Garment manufacturer Gildan Activewear has today reported “record” sales for 2022 despite short-term and continuing “headwinds related to the economic environment”.

In the year to the start of January, the Canadian-based group achieved net sales of US$3,240 million (£2,678 million) – a rise of 11% compared to 2021. However, profit was at $541.5 million (£447.6 million), a drop of 10% compared to 2021.

Sales were boosted by activewear, including blank garments, which increased sales in 2022 by 17% to $2,763 million (£2,284 million), compensating for a 14% decline for Gildan’s hosiery and underwear.

Group sales in the last three months of 2022 were $720 million (£595 million) – a fall of 8% compared to the same period the year before – but Gildan said that it achieved a “strong” adjusted operating margin of 18.8% which was “well within our target range”.

Pointing to “a challenging environment” in the latter end of 2022, Gildan president and CEO Glenn J Chamandy said that “despite near-term headwinds related to the economic environment, which impacted our performance in the fourth quarter and which may persist through the first part of 2023, we remain excited about the ‘Gildan Sustainable Growth’ strategy, as well as our strong competitive positioning and ability to support our customers, as we work towards delivering on our long-term growth aspirations”.

With hosiery and underwear accounting for most of the decline in the last three months of 2022, activewear sales were down only 5% to $595 million (£492 million). This decline was due to “lower volumes resulting from a combination of lower POS in retail end-markets and, to a lesser extent, at North American distributors, as well as the absence of inventory replenishment versus a year ago, partly offset by higher net selling prices and the favourable impact of mix”, the company stated.

International sales in the quarter, including the UK, were up 16% over the previous year, benefiting from “inventory replenishment and higher net selling prices”.

The challenging environment has continued into 2023, with Gildan predicting that the first part of this year would see “continued headwinds tied to the demand environment and to strong comparative periods, particularly as we cycle post-pandemic inventory replenishment in the first quarter”.

It added: “We also expect increased margin pressure in early 2023 as we work through higher raw material and input costs currently in our inventories. However, as we move past the first quarter, we expect these headwinds to abate, enabling us to resume our growth trajectory and our path towards delivering on our performance targets.”

Gildan stated its business model was “positioning us well to deliver on our long-term profitability and return targets”. It added: “Our leadership in pricing, product availability and sustainability, combined with our increased manufacturing flexibility is enabling us to grow our market share in key product categories.

“Further, we are well positioned to continue benefiting from favourable industry trends that are playing out such as the casualisation of apparel, the interest for private-label products, the impact of the creator economy and ongoing developments in digital printing, as well as the appeal of nearshoring and sustainable practices – all of which are creating long-term growth opportunities for Gildan given our competitive advantages.”