Document


			Contents
			MD&A
			1.0 Preface			2
			2.0 Caution regarding forward-looking statements			2
			3.0 Our business			4
			4.0 Strategy			8
			5.0 Operating results			9
			6.0 Financial condition			19
			7.0 Cash flows			21
			8.0 Liquidity and capital resources			23
			9.0 Legal proceedings			28

			10.0 Financial risk management			28
			11.0 Critical accounting estimates and judgments			28
			12.0 Accounting policies and new accounting standards not yet applied			29
			13.0 Internal control over financial reporting			29
			14.0 Risks and uncertainties			30
			15.0 Definition and reconciliation of non-GAAP financial measures			30

			Condensed interim consolidated financial statements			41

			Notes to the condensed interim consolidated financial statements			45

This MD&A comments on our operations, financial performance, and financial condition as at and for the three and six months ended June 30, 2024. All amounts in this MD&A are in U.S. dollars, unless otherwise noted. For a complete understanding of our business environment, trends, risks and uncertainties, and the effect of accounting estimates on our results of operations and financial condition, this MD&A should be read in conjunction with Gildan’s unaudited condensed interim consolidated financial statements as at and for the three and six months ended June 30, 2024, and the related notes, and with our MD&A for the year ended December 31, 2023 (2023 Annual MD&A).

Certain statements included in this MD&A constitute “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Canadian securities legislation and regulations and are subject to important risks, uncertainties, and assumptions. This forward-looking information includes, amongst others, information with respect to our objectives and the strategies to achieve these objectives, including statements related to the Gildan's Sustainable Growth (GSG) strategy and Next Generation ESG strategy and ESG targets as well as information with respect to our beliefs, plans, expectations, anticipations, estimates, and intentions. In particular, information appearing under the headings “Our business”, “Strategy”, "Operating results", “Liquidity and capital resources - Long-term debt and net debt”, "Financial risk management", and "Risks and uncertainties" contain forward looking statements. Forward-looking statements generally can be identified by the use of conditional or forward-looking terminology such as “may”, “will”, “expect”, “intend”, “estimate”, “project”, “assume”, “anticipate”, “plan”, “foresee”, “believe”, or “continue”, or the negatives of these terms or variations of them or similar terminology. We refer you to the Company’s filings with the Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission, as well as the risks described under the “Financial risk management”, “Critical accounting estimates and judgments”, and “Risks and uncertainties” sections of this MD&A for a discussion of the various factors that may affect the Company’s future results. Material factors and assumptions that were applied in drawing a conclusion or making a forecast or projection are also set out throughout this document.

These factors may cause the Company’s actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. Forward-looking statements do not take into account the effect that transactions or non-recurring or other special items announced or occurring after the statements are made may have on the Company’s business. For example, they do not include the effect of business dispositions, acquisitions, other business transactions, asset write-downs, asset impairment losses, or other charges announced or occurring after forward-looking statements are made. The financial impact of such transactions and non-recurring and other special items can be complex and necessarily depends on the facts particular to each of them.

There can be no assurance that the expectations represented by our forward-looking statements will prove to be correct. The purpose of the forward-looking statements is to provide the reader with a description of management’s expectations regarding the Company’s future financial performance and may not be appropriate for other purposes. Furthermore, unless otherwise stated, the forward-looking statements contained in this report are made as of the date hereof, and we do not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events, or otherwise unless required by applicable legislation or regulation. The forward-looking statements contained in this report are expressly qualified by this cautionary statement.

Gildan is a leading vertically integrated manufacturer of everyday basic apparel, including activewear, underwear, and hosiery products. Our products are sold to wholesale distributors, screenprinters, and embellishers in North America, Europe, Asia-Pacific, and Latin America, as well as to retailers in North America, including mass merchants, department stores, national chains, specialty retailers, craft stores, and online retailers. We also manufacture products for global lifestyle brand companies who market these products under their own brands through their own retail establishments, e-commerce platforms, and/or to third-party retailers.

We believe the skill set that we have developed in designing, constructing, and operating our own manufacturing facilities, the level of vertical integration of our supply chain and the capital investments that we have made over the years differentiate us from our competition who are not as vertically integrated and may rely more heavily on third-party suppliers. Owning and operating the vast majority of our manufacturing facilities allows us to exercise tighter control over our production processes, efficiency levels, costs and product quality, as well as to provide reliable service with short production/delivery cycle times. In addition, running our own operations allows us to achieve adherence to high standards for environmental and social responsibility practices employed throughout our supply chain.

