The apparel giant doubles its scale with HanesBrands deal while posting strong third-quarter profits
Gildan Activewear (TSX:GIL)(NYSE:GIL) has officially finalized its transformational 2.2 billion dollar acquisition of HanesBrands to double its operational scale and create a global leader in basic apparel. The Montreal-based manufacturer simultaneously reported record third-quarter results driven by strong demand in activewear and significant margin improvements despite broader market weakness in hosiery. Management updated its full-year guidance to reflect continued momentum and expects to deliver at least 200 million dollars in cost synergies from the integration of the newly combined entities.
Key Numbers
- 2.2 billion U.S. dollars total equity value for the HanesBrands acquisition
- 911 million U.S. dollars in record third quarter net sales
- 1.00 U.S. dollar in record adjusted diluted earnings per share
- 23.2 percent record adjusted operating margin
- 200 million U.S. dollars in targeted annual cost savings
Gildan is moving aggressively to cement its status as a dominant force in the global apparel market. The company recently completed its acquisition of HanesBrands Inc., a deal valued at approximately 2.2 billion U.S. dollars. Under the terms of the agreement, HanesBrands shareholders received 0.80 U.S. dollars in cash and 0.102 Gildan shares for each share held. CEO Glenn Chamandy emphasized that this combination doubles the company’s scale and unites iconic brands under a low cost vertically integrated platform. The immediate priority for the expanded organization is executing a seamless integration to capture the projected 200 million U.S. dollars in run rate cost synergies.
Financial Performance and Outlook
Financial results for the third quarter ended September 28, 2025, underscore the strength of Gildan’s core business even before the full benefits of the merger take hold. Net sales rose 2.2 percent to 911 million U.S. dollars, supported by a 5.4 percent increase in the activewear segment. This growth was driven by favourable product mix and higher net prices, helping to offset a sharp 22.1 percent decline in the hosiery and underwear category. The company attributed the drop in hosiery to shipment timing shifts and general market weakness. Despite these headwinds, efficient cost management and pricing strategies pushed adjusted operating margins to a record 23.2 percent.
Looking ahead, management has narrowed its full-year outlook with heightened optimism. The company now expects 2025 revenue growth in the mid single digits and has raised its adjusted diluted EPS guidance to a range of 3.45 to 3.51 U.S. dollars. This represents a year-over-year increase of approximately 15 to 17 percent. While the company acknowledges the fluidity of the global trade environment, the vertically integrated model remains a key asset in mitigating inflationary pressures and tariff impacts.
With a massive expansion of its asset base and record profitability in its primary segment, Gildan Activewear appears well positioned for long term investors seeking exposure to a market leader with significant scale and synergy potential. Year to date, Gildan’s stock is up over 24%.