Gildan Activewear’s (asi/56842) integration of Hanesbrands (asi/59528) is beginning to pay off.

The Counselor Top 40 supplier posted its Q1 earnings this week, reporting a significant spike in overall sales. The figures come just months after the apparel company closed its long-awaited acquisition of Hanesbrands, which it secured back in August 2025. Glenn J. Chamandy, president and CEO of Gildan, said at the time that the joint company expected to deliver at least $200 million in run-rate cost synergies.

According to the most recent earnings report, brand integration initiatives are progressing as planned, and the Montreal, QC-headquartered supplier says it’s on pace to achieve approximately $100 million in synergies in 2026 and roughly $250 million of annual run-rate cost synergies over the next three years.

The company is now focused on disaggregating its net sales, which reached a record $1.17 billion this quarter, up roughly 64% year over year. Retail sales also increased significantly, landing at $614 million, up from $85 million this time last year, which Gildan attributed to the acquisition of Hanesbrands and higher selling prices. Unsurprisingly, Gildan’s underwear brands captured additional market share this quarter.

“We advanced our integration initiatives as planned, with early actions reinforcing our operating model and strengthening our ability to drive efficiency and synergy capture,” Chamandy said. “While the external environment remains uncertain, we are focused on what we can control – driving operational excellence, advancing our integration of Hanesbrands, maintaining cost discipline and consistent execution – all supported by our low-cost vertically integrated platform and strong balance sheet, which position us well to deliver on our strategic and financial objectives.”

Gildan noted in a release issued alongside its earnings report that it continues to see high demand for product lines including Comfort Colors, Champion and AllPro.

Wholesale revenue, however, was down 11.9% to $552 million, which Gildan says is likely due to inventory reduction across its combined customer channels, as well as the preemptive buying ahead of tariffs that occurred during this time last year.

The company also saw financial expenses increase to $67 million, up $37 million compared to the same time last year. This, Gildan says, reflects higher borrowing levels related to the Hanesbrands deal.

The company maintains its full-year 2026 guidance, as well as its three-year objectives for the 2026-2028 period, but noted in its earnings report that the uncertainty of tariffs adds a level of complexity to long-term business planning.

“Such tariffs create uncertainty for our business,” the company says. “It remains difficult to predict whether, when and how existing trade measures may be modified, extended or replaced, particularly in light of the evolving global trade and geopolitical environment and ongoing negotiations between the United States and various trading partners.”

Gildan added that it continues to monitor the conflict in the Middle East to determine any potential impact.

Based on estimated 2024 North American promotional product revenue of $784 million, Gildan ranks third on Counselor’s most recent list of the largest suppliers in the industry.