We sell our activewear products primarily in “blank” or undecorated form, without imprints or embellishment. The majority of our Activewear sales are currently derived from activewear sold to wholesale distributors in the imprintables channels in North America and internationally. These wholesale distributors then sell the blank garments to screenprinters/embellishers who decorate the products with designs and logos, and who in turn sell the embellished/imprinted activewear into a highly diversified range of end-use markets. These include educational institutions, athletic dealers, event merchandisers, promotional product distributors, charitable organizations, entertainment promoters, travel and tourism venues, and retailers. The activewear products have diverse applications, such as serving as work or school uniforms or athletic team wear or simply conveying individual, group, and team identity. We also sell activewear products in blank form directly to various retailers, or through national accounts servicing retailers, in addition to underwear and socks for men, ladies, and kids. These retailers include mass merchants, department stores, national chains, sports specialty stores, craft stores, food and drug retailers, dollar stores, and price clubs, all of which sell to consumers through their brick and mortar outlets and/or their e-commerce platforms. Additionally, we sell to pure-play online retailers who sell to consumers. We also manufacture for and sell to select leading global athletic and lifestyle consumer brand companies who distribute these products within the retail channel through their own retail establishments, e-commerce platforms, and/or through third-party retailers.


Primary product categories	Product-line details	Brands
Activewear	T-shirts, fleece tops and bottoms, sport shirts, polos and tank tops	Gildan®, Gildan Performance®, Gildan® Hammer®, Gildan Softstyle®, Gildan® Heavy Cotton™, Gildan® Ultra Cotton®, Gildan DryBlend®, Gildan® HeavyBlend™, Comfort Colors®, American Apparel®
Hosiery	athletic, dress, casual and workwear socks, liner socks, and socks for therapeutic purposes(1)	Gildan®, GoldToe®, Signature Gold by GoldToe®, GoldToe EditionTM, Peds®, MediPeds®, All Pro®, Powersox®
Underwear	men's and boys' underwear (tops and bottoms) and ladies panties	Gildan®, Gildan Platinum®

The vast majority of our products are manufactured in facilities that we own and operate. To a much lesser extent, we also use third-party contractors to supplement certain product requirements. Our vertically integrated operations range from start to finish of the garment production process and include capital-intensive yarn-spinning, textile and sock manufacturing facilities, as well as labour-intensive sewing facilities. Our manufacturing operations are situated in four main hubs, specifically in the United States, Central America, the Caribbean, and Bangladesh. All of our yarn-spinning operations are located in the United States, while textile, sewing, and sock manufacturing operations are situated in the other geographical hubs mentioned above, the largest of which is in Honduras in Central America.

United States

Central America

Caribbean

Asia

Yarn-spinning facilities(1):

conversion of cotton, polyester and other fibres into yarn

■ Salisbury, NC

■ Mocksville, NC

■ Eden, NC

■ Clarkton, NC

■ Sanford, NC

(2 facilities)

■ Mayodan, NC

Textile facilities:

knitting yarn into fabric, dyeing and cutting fabric

■ Honduras
(4 facilities)

■ Dominican
Republic

■ Bangladesh (2 facilities)

Sewing facilities(2):

assembly and sewing of cut goods

■ Honduras
(2 facilities)
■ Nicaragua
(5 facilities)

■ Dominican

Republic

(3 facilities)

■ Bangladesh (3 facilities)

Garment-dyeing(3):

pigment dyeing or reactive dyeing process (Pigment Pure™)

■ Honduras

Hosiery manufacturing facilities:

conversion of yarn into finished socks

■ Honduras

Our global sales and marketing office is located in Christ Church, Barbados, out of which we have established customer-related functions, including sales management, marketing, customer service, credit management, sales forecasting, production planning, inventory control, and logistics, as well as finance, human resources and information technology functions. We also maintain sales support offices in the U.S. We have established extensive distribution operations primarily through internally managed and operated large distribution centres and some smaller facilities in the U.S., a large distribution facility in Honduras, as well as a distribution facility in Bangladesh. To supplement some of our distribution needs, we also use third-party warehouses in North America and Europe.

The basic apparel market for our products is highly competitive. Competition is generally based upon service and product availability, price, quality, comfort and fit, style, and brand. We compete on these factors by leveraging our competitive strengths, including our strategically located and vertically integrated manufacturing supply chain, scale, cost structure, global distribution, and our brand positioning in the markets we serve. We believe our manufacturing skill set, together with our large-scale, low-cost vertically integrated supply chain infrastructure that we have developed through significant investments over time, are key competitive strengths and differentiators from our competition.

We face competition from large and smaller U.S. based and foreign manufacturers or suppliers of basic family apparel. Among the larger competing North American-based manufacturers are Hanesbrands Inc., as well as Fruit of the Loom, Inc., a subsidiary of Berkshire Hathaway Inc., which competes through its own brand offerings and those of its subsidiary, Russell Corporation. These companies manufacture out of some of the same geographies as Gildan and compete primarily within the same basic apparel product categories in similar channels of distribution in North America and international markets. In socks and underwear, our competitors also include Renfro Corporation, Jockey International, Inc., and Kayser Roth Corporation. In addition, we compete with smaller U.S. based companies selling to or operating as wholesale distributors of imprintables activewear products, including Next Level Apparel, Color Image Apparel, Inc. (owner of the Bella + Canvas brand), and Delta Apparel Inc., as well as Central American, Mexican and Asian manufacturers that supply products in the imprintables channel. Finally, although we also compete with some of our customers' own private brand offerings, we also supply products to certain customers that are seeking strategic suppliers with our type of manufacturing capabilities to support their private brand offerings.

