central America,
and other adjustments which are considered to be of a non-recurring nature. The Company has set a fiscal year-end net
debt leverage target ratio of 1.5 to 2.5 times adjusted EBITDA. As at December 29, 2024, the Company’s net debt
leverage ratio was 1.9 times (December 31, 2023 - 1.5 times).
In order to maintain or adjust its capital structure, the Company, upon approval from its Board of Directors, may issue or
repay long-term debt, issue shares, repurchase shares, pay dividends or undertake other activities as deemed appropriate
under the specific circumstances. The Board of Directors will consider several factors when deciding to declare quarterly
cash dividends or approve share repurchase programs, including the Company’s present and future earnings, cash flows,
capital requirements and present and/or future regulatory and legal restrictions. There can be no assurance as to the
declaration of future quarterly cash dividends. On February 20, 2024, the Board of Directors approved a 10% increase in
the amount of the current quarterly dividend and declared a cash dividend of $0.205 per share. The Company paid
dividends of $133.5 million during the year ended December 29, 2024, representing dividends declared per common
share of $0.82. On February 18, 2025, the Board of Directors approved a 10% increase in the amount of the current
quarterly dividend and declared a cash dividend of $0.226 per share, on all of the issued and outstanding common shares
of the Company, rateably and proportionately, to the holders of record on March 12, 2025. The Company repurchased for
cancellation a total of 17,735,095 common shares (2023 - 11,830,618 common shares) under its NCIB programs for a
total cost of $761.5 million (2023 - $370.4 million) during the year ended December 29, 2024.
The Company is not subject to any capital requirements imposed by a regulator.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 115
25. FINANCIAL RISK MANAGEMENT:
Due to the nature of the activities that the Company carries out and as a result of holding financial instruments, the
Company is exposed to risks arising from financial instruments, including credit risk, liquidity risk, foreign currency risk,
interest rate risk, commodity price risk, as well as risks arising from changes in the price of its common shares under the
Company's share-based compensation plans.
The Company may periodically use derivative financial instruments to manage risks related to fluctuations in foreign
exchange rates, commodity prices, interest rates, and the market price of its own common shares. The use of derivative
financial instruments is governed by the Company’s Financial Risk Management Policy approved by the Board of
Directors and is administered by the Financial Risk Management Committee. The Financial Risk Management Policy of
the Company stipulates that derivative financial instruments should only be used to hedge or mitigate an existing financial
exposure that constitutes a commercial risk to the Company, and if the derivatives are determined to be the most efficient
and cost effective means of mitigating the Company’s exposure to liquidity risk, foreign currency risk, and interest rate risk,
as well as risks arising from commodity prices. Hedging limits, as well as counterparty credit rating and exposure
limitations are defined in the Company’s Financial Risk Management Policy, depending on the type of risk that is being
mitigated. Derivative financial instruments are not used for speculative purposes.
At the inception of each designated hedging derivative contract, the Company formally designates and documents the
hedging relationship and its risk management objective and strategy for undertaking the hedge. Documentation includes
identification of the hedging instrument, the hedged item, the nature of the risk being hedged, and how the Company will
assess whether the hedging relationship meets the hedge effectiveness requirements, including its analysis of the sources
of hedge ineffectiveness and how they determine the hedge ratio.
Credit risk
Credit risk is the risk of an unexpected loss if a customer or counterparty to a financial instrument fails to meet its
contractual obligations and arises primarily from the Company’s trade accounts receivable. The Company may also have
credit risk relating to cash and cash equivalents and derivative financial instruments, which it manages by dealing only
with highly rated North American and European financial institutions. The Company's credit risk may also be exacerbated
during periods of weak general economic and financial conditions. The Company's trade accounts receivable and credit
exposure fluctuate throughout the year based on the seasonality of its sales and other factors. The Company’s average
trade accounts receivable and credit exposure during an interim reporting period may be significantly higher than the
balance at the end of that reporting period.
