No-Moat Gildan Facing Softer Printwear Demand but Its Profitability Holds; Shares Fairly Valued

No-moat Gildan recorded mixed results in 2022’s fourth quarter as sales of its activewear fell more than anticipated due to weaker retail point-of-sale trends and de-stocking by distributors. However, the impact of the sales miss on profit margins was partially mitigated by higher selling prices and cost containment. Moreover, although subpar retail demand has continued into 2023, Gildan’s EPS outlook for the year aligns with our forecast. Thus, we do not expect to make any material revisions to our fair value estimates of $31.50/CAD 42, leaving shares fully valued.