Building on a strong foundation, in 2022 the Company launched its “Gildan Sustainable Growth” (GSG) strategy focused on driving organic top and bottom-line growth through three key pillars – capacity expansion, innovation, and ESG. We believe that by leveraging our competitive advantage as a low-cost, vertically integrated manufacturer, successfully executing on well-defined capacity expansion plans, delivering value-driven and innovative products, and leading ESG practices, the Company will be well positioned to drive long-term revenue growth, profitability and effective asset utilization, all of which are expected to allow us to deliver compelling shareholder value creation over the long-term.

The Company has identified and defined specific key initiatives, as well as investments aimed at driving innovation in our product development and manufacturing processes, distribution and final products, including fabric features, product fit, fabric adaptability to evolving printing and decorating techniques, and ESG-friendly product attributes. In early 2024, we announced the release of a number of new products, including our improved ultra cotton 2000 T-shirt. In this regard, we developed a new proprietary cotton technology by re-engineering our entire process from the yarn through to the finished process, enhancing fabric softness, all while improving printability. We are also actively investing in digital tools, predictive analytics, and artificial intelligence to accelerate decision-making across the organization, streamline processes, and optimize supply chain planning.

As of 2024, Gildan is embarking on its third year of implementing its Next Generation ESG strategy, which encompasses a broad range of initiatives. These include reducing carbon footprint and water intensity, fostering a circular economy, supporting regional economic development, ensuring respect for human rights, and maintaining safety standards throughout the supply chain. The strategy also embraces a commitment to people, with a focus on investing in our workforce, promoting diversity and inclusion, in addition to enhancing ESG transparency. This strategy includes 10 core targets focused on five different pillars: Climate, Energy and Water; Circularity; Human Capital Management; Long Term Value Creation, and Transparency and Disclosure. For more detailed information regarding these initiatives, please refer to Gildan's 2023 ESG report. Information in our 2023 ESG Report does not form part of and is not incorporated by reference in this MD&A.

Throughout 2023, the apparel sector faced significant challenges amid broader economic and political uncertainty, contributing to an industry-wide soft demand environment, albeit showing improvement from 2022. Our 2023 net sales were down year-over-year as we faced strong 2022 comparative periods, which had benefited from distributor inventory replenishment following the COVID-19 pandemic. Nevertheless, the printwear industry showed resiliency, marked by continued enthusiasm surrounding experiences, such as travel, concerts, and large events. We have in fact observed sequential improvements in year-over-year point of sales ("POS") trends for Activewear since the beginning of 2023, through the first half of 2024. In the Hosiery and underwear categories, demand remained weak across the industry in 2023 but we capitalized on a comparatively more favorable demand environment versus the previous year.

We delivered adjusted operating margins1 within our annual target range of 18% to 20% in the second half of 2023 and were above this range in the first half of 2024, as the pressure from the flow through of peak cotton costs abated and we continued to benefit from lower manufacturing input costs. Overall, we are proud to have diligently navigated through the changing environment of the past few years, which allowed us to deliver strong performance within key growth categories. Moreover, over the past year we made significant progress on each of the three pillars of our GSG strategy, optimizing our manufacturing capacity, fostering innovation, and further reinforcing our commitment to ESG. While we believe our vertically-integrated manufacturing model and financial strength facilitates our ability to navigate through various headwinds impacting the current market landscape, it is difficult to predict the impact on our business due to the lagging effects of recent inflationary pressures, increased recessionary and geopolitical risks and other factors.

We use non-GAAP financial measures and ratios to assess our operating performance and liquidity. Securities regulations require that companies caution readers that earnings and other measures adjusted to a basis other than IFRS do not have standardized meanings and are unlikely to be comparable to similar measures used by other companies. Accordingly, they should not be considered in isolation. In this MD&A, we use non-GAAP financial measures and ratios including: adjusted net earnings; adjusted earnings before income taxes; adjusted diluted EPS; adjusted income tax expense, adjusted effective income tax rate; adjusted gross profit; adjusted gross margin; adjusted selling, general and administrative expenses (adjusted SG&A expenses); adjusted SG&A expenses as a percentage of net sales; adjusted operating income; adjusted operating margin; and adjusted EBITDA to measure our performance and financial condition from one period to the next, which excludes the variation caused by certain adjustments that could potentially distort the analysis of trends in our operating performance, and because we believe such measures provide meaningful information to investors and management on the Company’s financial performance and financial condition. We also use non-GAAP financial measures including free cash flow, total debt, net debt, net debt leverage ratio and working capital.

