Despite the upheavals caused by the power struggle at Gildan following the sudden change of CEO in December, the Montreal clothing manufacturer’s financial performance at the start of the year was better than market expectations.
Adjusted profit for the first three months of the year showed an increase of 31% year-on-year, to 59 US cents per share, while analysts expected 51 US cents per share.
Even if they show a decline of 1% year-on-year, the revenues of US 696 million collected during the months of January, February and March are higher than the US 693 million expected by experts.
Management confirms its forecasts for the entire 2024 financial year, namely an increase of between 13.5% and 19.5% year-on-year in adjusted earnings per share, and stability or an increase at the low end. ‘a single-digit range of revenue growth.
“Our results demonstrate the resilience of the company,” commented new CEO Vince Tyra during a conference call organized after the markets closed on Wednesday.
Vince Tyra became CEO last winter after the board fired Glenn Chamandy in December over succession and strategy issues.
The move sparked a battle for control of the company. Several institutional shareholders publicly expressed their disagreement and demanded the return of Glenn Chamandy to his position. The American investment firm Browning West is the shareholder carrying the torch for the dissidents.
Ahead of the May 28 shareholder meeting, Browning West filed its proxy statement on Wednesday, two days after a similar filing by Gildan.
In a letter accompanying its circular, Browning West said it “firmly believes that a complete reconstitution of the board of directors is absolutely necessary.”
This shareholder specifies that a vote in favor of all its candidates for director positions will guarantee the reinstatement of Glenn Chamandy as CEO.
Browning West warns that the upheaval could increase, as “several senior executives who sold a large number of shares when Vince Tyra was appointed will likely leave their positions if Glenn Chamandy is not immediately reinstated.”
Browning West also says it is concerned about Vince Tyra’s lack of ties with Quebec. “According to public reports, he initially did not intend to move to Montreal, the location of Gildan’s headquarters, but instead intended to manage Gildan’s vast global operations from his hometown, Louisville, in Kentucky, although Gildan has no presence there. »
Also of concern to Browning West is the fact that the Gildan board announced last week that no further updates would be released on the ongoing sales process until after the meeting. “The long delay in providing an update indicates that the sales process would likely have failed. »
Gildan revealed in March that it was in talks with potential buyers.
Browning West is concerned that the sale process has jeopardized Gildan’s long-term prospects. The sales process diverted management’s attention, according to Browning West, which “likely created customer concerns and possibly resulted in sensitive information being shared with competitors and customers who might have been potential buyers.