2 Reasons to Buy Gildan Activewear Stock Like There’s No Tomorrow

Canada’s stock market continues to rebound this year as easing monetary policy amid falling inflation continues to boost investor confidence. One of the top performers of 2024 TSX like that Gildan Sportswear (TSX:GIL). Shares of this Montreal-based clothing manufacturer are up 59% so far this year, trading at $69.63 per share. market value It reached 10.8 billion dollars. And the momentum in GIL shares shows no signs of slowing down.

I will discuss two of them in this article. basis Reasons why Gildan Activewear shares might be a smart buy right now.

Gildan’s record-breaking financial performance

When it comes to numbers, Gildan reveals nothing but impressive financial results. Clothing company in the third quarter of 2024 broken It set a record with sales of US$891 million, reflecting a 2.4% annual (YoY) increase, even as the consumer spending environment remains uncertain.

What’s even more remarkable is how Gildan has managed to increase its profitability as well as its revenue. In the latest quarter, gross profit margin increased sharply to 31.2% from 27.5% a year ago. This improvement was largely due to lower raw material costs and better production efficiency. This shows how Gildan is trying to master the art of keeping expenses low while increasing his income. Clearly, this type of financial performance boosts investors’ confidence because it shows that the company is not only growing, but is doing so profitably.

But it doesn’t end there. The company’s adjusted quarterly earnings also rose 14.9% year over year to $0.85 per share. Similarly, it generated $149 million in free cash flow during the quarter. And while Gildan continues to use that money to reward shareholders, it’s not letting that money sit idle. dividends and aggressive stock buybacks. It announced a cash dividend of $0.205 per share for the fourth quarter, payable in mid-December 2024.

Gildan’s financial outlook looks brighter than ever

If you’re wondering whether Gildan can maintain its momentum, its updated guidance for 2024 should put your mind at ease. Despite the uncertain global economic environment, the company now expects revenue to grow in the low single digits for this year, and that’s even after the sock licensing deal with Under Armor expires. Without this headwind, its growth in the mid-single-digit range would have been even more impressive.

And it’s not just income. Gildan projects adjusted operating margins to exceed 21% for the full year 2024, while adjusted earnings per share are expected to increase between 15.5% and 17.5% on an annual basis.

Another key factor that makes Gildan shares so attractive right now is its relentless focus on the future. The company does not only rely on past successes, but also actively invests in new ideas and launches new products to maintain its superiority in the market. For example, Gildan’s soft cotton technology is emerging as a game-changer in the apparel industry. More importantly, this innovative product line has been well received by consumers.

Stupid takeaway

When you take a closer look at Gildan Activewear, you can see why this top TSX stock is such a strong performer in 2024. From record-breaking financial performance to a solid pipeline of innovative products, Gildan shares have all the right ingredients for the long haul. term growth makes it really attractive to buy now and hold for years.