Business challenges resulting from COVID-19 were the driving factor in why Top 40 promo products supplier Gildan (asi/56842) posted a $225.3 million net loss in 2020 on total annual sales that declined nearly 30% year-over-year to $1.98 billion, according to financial data released Thursday, Feb. 25.

Glenn Chamandy, President/CEO, Gildan

Still, the Montreal-headquartered global apparel maker ended last year strong. Fourth quarter sales increased almost 5% year-over-year to $690.2 million. Gildan posted net earnings for Q4 of $67.4 million, or $0.34 per basic share. That was more than double the net earnings from 2019’s fourth quarter. Improved sales of activewear in the imprintables market helped drive sales higher for the quarter.

Despite the turn for the better in Q4, COVID-related impacts toppled sales for the year, as the pandemic weakened demand, resulting in Gildan selling less apparel. For the year, loss per basic share was -$1.14.

“The decrease in activewear sales…was mainly attributable to lower unit sales due to the demand downturn combined with the impact of distributor inventory de-stocking in imprintables, unfavorable product mix and the impact of more aggressive pricing action taken in imprintables during the year primarily through promotional discounting,” Gildan said in a statement.

At the end of the fourth quarter, Gildan’s available liquidity position was $1.56 billion, with net debt totaling $577 million, down from $862 million a year ago. Gildan said that, given the marketplace uncertainty resulting from COVID, it would not issue a financial performance forecast for 2021.

In 2020, Gildan received recognitions for its efforts to operate sustainability, the company noted. ASI Media recently reported that Gildan is among the leading promo suppliers intensifying sustainability initiatives.

The total sales and earnings/losses speak to Gildan’s performance across all its business channels, not just promo. With estimated 2019 North American promotional product revenue of $624 million, Gildan ranked fifth on ASI Media’s most recent list of the largest suppliers in the industry.

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