Under the terms of a receivables purchase agreement, the Company may continuously sell trade accounts receivables of
certain designated customers to a third-party financial institution in exchange for a cash payment equal to the face value
of the sold trade accounts receivables, less an applicable discount. The Company retains servicing responsibilities,
including collection, for these trade accounts receivables but does not retain any credit risk with respect to any trade
accounts receivables that have been sold. All trade accounts receivables sold under the receivables purchase agreement
are removed from the consolidated statements of financial position, as the sale of the trade accounts receivables qualify
for de-recognition. The receivables purchase agreement, which allows for the sale of a maximum of $400 million of
accounts receivables at any one time, expires on June 17, 2025, subject to annual extensions.
The Company’s credit risk for trade accounts receivables is concentrated as the majority of its sales are to a relatively
small group of wholesale distributors and mass-market and other retailers. As at December 29, 2024, the Company’s ten
largest trade debtors accounted for 87% of trade accounts receivable (2023 - 81%). The Company’s main trade debtors
are located in the U.S. The remaining trade accounts receivable balances are dispersed among a larger number of
debtors across many geographic areas including Canada, Europe, Asia-Pacific, and Latin America.
On October 1, 2024, the Company's two largest wholesale distributors combined their businesses. As at December 29,
2024, these two debtors accounted for 69% of trade accounts receivable (December 31, 2023 - 55% and 10%,
respectively) and 39% of total net sales during fiscal 2024 (2023 - 22% and 16%, respectively).
The Company makes an assessment of whether accounts receivable are collectable, based on an expected credit loss
model which factors in changes in credit quality since the initial recognition of trade accounts receivable based on
customer risk categories. Credit quality is assessed by taking into account the financial condition and payment history of
the Company's customers, and other factors.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 116
25. FINANCIAL RISK MANAGEMENT (continued):
Credit risk (continued)
In determining its allowance for expected credit losses, the Company applies the simplified approach per IFRS 9,
Financial Instruments, and calculates expected credit losses based on lifetime expected credit losses. The Company uses
a provision matrix, which segregates its customers by their economic characteristics and allocates expected credit loss
rates based on days past due of its trade receivables. Expected credit loss rates are based on the Company’s historical
credit loss experience, adjusted for forward-looking factors of the economic environment.
Most of the Company’s customers have been transacting with the Company or its subsidiaries for several years. Certain
wholesale distributors are highly leveraged with significant reliance on trade credit terms provided by a few major vendors,
including the Company, and third-party debt financing, including bank debt secured with trade accounts receivable and
inventory pledged as collateral. The financial leverage of these customers may limit or prevent their ability to refinance
existing indebtedness or to obtain additional financing and could affect their ability to comply with restrictive debt
covenants and meet other obligations. The profile and credit quality of the Company’s mass-market and other retailer
customers vary significantly.
The Company’s extension of credit to customers involves considerable judgment and is based on an evaluation of each
customer’s financial condition and payment history. The Company has established various internal controls designed to
mitigate credit risk, including a dedicated credit function which recommends customer credit limits and payment terms that
are reviewed and approved on a quarterly basis by senior management at the Company’s primary sales offices in
Christ Church, Barbados. Where available, the Company’s credit departments periodically review external ratings and
customer financial statements and, in some cases, obtain bank and other references. New customers are subject to a
specific validation and pre-approval process. From time to time, where circumstances warrant, the Company will
temporarily transact with customers on a prepayment basis. While the Company’s credit controls and processes have
been effective in mitigating credit risk, these controls cannot eliminate credit risk in its entirety and there can be no
assurance that these controls will continue to be effective or that the Company’s historical credit loss experience will
continue.
