Gildan Sets All-Time Revenue and Cash Flow Records, Targets $250 Million in Integration Synergies for 2026
Record-Breaking Quarter: Earnings and Cash Flow Surge on HanesBrands Integration
Gildan Activewear’s latest results mark a turning point for the company. The fourth quarter delivered all-time high net sales of $1.08 billion—a jump of 31.3% over last year—boosted by the HanesBrands acquisition. Full-year net sales climbed 10.7% to $3.62 billion, underpinned by double-digit gains across categories and geographies. Free cash flow surged 26.7% year-over-year to $493 million, and operating cash flow rose nearly 21% to $606 million. Notably, the company’s adjusted diluted EPS for the year hit a record $3.51, up 17%.
Synergy Targets Raised: HanesBrands Integration Yields Higher Cost Savings
Following the December acquisition of HanesBrands, Gildan increased its projected annual run-rate cost synergies to $250 million by 2028—up from $200 million originally. The bulk of these, about $100 million per year, will be realized in both 2026 and 2027. Integration efforts include facility closures, supply chain streamlining, and IT systems unification. The planned divestment of HanesBrands Australia will help accelerate deleveraging, with proceeds earmarked to reduce net debt back toward the 1.5x–2.5x EBITDA target range.
2026 Outlook: Accelerated Growth with a Focus on Margin and Free Cash Flow
Looking to 2026, Gildan forecasts a major leap in performance. The company projects revenues between $6.0 and $6.2 billion—a 65% to 70% increase, assuming a full-year impact from HanesBrands. Adjusted diluted EPS is expected to land between $4.20 and $4.40, an increase of 20%–25%, while free cash flow is set to exceed $850 million. Adjusted operating margin is targeted at approximately 20%, highlighting both top- and bottom-line strength.
| 2025 (Actual) | 2024 (Actual) | % Change | |
|---|---|---|---|
| Net Sales ($M) | 3,619.2 | 3,270.6 | +10.7% |
| Adjusted Gross Margin | 32.2% | 30.7% | +1.5 pp |
| Adjusted Operating Margin | 21.5% | 21.3% | +0.2 pp |
| Free Cash Flow ($M) | 493.0 | 389.3 | +26.7% |
| Adjusted Diluted EPS | 3.51 | 3.00 | +17.0% |
| Net Debt ($M) | 4,417.1 | 1,568.6 | +181.8% |
| Net Debt Leverage Ratio | 3.0x | 1.9x | — |
Outperformance in Key Categories: Activewear and Innerwear Drive Results
Activewear sales contributed $3.09 billion for the year, rising 9%, fueled by favorable mix, pricing, and new product innovation. Innerwear sales jumped 21% to $531 million, led by the integration of HanesBrands and successful launches under the Champion, ALLPRO, and Comfort Colors brands. U.S. sales comprised the bulk, with international channels showing resilience despite macro softness.
| Segment | 2025 Sales ($M) | 2024 Sales ($M) | % Change |
|---|---|---|---|
| Activewear | 3,088.0 | 2,831.1 | +9.1% |
| Innerwear | 531.2 | 439.5 | +20.9% |
Operational Discipline Reflected in Margins and Cash Generation
Despite short-term impacts from acquisition accounting and restructuring, Gildan’s underlying profitability metrics stayed strong. Adjusted gross margin reached 32.2%, up 1.5 points, as price discipline and cost reductions offset tariff and input cost pressures. Adjusted operating margin for the year was 21.5%. Free cash flow conversion improved meaningfully; Gildan returned $319 million to shareholders through dividends and buybacks in 2025 and announced a 10% dividend increase for 2026.
ESG: Industry Leadership Sustained
On the sustainability front, Gildan was listed in the S&P Global 2026 Sustainability Yearbook for the 14th consecutive year and retained its A- Climate Change score from CDP, reflecting a continued commitment to environmental, social, and governance (ESG) best practices throughout its global operations.
What to Watch: Integration Progress, Leverage Reduction, and Bangladesh Expansion
Attention now turns to the ongoing HanesBrands integration, progress on sale of Australian operations, and construction of the Bangladesh Phase 2 textile facility slated to begin production in 2027. Gildan’s ability to capture projected synergies and accelerate deleveraging will be pivotal for near-term value creation. Management’s guidance offers a confident outlook—should integration stay on track, Gildan will remain well-positioned as one of the global leaders in basic apparel manufacturing, spanning iconic brands and supply chain scale few competitors can match.
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