Our results of operations for interim and annual periods are impacted by the variability of certain factors, including, but not limited to, changes in end-use demand and customer demand, our customers’ decisions to increase or decrease their inventory levels, changes in our sales mix, and fluctuations in selling prices and raw material costs. While our products are sold on a year-round basis, our business experiences seasonal changes in demand which result in quarterly fluctuations in operating results. Although certain products have seasonal peak periods of demand, competitive dynamics may influence the timing of customer purchases causing seasonal trends to vary somewhat from year to year. Historically, demand for T-shirts is lowest in the fourth quarter and highest in the second quarter of the year, when distributors purchase inventory for the peak summer selling season. Historically, demand for fleece is typically highest in advance of the fall and winter seasons, in the second and third quarters of the year. Sales of hosiery and underwear are typically higher during the second half of the year, during the back-to-school period and the Christmas holiday selling season. These seasonal sales trends of our business also result in fluctuations in our inventory levels throughout the year.

Our results are also impacted by fluctuations in the price of raw materials and other input costs. Cotton and polyester fibers are the primary raw materials used in the manufacture of our products, and we also use chemicals, dyestuffs, and trims, which we purchase from a variety of suppliers. Cotton prices are affected by consumer demand and global supply, which may be impacted by weather conditions in any given year, speculation on the commodities market, the relative valuations and fluctuations of the currencies of producer versus consumer countries, and other factors that are generally unpredictable. While we enter into purchase contracts and derivative financial instruments in advance of delivery to establish firm prices for the cotton component of our yarn requirements, our realized cotton costs can fluctuate significantly between interim and annual reporting periods. Energy costs in our results of operations are also affected by fluctuations in crude oil, natural gas, and petroleum prices, which can also influence transportation costs and the cost of related items used in our business, such as polyester fibers, chemicals, dyestuffs, and trims. Changes in raw material costs are initially reflected in the cost of inventory and only impact net earnings when the respective inventories are sold.

Business acquisitions may affect the comparability of results. In addition, management decisions to consolidate or reorganize operations, including the closure of facilities, may result in significant restructuring costs in an interim or annual period. Subsection 5.5.5 entitled “Restructuring and acquisition-related (recovery) costs” in this MD&A contains a discussion of costs related to the Company’s restructuring actions and business acquisitions. Share repurchases have reduced our number of shares outstanding and increased our net earnings per share (EPS). The effect of asset write-downs, including allowances for expected credit losses, provisions for discontinued inventories, and impairments of long-lived assets can also affect the variability of our results. In the fourth quarter of fiscal 2023, we recorded a reversal of impairment of $41 million, compared to an impairment charge of $62 million in fiscal 2022 relating to our Hosiery cash-generating unit (CGU). Our results of operations over the past two years also include net insurance gains resulting from accrued insurance recoveries for the Company’s claims for losses relating to the two hurricanes in Central America in November 2020 (Q4 2022: $25.6 million, Q1 2023: $3.3 million and Q2 2023: $74 million), and a $16 million after-tax gain on the sale and leaseback of a distribution facility located in the United States in Q1 2023. Our results of operations over the past three quarters have been impacted by higher than usual SG&A expenses, due to costs relating to proxy contest and leadership changes and related matters (Q4 2023: $6.3 million, Q1 2024: $19.7 million and Q2 2024 $57.2 million), as explained in section 5.5.3 and section 15.0 of this MD&A.

On June 20, 2024, the Government of Canada enacted the Global Minimum Tax Act (“GMTA”), implementing the key measures of the OECD’s Pillar Two global minimum tax regime in Canada, including the income inclusion rule and a domestic minimum top-up tax. The enactment of these rules in Canada ensures that Canadian-based multinational enterprises with annual revenues of €750 million or more are subject to a minimum effective tax rate of 15% on their profits in every jurisdiction where they operate. This is achieved through a system of top-up taxes to bring the enterprise’s effective tax rate in each jurisdiction to a minimum of 15%. The GMTA applies to the Company effective January 1, 2024. Under the GMTA, the Company is liable to pay a top-up tax in Canada if the effective tax rate in a jurisdiction is below the 15% minimum rate, as calculated under the Pillar Two rules on a jurisdiction-by-jurisdiction basis.

On May 21, 2024, the Government of Barbados enacted legislation introducing certain tax measures in response to the global implementation of the Pillar Two global minimum tax regime. These measures aim to include raising the corporate tax rate to 9% for most companies and implementing a domestic minimum top-up tax for large multinational enterprises operating in Barbados. Together, these measures aim to ensure that large multinational enterprises operating in Barbados are subject to a minimum effective tax rate of 15% on profits earned in Barbados. As a transitional rule, these measures apply in 2024 only to companies of multinational enterprises headquartered in jurisdictions that have adopted the Pillar Two rules. Consequently, following Canada's enactment of the GMTA on June 20, 2024, these measures apply to the Company’s Barbadian subsidiaries effective January 1, 2024, which together comprise the majority of the Company’s profits. As a result, effective January 1, 2024, the Company’s profits in Barbados are subject to an effective tax rate of 15% under Barbados’ domestic legislation, meaning no top-up tax is payable in Canada (refer to subsection 5.5.8 Income taxes in this MD&A for additional information).