The Company’s exposure to credit risk for trade accounts receivable by geographic area was as follows as at:
December 29,
2024
December 31,
2023
Trade accounts receivable by geographic area:
United States
$
463,008 $
355,521
Canada
29,242
19,672
Europe and other
50,109
37,305
Total trade accounts receivable
$
542,359 $
412,498
The aging of trade accounts receivable balances was as follows as at:
December 29,
2024
December 31,
2023
Not past due
$
524,319 $
399,317
Past due 0-30 days
14,782
12,321
Past due 31-60 days
7,081
6,150
Past due 61-120 days
3,361
2,147
Past due over 121 days
3,877
3,728
Trade accounts receivable
553,420
423,663
Less allowance for expected credit losses
(11,061)
(11,165)
Total trade accounts receivable
$
542,359 $
412,498
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 117
25. FINANCIAL RISK MANAGEMENT (continued):
Liquidity risk
Liquidity risk is defined as the potential risk that the Company will not be able to meet its financial obligations as they fall
due.
The Company manages its liquidity risk through the management of its capital structure and financial leverage, as outlined
in note 24 to these consolidated financial statements. In addition, the Company manages this risk by continuously
monitoring actual and projected cash flows, taking into account the seasonality of its sales and cash receipts and the
expected timing of capital expenditures.
In managing its liquidity risk, the Company relies on cash resources, debt, and cash flows generated from operations to
satisfy its financing requirements. The Company may also require access to capital markets to support its operations as
well as to achieve its strategic plans. Any impediments to the Company's ability to continue to meet the covenants and
conditions contained in its long-term debt agreements as well as the Company's ability to access capital markets, the
failure of a financial institution participating in its revolving long-term bank credit facilities, or an adverse perception in
capital markets of the Company's financial condition or prospects could have a material impact on its future financing
capability. In addition, the Company's access to capital markets and to financing at reasonable terms and interest rates
could be influenced by the economic and credit market environment, including a potential prolonged economic downturn
and recessions.
The following tables present a maturity analysis based on contractual maturity date of the Company's financial liabilities.
All commitments have been reflected in the consolidated statements of financial position except for purchase
obligations, as well as minimum royalty payments, which are included in the table of contractual obligations below. The
amounts are the contractual undiscounted cash flows.
Carrying
Contractual
Less than
Between 1
Between 4
More than
(in $ millions)
amount
cash flows
1 year and 3 years and 5 years
5 years
Accounts payable and accrued liabilities
$
490.1
$
490.1 $
490.1 $
— $
— $
—
Long-term debt
1,535.9
1,535.9
300.0
450.0
647.1
138.8
Purchase and other obligations
—
521.0
325.0
130.2
46.3
19.5
Lease obligations
117.4
137.3
25.5
44.8
25.7
41.3
Total contractual obligations
$ 2,143.4
$
2,684.3 $
1,140.6 $
625.0 $
719.1 $
199.6
As disclosed in note 24, the Company has granted financial guarantees, irrevocable standby letters of credit, and surety
bonds to third parties to indemnify them in the event the Company and some of its subsidiaries do not perform their
contractual obligations. As at December 29, 2024, the maximum potential liability under these guarantees was
$97.7 million, of which $17.2 million was for surety bonds and $80.5 million was for financial guarantees and standby
letters of credit.
Foreign currency risk
The majority of the Company’s cash flows and financial assets and liabilities are denominated in U.S. dollars, which is the
Company’s functional and reporting currency. Foreign currency risk is mainly limited to the portion of the Company’s
business transactions denominated in currencies other than U.S. dollars, primarily for sales and distribution expenses for
customers outside the U.S., certain equipment purchases, and head office expenses in Canada. The Company’s
exposure relates primarily to changes in the U.S. dollar versus the Canadian dollar, the Pound sterling, the Euro, the
Australian dollar, the Mexican peso, and the Chinese yuan. For the Company’s foreign currency transactions, fluctuations
in the respective exchange rates relative to the U.S. dollar will create volatility in the Company’s cash flows, in the
reported amounts for sales and SG&A expenses in its consolidated statements of earnings and comprehensive income,
and for property, plant and equipment in its consolidated statements of financial position, both on a period-to-period basis
and compared with operating budgets and forecasts. Additional earnings variability arises from the translation of monetary
assets and liabilities denominated in currencies other than the U.S. dollar at the rates of exchange at each reporting
dates, the impact of which is reported as a foreign exchange gain or loss and included in financial expenses (net) in the
statement of earnings and comprehensive income.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 118
25. FINANCIAL RISK MANAGEMENT (continued):
Foreign currency risk (continued)
The Company has entered into foreign exchange cross-currency swap contracts to hedge the exposure to foreign
currency exchange on the principal amount and interest payments of the senior unsecured notes which are denominated
in Canadian dollars.
