Gildan Activewear Inc. reported Thursday an 8.2% decline in third-quarter net income to $104.9 million.

The lower profit was slightly steeper than the estimate Gildan provided in its Oct. 18 earnings warning for the quarter.

Gildan also projected a 7% decline in diluted and adjusted earnings to 51 cents and 53 cents, respectively, as well as a 2% drop in sales to $740 million: $620 million in activewear and $120 million in hosiery and underwear sales.

Gildan met those forecasts Thursday.

Previous guidance provided Aug. 1 called for adjusted earnings to be flat in the third quarter on projected sales growth in the mid-single-digit range.

Investors responded to the Oct. 18 earnings warnings by sending the share price plunging as much as 34% before closing down 25.3%, or by $8.94, to $26.44.

Some research firms reacted by downgrading the stock to either “hold” or “sale.”

On Thursday, the share price declined 24 cents to close at $25.53.

Gildan, based in Montreal, has major manufacturing and other operations in Mocksville, Eden and Salisbury with more than 1,000 employees combined.

Gildan said Thursday that “while weaker imprintables order flow in North America and on-going softness in international imprintables markets is currently dampening sales and earnings growth in 2019, we do not believe this reflects a structural change to our business as a leading supplier of basic replenishment apparel driven by our large scale, low-cost vertically integrated manufacturing system.”

“Further, our sales to retailers remain largely on track, particularly as we continue to leverage our position as a preferred supplier of private brands.”

The manufacturer lowered on Oct. 18 its fiscal 2019 diluted and adjusted earnings guidance range by 30 cents a share on each side.

Projected diluted earnings decreased from a range of $1.80 to $1.85 to a range of $1.50 to $1.55. Adjusted earnings fell from a range of $1.95 to $2 to a range of $1.65 to $1.70.

It lowered the diluted earnings range further on Thursday to between $1.43 and $1.48, while maintaining the previous adjusted earnings range.

The differences in the diluted and adjusted earnings ranges reflect previously disclosed $30 million in after-tax restructuring and acquisition-related costs.

The manufacturer projects at least $120 million less in fiscal 2019 revenue than previously estimated, reflecting $50 million in the third quarter and $70 million in the fourth quarter.

CFRA Research analyst Camilia Yanushevsky retained Thursday her 12-month share-price target of $38 and her fiscal 2019 earnings forecast of $1.80 a share.

“In our view, the market is underappreciating Gildan’s ‘growing while transforming’ phase,” Yanushevsky said

“As mass retailers spooked by tariffs flex their negotiating leverage with suppliers by accelerating the shift toward private labels and tighten branded products, Gildan has been forward looking, capitalizing on the former’s growing appeal.”

The earnings warning comes after it announced Oct. 16 it was opening a mill operation in Eden, adding 85 jobs and making $17 million in capital investments.

The latest Mocksville workforce count was at more than 200, while it has at least 500 full-time employees in Eden, along with 100 contract workers.

On Thursday, Gildan said it is closing its textile and sewing operations in Mexico, moving production to lower-cost facilities in Central America and the Caribbean. According to Bloomberg News, Gildan has about 1,700 employees in Mexico.

“We are also evaluating additional opportunities to reduce costs and enhance the execution of our growth drivers, including reducing complexity in certain areas of our business,” the company said.

The board declared a cash dividend of 13.4 cents per share. The dividend is payable Dec. 9 to shareholders registered as of Nov. 14.

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