(in $ millions, except per share amounts or otherwise indicated)	Three months ended							Six months ended
	Jun 30, 2024		Jul 2, 2023		Variation			Jun 30, 2024		Jul 2, 2023		Variation
					$	%						$	%

Net sales	862.2		840.4		21.8	2.6	%	1,558.0		1,543.3		14.7	1.0	%
Gross profit	262.0		216.6		45.4	21.0	%	473.1		404.3		68.8	17.0	%
Adjusted gross profit(1)	262.0		216.8		45.2	20.8	%	473.1		401.2		71.9	17.9	%
SG&A expenses	123.6		78.1		45.5	58.3	%	228.9		159.9		69.0	43.2	%
Adjusted SG&A expenses(1)	66.4		78.1		(11.7)	(15.0)	%	152.1		159.9		(7.8)	(4.9)	%
Gain on sale and leaseback	—		—		—	n.m.		—		(25.0)		25.0	n.m.
Net insurance gains	—		(74.2)		74.2	n.m.		—		(74.2)		74.2	n.m.
Restructuring and acquisition-related (recovery) costs	(2.9)		30.0		(32.9)	n.m.		(2.1)		32.8		(34.9)	n.m.
Operating income	141.2		182.7		(41.5)	(22.7)	%	246.3		310.7		(64.4)	(20.7)	%
Adjusted operating income(1)	195.5		138.7		56.8	41.0	%	321.0		241.2		79.8	33.1	%
Adjusted EBITDA(1)	232.3		170.3		62.0	36.4	%	389.4		300.7		88.7	29.5	%
Financial expenses	24.3		20.7		3.6	17.4	%	47.0		37.7		9.3	24.7	%
Income tax expense	58.5		6.7		51.8	n.m.		62.2		20.1		42.1	n.m.
Adjusted income tax expense(1)	46.5		5.7		40.8	n.m.		50.2		9.6		40.6	n.m.
Net earnings	58.4		155.3		(96.9)	(62.4)	%	137.1		252.9		(115.8)	(45.8)	%
Adjusted net earnings(1)	124.7		112.3		12.4	11.0	%	223.8		193.9		29.9	15.4	%
Basic EPS	0.35		0.87		(0.52)	(59.8)	%	0.81		1.42		(0.61)	(43.0)	%
Diluted EPS	0.35		0.87		(0.52)	(59.8)	%	0.81		1.41		(0.60)	(42.6)	%
Adjusted diluted EPS(1)	0.74		0.63		0.11	17.5	%	1.33		1.08		0.25	23.1	%
Gross margin(2)	30.4	%	25.8	%	n/a	4.6 pp		30.4	%	26.2	%	n/a	4.2 pp
Adjusted gross margin(1)	30.4	%	25.8	%	n/a	4.6 pp		30.4	%	26.0	%	n/a	4.4 pp
SG&A expenses as a percentage of net sales(3)	14.3	%	9.3	%	n/a	5.0 pp		14.7	%	10.4	%	n/a	4.3 pp
Adjusted SG&A expenses as a percentage of net sales(1)	7.7	%	9.3	%	n/a	(1.6) pp		9.8	%	10.4	%	n/a	(0.6) pp
Operating margin(4)	16.4	%	21.7	%	n/a	(5.3) pp		15.8	%	20.1	%	n/a	(4.3) pp
Adjusted operating margin(1)	22.7	%	16.5	%	n/a	6.2 pp		20.6	%	15.6	%	n/a	5.0 pp

Higher net sales for the three and six months ended June 30, 2024, reflected sales increases in the Activewear category, partially offset by sales declines in the Hosiery and underwear category. The increases in Activewear sales of $45 million and $49 million for the three and six months period respectively, were primarily due to increased Activewear shipments reflecting positive POS trends across North American and International markets, as well as favourable mix which was mainly driven by higher replenishment of fleece by North American distributors. These factors were partly offset by lower net selling prices, primarily in the first quarter. Furthermore, strong activewear sales in the quarter reflected continued market share gains in key growth categories, including fleece and ring spun products. International markets were up respectively 7% and 4% for the three and six months period, reflecting signs of recovery in these markets and a positive market response to our recently introduced products featuring key innovation including our soft cotton technology. The sales decrease of $23 million in the Hosiery and underwear category for the second quarter and of $34 million in the first six months of 2024, was mainly due to the phase out of the Under Armour business, and to a lesser extent unfavourable mix and continued broader market weakness in innerwear. Excluding the impact of the Under Armour phase-out, Hosiery and underwear sales would have been up mid-single digits and low-single digits, for the second quarter and first half of the year, respectively.

Restructuring and acquisition-related recoveries for the six months ended June 30, 2024 related to the following: $5.3 million in gains on disposals primarily relating to the sublease of a closed distribution facility in the western United States, partially offset by costs of $3.2 million mainly related to the completion of previously initiated restructuring activities. Restructuring and acquisition-related costs for the six months ended July 2, 2023 related to the following: $28.5 million primarily for the consolidation and closure of manufacturing facilities in Central America, $2.9 million related to the December 2022 closure of a yarn-spinning plant in the U.S., and the exit cost from terminating a lease on a previously closed yarn facility, and $1.4 million mainly related to the completion of previously initiated restructuring activities.