The Company also incurs a portion of its manufacturing costs in foreign currencies, primarily payroll costs paid in
Honduran Lempiras, Dominican Pesos, Nicaraguan Cordobas, as well as in Bangladeshi Taka. Significant changes in
these currencies relative to the U.S. dollar exchange rate in the future, could have a significant impact on the Company's
operating results.
The Company’s objective in managing its foreign currency risk is to minimize its net exposures to foreign currency cash
flows, by transacting with third parties in U.S. dollars to the maximum extent possible and practical and holding cash and
cash equivalents and incurring borrowings in U.S. dollars. The Company monitors and forecasts the values of net foreign
currency cash flows and, from time to time will authorize the use of derivative financial instruments, such as forward
foreign exchange contracts with maturities of up to three years, to economically hedge a portion of foreign currency cash
flows. The Company had forward foreign exchange contracts outstanding as at December 29, 2024, consisting primarily
of contracts to sell and buy Canadian dollars, sell Euros, sell Pounds sterling, sell Australian dollars, and sell Mexican
pesos in exchange for U.S. dollars. The outstanding contracts and other foreign exchange contracts that were settled
during fiscal 2024 were designated as cash flow hedges and qualified for hedge accounting. The underlying risk of the
foreign exchange contracts is identical to the hedged risk and, accordingly, the Company has established a ratio of 1:1 for
all foreign exchange hedges.
The following tables provide an indication of the Company’s significant foreign currency exposures included in the
consolidated statements of financial position as at December 29, 2024 arising from financial instruments:
December 29, 2024
(in U.S. $ millions)
CAD
GBP
EUR
AUD
MXN
CNY
BDT
Cash and cash equivalents
$ 2.7 $
— $ 6.2 $ 1.2 $ 3.9 $ 2.5 $ 8.5
Trade accounts receivable
27.7
— 24.6
3.5
5.6
0.4
—
Prepaid expenses, deposits and other current
assets
—
—
0.4
0.2
0.1
0.2
6.6
Accounts payable and accrued liabilities
(10.4)
— (14.8) (1.0) (2.1) (0.5) (15.5)
1) The Company is not exposed to foreign exchange gains or losses on its Senior unsecured Canadian notes and related interest
payments, as the Company has entered into foreign exchange cross-currency swap contracts to hedge the exposure on the principal
amount and interest payments.
