Gildan Activewear Inc. (NYSE:GIL) Q3 2019 Earnings Conference Call - Final Transcript

Oct 31, 2019 • 08:30 am ET


Gildan Activewear Inc. (NYSE:GIL) Q3 2019 Earnings Conference Call - Final Transcript


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Rhodri J. Harries

restructuring cost projection, is now projected to be $1.43 to $1.48, and adjusted diluted EPS is expected to be in the range of $1.65 to $1.70 in line with the updated adjusted EPS range we announced on October 17. Adjusted EBITDA for the full year is projected to be in the range of $545 million to $555 million, and free cash flow for 2019 is expected to be $200 million to $250 million. Lastly, I just want to point out that our guidance for 2019 does not include potential additional GAAP charges that could arise in relation to the full phaseout of our direct ship-to-the-piece business. We estimate such charges could range between $35 million to $45 million in the fourth quarter.

However, should we incur these charges, we would not expect they will be included in adjusted non-GAAP measures. Finally, I would like to reemphasize our view on our business in line with my comments from the beginning of the call. While we are disappointed by the recent demand weakness, which is impacting results in 2019 and which is further being exacerbated by distributor inventory destocking, we believe our overall business model which has been built on the strength of our large-scale vertically integrated manufacturing system remains intact.

As we navigate through the current sales volatility, we are continuing to focus on further optimization of our manufacturing operations and tight control on SG&A to drive the profitability objectives we have communicated and to continue to enhance our competitive positioning. Further, we will continue our efforts to drive growth in fashion basics, international markets and to grow as a supplier of private brands. In this respect, we are encouraged with the discussions we're having with our retail customers and expect to grow in that area next year. We have a strong balance sheet and expect to continue to generate strong free cash flow, and we will continue to allocate capital where we think we can achieve strong returns and deliver value to our shareholders over the long term.

Thank you, and I will now turn the call back to Sophie.

Sophie Argiriou

Thank you, Rhod. That concludes our formal remarks, and we'll be starting the Q&A session. However I ask that you limit the number of questions to two so we can address as many callers as possible and we will circle back for a second round of questions if time permits. I'll now turn the call over back to the operator for the question-and-answer session. Michelle?