	Three months ended					Six months ended
(in $ millions, or otherwise indicated)	Jun 30, 2024		Jul 2, 2023		Variation	Jun 30, 2024		Jul 2, 2023		Variation

Operating income	141.2		182.7		(41.5)	246.3		310.7		(64.4)
Adjustments for:
Restructuring and acquisition-related (recovery) costs(1)	(2.9)		30.0		(32.9)	(2.1)		32.8		(34.9)


Net insurance gains(1)	—		(74.0)		74.0	—		(77.3)		77.3
Gain on sale and leaseback(1)	—		—		—	—		(25.0)		25.0
Costs relating to proxy contest and leadership changes and related matters(1)	57.2		—		57.2	76.8		—		76.8
Adjusted operating income(2)	195.5		138.7		56.8	321.0		241.2		79.8
Operating margin	16.4	%	21.7	%	(5.3) pp	15.8	%	20.1	%	(4.3) pp
Adjusted operating margin(2)	22.7	%	16.5	%	6.2 pp	20.6	%	15.6	%	5.0 pp

The decrease in operating income for the second quarter of fiscal 2024 compared to the same period last year was due to the impact of costs relating to the proxy contest and leadership changes and related matters, and the second quarter of 2023 including a $74 million insurance gain and $30 million in restructuring charges. These impacts were partially offset by higher gross profit. For the six months ended June 30, 2024, compared to the same period last year, the decrease in operating income also reflected the aforementioned items on a year-to-date basis, as well as the $25 million gain on sale and leaseback in 2023.

Adjusted operating income and adjusted operating margin (which excludes the 2024 costs for the proxy contest and leadership changes and related matters, restructuring and acquisition-related costs (and recoveries), and the 2023 net insurance gains and gain on sale and leaseback) was $196 million or 22.7% in the second quarter, and $321 million or 20.6% in the first half of 2024, representing an improvement of 620 and 500 basis points respectively, compared to last year. The increase in adjusted operating margin was mainly due to the improvement in adjusted gross margin and the benefits of the Barbados jobs credit as explained above.


	Three months ended					Six months ended
(in $ millions, or otherwise indicated)	Jun 30, 2024		Jul 2, 2023		Variation	Jun 30, 2024		Jul 2, 2023		Variation

Income tax expense:
Tax expense excluding impact of GMT and other items below	7.5		5.7		1.8	11.2		9.6		1.6
Q1 2024 retroactive impact of GMT	15.5		—		15.5	15.5		—		15.5
Q2 2024 impact of GMT	23.5		—		23.5	23.5		—		23.5
Income tax expense relating to restructuring charges and other adjustments	0.5		1.0		(0.5)	0.5		10.5		(10.0)
Tax rate changes resulting in the revaluation of deferred income tax assets and liabilities	11.5		—		11.5	11.5		—		11.5
Total income tax expense	58.5		6.7		51.8	62.2		20.1		42.1
Adjustments for:
Income tax expense relating to restructuring charges and other adjustments	(0.5)		(1.0)		0.5	(0.5)		(10.5)		10.0
Tax rate changes resulting in the revaluation of deferred income tax assets and liabilities	(11.5)		—		(11.5)	(11.5)		—		(11.5)
Adjusted income tax expense(3)	46.5		5.7		40.8	50.2		9.6		40.6

Earnings before income taxes	116.9		162.0		(45.1)	199.3		273.0		(73.7)




Adjustments(1)(4)	54.3		(44.0)		98.3	74.7		(69.5)		144.2
Adjusted earnings before income taxes(3)	171.2		118.0		53.2	274.0		203.5		70.5

Average effective income tax rate(2)	50.1	%	4.1	%	46.0 pp	31.2	%	7.4	%	23.8 pp
Adjusted effective income tax rate(3)	27.2	%	4.8	%	22.4 pp	18.3	%	4.7	%	13.6 pp

The increase in income tax expense for the first six months of 2024 compared to the same period last year is mainly due to the impact of the implementation of the Global Minimum Tax Act (GMTA) in Canada in June 2024, retroactive to January 1, 2024, as well the Government of Barbados enacting legislation introducing certain tax measures in response to the global implementation of the Pillar Two global minimum tax regime. Refer to section 5.3 of this MD&A for more information on the new tax legislation. As a result of these developments, the Company’s effective tax rate on profits earned in Barbados has increased from 1% to 15%. The retroactive impact of these measures for the first quarter of 2024 has been recorded in the second quarter of 2024, as noted in the above table. In addition, the Company has revalued its deferred income tax liabilities relating to its Barbados operations, as a result of the increase in the Barbados statutory tax rate, resulting in a deferred income tax charge of $11.5 million in the second quarter of 2024. The income tax expense for the first half of 2023 included tax charges of $10.5 million mainly related to the gain on sale and leaseback of a distribution facility.


