Custom Tee Shirt maker Gildan Activewear (GIL; NYSE) continues to roar past the competition as they add to their already staggering market share numbers . According to the August 2010 A.C. Nielsen S.T.A.R.S. Data Report, Gildan currently owns a 65% market share in the US market for custom tee shirts. This number represents an 8.8% increase in share for the month and an astounding 20.6% for the calendar year.

We continue to recommend Gildan custom t-shirts for several key reasons. First, the consistency in the Gildan tee shirt manufacturing process means we have very few sizing discrepancies. Second, the color selection continues to grow and the consistency in dye lots means less unmatched color stock for our retail clients. Third, Gildan’s inventory commitment is the best in the tee shirt industry. Stock is deep and back orders are generally only a few days lag time.

Before restructuring charges, adjusted net earnings for the third fiscal quarter ended July 4, 2010 were U.S. $66.4 million or U.S. $0.54 per share, compared to U.S. $44.9 million or U.S. $0.37 per share in the third quarter of fiscal 2009. Net earnings were U.S. $64.7 million or U.S. $0.53 per share, after reflecting a restructuring charge of U.S. $0.01 per share related to the consolidation of U.S. distribution activities announced on December 10, 2009. Earnings and EPS were a record for a fiscal quarter.

The 45.9% increase in adjusted EPS in the third quarter compared to last year was primarily due to strong growth in activewear unit sales volumes and lower promotional activity in the U.S. custom t-shirt distributor channel, partially offset by supply chain inefficiencies due to the integration of new retail products and the impact of the Haiti earthquake, higher selling, general and administrative expenses, and the non-recurrence of a U.S. $0.05 per share prior year income tax recovery recorded in the third quarter of fiscal 2009. Net sales for the third quarter of fiscal 2010 amounted to U.S. $395.3 million, up 28.4% from U.S. $307.8 million in the third quarter of last year. Sales of activewear and underwear were U.S. $351.3 million, up 36.1% from U.S. $258.1 million last year, and sales of socks were U.S. $44.0 million, down 11.5% from last year.

The growth in sales of activewear and underwear compared to fiscal 2009 was primarily due to higher market share in the U.S. wholesale distributor channel, combined with a strong recovery in overall industry demand, which increased by 10.5% compared to the third quarter of last year, continuing strong growth in international and other screenprint markets, an approximately 2% increase in net selling prices for activewear, more favourable activewear product-mix and increased shipments of underwear and activewear to retail customers. The Company noted that demand in the U.S. distributor channel at the end of the quarter may have been positively impacted by purchases by screenprinters in advance of an industry selling price increase which was effective at the beginning of the
fourth quarter.

As an aside, Gildan manufactures all of their yarn in the United States. While the company exports it’s yarn and fabrics we are pleased that this Canadian concern is committed to keeping jobs in this country.    We will be meeting with the head people at Gildan in January 2011.

09/29/2010
Little Falls, New Jersey 07424