Gildan Activewear Inc. (NYSE: GIL)

Sector: Consumer Cyclical Industry: Apparel Manufacturing CIK: 0001061894
Market Cap 10.78 Bn
P/B 7.24
P/E 22.68
P/S 3.21
ROIC (Qtr) 16.78
Div Yield % 1.24
Rev 1y % (Qtr) 2.18
Total Debt (Qtr) 1.87 Bn
Debt/Equity (Qtr) 1.26

About

Price action

Investment thesis

Bull case

  • Robust free cash flow of 401.81M exceeds capital expenditure of 78.61M by 5.11x, indicating strong organic growth funding capability.
  • Operating cash flow of 480.42M fully covers other non-current liabilities 75.89M by 6.33x, showing strong long-term stability.
  • Tangible assets of 3.56B provide robust 69.03x coverage of other current liabilities 51.51M, indicating strong asset backing.
  • Operating cash flow of 480.42M provides strong 17.13x coverage of operating expenses 28.05M, showing operational efficiency.
  • Robust tangible asset base of 3.56B provides 3.18x coverage of working capital 1.12B, indicating strong operational backing.

Bear case

  • Operating cash flow of 480.42M barely covers its investment activities of (83.77M), with a coverage ratio of -5.73, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 112.63M against inventory of 1.25B, the 0.09 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Cash position of 112.63M provides weak coverage of payables of 585.25M, which is 0.19x, indicating potential working capital stress and supplier relationship risks.
  • Tax assets of 19.62M provide limited offset against tax liabilities of 75.35M, which is 0.26x, indicating potential future cash flow pressure from tax obligations.
  • Operating cash flow of 480.42M is outpaced by equity issuance of (419.79M) (-1.14 ratio), indicating concerning reliance on equity markets for funding operations.

Geographical areas [axis] Breakdown of Revenue (2017)

Products and services [axis] Breakdown of Revenue (2017)

Peer comparison

Companies in the Apparel Manufacturing
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 RL Ralph Lauren Corp 21.00 Bn 22.86 2.68 2.84 Bn
2 GIL Gildan Activewear Inc. 10.78 Bn 22.68 3.21 1.87 Bn
3 LEVI Levi Strauss & Co 8.14 Bn 14.08 1.30 2.31 Bn
4 VFC V F Corp 7.97 Bn 35.68 0.83 5.34 Bn
5 PVH Pvh Corp. /De/ 4.70 Bn 10.38 0.52 4.26 Bn
6 COLM Columbia Sportswear Co 4.28 Bn 33.91 1.69 0.48 Bn
7 KTB Kontoor Brands, Inc. 3.79 Bn 48.22 1.57 1.50 Bn
8 UAA Under Armour, Inc. 3.22 Bn -6.20 0.65 1.69 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 3.11 1.00
EV to Cash from Ops. EV/CFO 26.36 12.51
EV to Debt EV to Debt 6.77 4.24
EV to EBIT EV/EBIT 18.09 7.83
EV to EBITDA EV/EBITDA 15.10 -92.26
EV to Free Cash Flow [EV/FCF] EV/FCF 31.52 14.76
EV to Market Cap EV to Market Cap 1.18 1.66
EV to Revenue EV/Rev 3.77 1.26
Price to Book Value [P/B] P/B 7.24 -7.01
Price to Earnings [P/E] P/E 22.68 19.88
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 -1.12
Dividend Payout Ratio % Div Payout % (Qtr) 28.10 -7.80
Dividend per Basic Share Div per Share (Qtr) 0.88 0.52
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 32.94 20.55
Interest Coverage Int. cover (Qtr) 5.28 26.78
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 44.20 -50.55
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 43.52 10.92
Dividend Growth (1y) % Div 1y % (Qtr) 10.24 2.93
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 16.75 -91.44
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 11.35 -14.51
EBIT Growth (1y) % EBIT 1y % (Qtr) 13.41 -43.47
EBT Growth (1y) % EBT 1y % (Qtr) 9.40 -175.39
EPS Growth (1y) % EPS 1y % (Qtr) 24.11 -217.90
FCF Growth (1y) % FCF 1y % (Qtr) 3.28 -25.41
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 8.47 7.11
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.83 1.16
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.15
Cash Ratio Cash Ratio (Qtr) 0.10 0.33
Current Ratio Curr Ratio (Qtr) 2.01 2.00
Debt to Equity Ratio Debt/Equity (Qtr) 1.26 -1.70
Interest Cover Ratio Int Coverage (Qtr) 5.28 26.78
Times Interest Earned Times Interest Earned (Qtr) 5.28 26.78
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 24.90 -6.80
EBIT Margin % EBIT Margin % (Qtr) 20.83 -10.74
EBT Margin % EBT Margin % (Qtr) 16.89 -17.49
Gross Margin % Gross Margin % (Qtr) 31.90 49.32
Net Profit Margin % Net Margin % (Qtr) 14.10 -19.24