	Three months ended			Six months ended
(in $ millions, except per share amounts)	Jun 30, 2024	Jul 2, 2023	Variation	Jun 30, 2024	Jul 2, 2023	Variation

Net earnings	58.4	155.3	(96.9)	137.1	252.9	(115.8)
Adjustments for:
Restructuring and acquisition-related (recovery) costs(1)	(2.9)	30.0	(32.9)	(2.1)	32.8	(34.9)

Net insurance gains(1)	—	(74.0)	74.0	—	(77.3)	77.3
Gain on sale and leaseback(1)	—	—	—	—	(25.0)	25.0
Costs relating to proxy contest and leadership changes and related matters(1)	57.2	—	57.2	76.8	—	76.8
Income tax expense relating to the above-noted adjustments	0.5	1.0	(0.5)	0.5	10.5	(10.0)
Income tax recovery related to the revaluation of deferred income tax assets and liabilities	11.5	—	11.5	11.5	—	11.5
Adjusted net earnings(2)	124.7	112.3	12.4	223.8	193.9	29.9

Basic EPS	0.35	0.87	(0.52)	0.81	1.42	(0.61)
Diluted EPS	0.35	0.87	(0.52)	0.81	1.41	(0.60)
Adjusted diluted EPS(2)	0.74	0.63	0.11	1.33	1.08	0.25

The decline in GAAP net earnings for the quarter and the first six months of 2024 compared to the same periods last year was mainly due to the decrease in operating income (which includes the impact of costs relating proxy contest and leadership changes and related matters), higher financial expenses, and higher income taxes due to the impact of GMT in Canada and Barbados as detailed in sections 5.3 and 5.5.8 above. For both periods, adjusted net earnings increased year over year as a result of the higher adjusted operating income, partially offset by the higher financial and income tax expenses. Year over year changes in GAAP diluted EPS and adjusted diluted EPS also reflect the benefit of share repurchases net of the related additional finance expense.


	Three months ended			Six months ended
(in $ millions)	Jun 30, 2024	Jul 2, 2023	Variation	Jun 30, 2024	Jul 2, 2023	Variation

Net earnings	58.4	155.3	(96.9)	137.1	252.9	(115.8)
Adjustments for:
Depreciation and amortization	36.8	31.6	5.2	68.4	59.5	8.9
Non-cash restructuring gains related to property, plant and equipment, right-of-use assets, and computer software	(4.9)	7.5	(12.4)	(5.4)	7.1	(12.5)

Cash settled share-based awards in connection with outgoing executives termination benefits	(15.4)	—	(15.4)	(15.4)	—	(15.4)
Gain on disposal of property, plant and equipment	—	(0.1)	0.1	—	(25.1)	25.1
Deferred income taxes	13.8	2.5	11.3	13.0	9.9	3.1
Share-based compensation	37.0	8.1	28.9	43.2	16.1	27.1
Other	(11.7)	11.3	(23.0)	(12.4)	6.9	(19.3)
Changes in non-cash working capital balances	26.0	(34.4)	60.4	(115.9)	(325.0)	209.1
Cash flows from (used in) operating activities	140.0	181.8	(41.8)	112.6	2.3	110.3


	Three months ended			Six months ended
(in $ millions)	Jun 30, 2024	Jul 2, 2023	Variation	Jun 30, 2024	Jul 2, 2023	Variation

Increase (decrease) in amounts drawn under revolving long-term bank credit facility	79.0	15.0	64.0	234.0	215.0	19.0



Payment of lease obligations	(3.0)	(4.1)	1.1	(6.8)	(17.1)	10.3
Dividends paid	(69.2)	(67.2)	(2.0)	(69.2)	(67.2)	(2.0)
Proceeds from the issuance of shares	1.2	1.0	0.2	1.6	6.1	(4.5)
Repurchase and cancellation of shares	(112.5)	(75.7)	(36.8)	(169.2)	(107.7)	(61.5)
Share repurchases for settlement of non-Treasury RSUs	—	—	—	(13.9)	(19.6)	5.7
Withholding taxes paid pursuant to the settlement of non-Treasury RSUs	(0.1)	(0.1)	—	(8.2)	(15.4)	7.2
Cash flows from (used in) financing activities	(104.6)	(131.1)	26.5	(31.7)	(5.9)	(25.8)

Historically, our primary uses of funds have been for working capital requirements, capital expenditures, the payment of dividends and share repurchases, and business acquisitions, which we have funded with cash generated from operations and with funds drawn from our long-term debt facilities. We have established a capital allocation framework intended to enhance sales and earnings growth as well as shareholder returns. After funding working capital needs, our first priority of cash use is to fund our organic growth with the required capital investments. Beyond these requirements, our next priorities for capital allocation are to support our dividends and repurchase shares. Occasionally, we use capital for opportunistic complementary acquisitions with a preference towards opportunities that could enhance our supply chain model.

The Company has currently set a net debt leverage target ratio3 of 1.5 to 2.5 times pro-forma adjusted EBITDA for the trailing twelve months (previously 1.5 to 2.0 times), which it believes will provide an efficient capital structure and a framework within which it can execute on its capital allocation priorities. We expect that cash flows from operating activities and the unutilized financing capacity under our long-term debt facilities, as well as our ability to obtain additional debt financing if required, will continue to provide us with sufficient liquidity to fund our organic growth strategy, including anticipated working capital requirements and projected capital expenditures of 5% of sales in 2024, as well as for returning capital to shareholders through dividends and continued share repurchases in line with our leverage framework and value considerations. Refer to note 26 of the audited annual consolidated financial statements for the year ended December 31, 2023 for a discussion on the Company’s liquidity risk.


