Gildan Updates Guidance Based on Heritage Sportswear Liquidation

MONTREAL-Gildan announces that it expects to take a charge of roughly $19-23 million in the first quarter of 2019. The company says the charge is related to “the impairment of a trade receivable” from Heritage Sportswear, one of Gildan’s distributor customers in the imprintables channel.

“On March 26, 2019, after unsuccessful ongoing efforts to sell the Heritage business as a going concern, the receiver appointed to administer the Heritage business filed a motion in court for approval of the orderly wind-down of Heritage’s operations and sale of its assets by liquidation,” the company states in a press release. Gildan says it is updating its first-quarter adjusted diluted EPS guidance to reflect the change, estimating the charge at roughly $0.09-$0.11 per diluted share.

“As Heritage is a wholesale distributor selling blank apparel to screen printers and decorators, who in turn resell the decorated garments to end users, the company expects the Gildan business formerly carried out by Heritage (representing Gildan net sales of approximately $60 million in 2018) will be mostly absorbed by other wholesale distributors within the channel,” adds Gildan.

The company also notes that despite the change for the quarter, it does not expect any “adverse impact” on its full-year sales projection for 2019.

For more information, visit http://www.gildancorp.com.