Based on the Company’s foreign currency exposures arising from financial instruments noted above, and the impact of
outstanding derivative financial instruments designated as effective hedging instruments, varying the foreign exchange
rates to reflect a 5 percent strengthening of the U.S. dollar would have (decreased) increased earnings and other
comprehensive income as follows, assuming that all other variables remained constant:
For the year ended December 29, 2024
(in U.S. $ millions)
CAD
GBP
EUR
AUD
MXN
CNY
BDT
Impact on earnings before income taxes
$ (1.0) $
— $ (0.8) $ (0.2) $ (0.4) $ (0.1) $
—
Impact on other comprehensive (loss) income before income taxes (1.3)
1.3
1.8
0.2
0.4
—
—
An assumed 5 percent weakening of the U.S. dollar during the year ended December 29, 2024 would have had an equal
but opposite effect on the above currencies to the amounts shown above, assuming that all other variables remain
constant.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 119
25. FINANCIAL RISK MANAGEMENT (continued):
Commodity risk
The Company is subject to the commodity risk of cotton prices and cotton price movements, as the majority of its products
are made of 100% cotton or blends of cotton and synthetic fibers. The Company is also subject to the risk of fluctuations
in the prices of crude oil and petrochemicals as they influence the cost of polyester fibers which are used in many of its
products. The Company purchases cotton from third-party merchants, cotton-based yarn from third-party yarn
manufacturers, and polyester fibers from third-party polyester manufacturers. The Company assumes the risk of price
fluctuations for these purchases. The Company enters into contracts, up to eighteen months in advance of future delivery
dates, to establish fixed prices for its cotton and cotton-based yarn purchases and polyester fibers purchases, in order to
reduce the effects of fluctuations in the cost of cotton, crude oil, and petrochemicals used in the manufacture of its
products. These contracts are not used for trading purposes and are not considered to be financial instruments that would
need to be accounted for at fair value in the Company’s consolidated financial statements. Without taking into account the
impact of fixed price contracts, a change of $0.01 per pound in the price of cotton would affect the Company’s annual raw
material costs by approximately $6.0 million, based on current production levels.
In addition, fluctuations in crude oil or petroleum prices also affect the Company's energy consumption costs and can
influence transportation costs and the cost of related items used in its business, including other raw materials the
Company uses to manufacture its products such as chemicals, dyestuffs, and trims. The Company generally purchases
these raw materials at market prices.
The Company also has the ability to enter into derivative financial instruments, including futures and option contracts, to
manage its exposure to movements in commodity prices. Such contracts are accounted for at fair value in these
consolidated financial statements in accordance with the accounting standards applicable to financial instruments. During
fiscal 2024, the Company entered into commodity derivative contracts as described in note 14. The underlying risk of the
commodity derivative contracts is identical to the hedged risk and accordingly, the Company has established a ratio of 1:1
for all commodity derivative hedges. Due to a strong correlation between commodity future contract prices and its
purchased costs, the Company did not experience any significant ineffectiveness on its hedges, other than as disclosed in
note 14(d).
Interest rate risk
The Company is subject to interest rate risk arising from both of its term loans of $300 million and $300 million
respectively, $300 million delayed draw term loan, amounts drawn on its $1 billion revolving long-term bank credit
facilities, and its $50 million unsecured notes payable, all of which bear interest at adjusted term SOFR plus a spread.
The Company generally fixes the rates for adjusted Term SOFR based borrowings. The interest rates on amounts drawn
on debt agreements and on any future borrowings will vary and are unpredictable. Increases in interest rates on new debt
issuances may result in a material increase in financial charges.
The Company has the ability to enter into derivative financial instruments that would effectively fix its cost of current and
future borrowings for an extended period of time. The Company has floating-to-fixed interest rate swaps outstanding to
hedge up to $200 million of its floating interest rate exposure on a designated portion of certain long-term debt
agreements. The interest rate swap contracts are designated as cash flow hedges and qualify for hedge accounting. Refer
to note 14(b) for additional information.
