Gildan Activewear Inc. says it is feeling some of the same pain as the airline industry as COVID-19 has upended the tourism business and demand for holiday printed T-shirts.
The Montreal-based clothing manufacturer is a big producer of imprintables, blank shirts that wholesale customers use to affix printed designs.
Sales of these products decreased 21 per cent in North America in the third quarter and 25 per cent in international markets.
In addition to less demand by vacationers on the hunt for souvenirs, demand for shirts has been reduced by the cancellation of sporting events and rock concerts, said CEO Glenn Chamandy.
"None of these things have really come back and social distancing is still a factor," he said Thursday during a conference call with analysts.
Gildan has partially offset some of this pressure by seeing sales of underwear — both private label products made for large retailers and its own Gildan brand — double in the latest quarter.
Online sales are also making up for "the void of the tourism and travel."
"So the question is going to be all functional with the pandemic, when social gatherings will commence again and then we'll see the traditional business come back," Chamandy said.
Overall sales totalled US$602.3 million for the quarter, down from US$739.7 million in the same quarter last year, but up from US$230 million in the second quarter of this year.
While the company is ramping up production to about 75 per cent of capacity and sales are up in the current quarter, new virus infections makes the outlook uncertain, Chamandy said.
"While this is an encouraging start to the fourth quarter, we nonetheless remain cautious given the ongoing trajectory of the pandemic, particularly with news of the recent surge in cases globally and the unclear global economic outlook and the impact all of this could have in the demand for our products."
Gildan, which keeps its books in U.S. dollars, says the profit amounted to 28 cents per diluted share for the quarter ended Sept. 27 compared with a profit of US$104.9 million or 51 cents per share a year earlier.
On an adjusted basis, Gildan says it earned US$59.2 million or 30 cents per share for the quarter compared with an adjusted profit of US$108.4 million or 53 cents per share a year earlier.
Analysts on average had expected a profit of 10 cents per share for the quarter and $543.1 million in revenue, according to financial data firm Refinitiv.
Gildan owns and operates clothing factories in Central America, the Caribbean, North America, and Bangladesh.
This report by The Canadian Press was first published Oct. 29, 2020.
Companies in this story: (TSX:GIL)