Based on the value of interest-bearing financial instruments during the year ended December 29, 2024, an assumed 0.5
percentage point increase in interest rates during such period would have decreased earnings before income taxes by
$3.8 million. An assumed 0.5 percentage point decrease in interest rates would have had an equal but opposite effect on
earnings before income taxes, assuming that all other variables remain constant.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 120
26. DISAGGREGATION OF REVENUE:
Net sales by major product group were as follows:
2024
2023
Activewear
$
2,831,078
$
2,667,958
Hosiery and underwear
439,512
527,953
$
3,270,590
$
3,195,911
Net sales were derived from customers located in the following geographic areas:
2024
2023
United States
$
2,911,014
$
2,858,120
Canada
107,580
112,426
International
251,996
225,365
$
3,270,590
$
3,195,911
27. ENTITY-WIDE DISCLOSURES:
Property, plant and equipment, right-of-use-assets, intangible assets, and goodwill, are allocated to geographic areas as
follows:
December 29,
2024
December 31,
2023
United States
$
542,322
$
542,005
Canada
57,713
60,519
Honduras
333,390
350,003
Caribbean
475,011
484,373
Asia-Pacific
349,627
320,142
Other
35,741
32,016
$
1,793,804
$
1,789,058
Customers accounting for at least 10% of total net sales for the fiscal years ended December 29, 2024 and December 31,
2023 were as follows:
2024
2023
Customer A
26.8 %
22.4 %
Customer B
12.4 %
16.3 %
As noted in note 25 of these consolidated financial statements, the Company's two largest wholesale distributor
customers (Customer A and B) closed a transaction combining their businesses.
The Company manages its business on the basis of one reportable operating segment.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GILDAN 2024 REPORT TO SHAREHOLDERS 121
EXECUTIVE MANAGEMENT TEAM
Glenn J. Chamandy
President and Chief Executive Officer
Rhodri J. Harries
Executive Vice-President, Chief Financial
and Administrative Officer2
Benito A. Masi
President, Manufacturing
Chuck J. Ward
President, Sales, Marketing, and Distribution3
INVESTOR RELATIONS
Jessy Hayem, CFA
Senior Vice-President, Head of
Investor Relations and Global Communications
investors@gildan.com
CORPORATE COMMUNICATIONS
Geneviève Gosselin
Director, Global Communications and
Corporate Marketing
communications@gildan.com
LEGAL AFFAIRS
Michelle Taylor
Vice-President, General Counsel
and Corporate Secretary
corporate.governance@gildan.com
AUDITORS
KPMG LLP
ANNUAL MEETING OF SHAREHOLDERS
April 30, 2025
At 10:00 AM E.T.
BOARD OF DIRECTORS
Michael Kneeland
Chair of the Board of Directors
Director since 2024
Glenn J. Chamandy
President and Chief Executive Officer
Director since 1984
Michener Chandlee
Committees: Audit & Finance,
Corporate Governance & Social Responsibility
Director since 2024
Ghislain Houle
Commitee Chair: Audit & Finance
Committee: Compensation & Human Resources
Director since 2024
Mélanie Kau
Committee Chair: Corporate Governance & Social Responsibility
Committee: Compensation & Human Resources
Director since 2024
Peter Lee
Committee Chair: Compensation & Human Resources
Committee: Corporate Governance & Social Responsibility
Director since 2024
Karen Stuckey
Committees: Audit & Finance,
Compensation & Human Resources
Director since 2024
J.P. Towner
Committees: Audit & Finance,
Corporate Governance & Social Responsibility
Director since 2024
GILDAN CORPORATE OFFICE
600 de Maisonneuve Boulevard West, 33rd Floor
Montreal, QC H3A 3J2 Canada
514-735-2023
Toll free: 1-866-755-2023
www.gildancorp.com
STOCK INFORMATION
Toronto Stock Exchange
New York Stock Exchange
Symbol: GIL
STOCK TRANSFER AGENT & REGISTRAR
Computershare Investor Services Inc.
100 University Avenue, 8th Floor
Toronto, ON M5J 2Y1 Canada
1-800-564-6253
Toll free fax: 1-888-453-0330
service@computershare.com
SHAREHOLDER INFORMATION1
1) As of December 29, 2024.
2) Luca Barile succeeded Rhodri Harries as Executive Vice-President, Chief Financial Officer (EVP, CFO) on March 1, 2025. Mr. Harries will
occupy the function of EVP, Chief Administrative Officer until his retirement on January 1, 2026.
3) Chuck Ward was appointed to the newly created role of Executive Vice-President, Chief Operating Officer, on March 1, 2025.