	Effective interest rate(1)	Principal amount		Maturity date
(in $ millions, or otherwise indicated)		Jun 30, 2024	Dec 31, 2023
Non-current portion of long-term debt
Revolving long-term bank credit facility, interest at variable U.S. interest rate(2)(3)	6.7%	469.0	235.0	March 2027
Term loan, interest at variable U.S. interest rate, payable monthly(2)(4)	4.6%	300.0	300.0	June 2026


Notes payable, interest at fixed rate of 2.91%, payable semi-annually(5)	2.9%	100.0	100.0	August 2026
Notes payable, interest at Adjusted SOFR plus a spread of 1.57%, payable quarterly(5)(6)	2.9%	50.0	50.0	August 2026
		919.0	685.0
Current portion of long-term debt


Delayed draw term loan (DDTL), interest at variable U.S. interest rate, payable monthly(2)(4)	7.0%	300.0	300.0	May 2025
		300.0	300.0
Long-term debt (including current portion)		1,219.0	985.0

The total net debt to EBITDA ratios (as defined in the credit facility and note agreements and their amendments) vary from the definition of the Company’s non-GAAP ratio and non-GAAP financial measures “net debt leverage ratio” and “adjusted EBITDA” respectively, as presented in this MD&A in certain respects. The definitions in the loan and note purchase agreements include letters of credit in net debt, exclude certain cash balances, and are based on accounting for all leases in accordance with previous accounting principles whereby the Company’s leases for premises were accounted for as operating leases, while the Company’s reported net debt leverage ratio reflects lease accounting in accordance with the Company’s current accounting policies. In addition, adjustments permitted to EBITDA in the loan and note agreements vary from the adjustments used by the Company in calculating its adjusted EBITDA non-GAAP financial measure. As a result of these differences, our total net debt to EBITDA ratio for purposes of our loan and note agreements was 1.8 at the end of the second quarter of fiscal 2024 (1.6 at December 31, 2023).

The Company may periodically use derivative financial instruments to manage risks related to fluctuations in foreign exchange rates, commodity prices, interest rates, and changes in the price of our common shares under our share-based compensation plans. Derivative financial instruments are not used for speculative purposes. As at June 30, 2024, the Company’s outstanding derivative financial instruments (most of which are designated as effective hedging instruments) consist of foreign exchange and commodity forward, option, and swap contracts, as well as floating-to-fixed interest rate swaps to fix the variable interest rates on a designated portion of borrowings under the Company's term loans and unsecured notes. For more information about our derivative financial instruments, please refer to notes 9 and 10 to the unaudited condensed interim consolidated financial statements as at and for the three and six months ended June 30, 2024.

Our common shares are listed on the New York Stock Exchange (NYSE) and the Toronto Stock Exchange (TSX) under the symbol GIL. As at July 26, 2024, there were 162,610,386 common shares issued and outstanding along with 438,703 stock options and 50,304 dilutive restricted share units (Treasury RSUs) outstanding. Each stock option entitles the holder to purchase one common share at the end of the vesting period at a pre-determined exercise price. Each Treasury RSU entitles the holder to receive one common share from treasury at the end of the vesting period, without any monetary consideration being paid to the Company. Treasury RSUs are used exclusively for one-time awards to attract candidates or for retention purposes and their vesting conditions, including any performance objectives, are determined by the Board of Directors at the time of grant.

In August 2023, the Company received approval from the TSX to renew its normal course issuer bid (NCIB) program commencing on August 9, 2023, to purchase for cancellation a maximum of 8,778,638 common shares, representing approximately 5% of the Company's issued and outstanding common shares, as at July 31, 2023 (the reference date for the NCIB). The Company was authorized to make purchases under the renewed NCIB until August 8, 2024 in accordance with the requirements of the TSX. On May 29, 2024, the Company announced that it had received approval from the TSX to amend its NCIB in order to increase the maximum number of common shares that may be repurchased to 17,124,249 common shares, representing 10% of the public float as at July 31, 2023. No other terms of the NCIB have been amended at such time.

On July 31, 2024, the Company received approval from the TSX to renew its NCIB program commencing on August 9, 2024, to purchase for cancellation a maximum of 16,106,155 common shares, representing approximately 10% of the Company's public float, as at July 26, 2024 (the reference date for the renewed NCIB). The Company is authorized to make purchases under the renewed NCIB until August 8, 2025, in accordance with the requirements of the TSX. Purchases will be made by means of open market transactions on both the TSX and the New York Stock Exchange (NYSE), or alternative U.S. or Canadian trading systems if eligible, or by such other means as may be permitted by securities regulatory authorities, including pre-arranged crosses, exempt offers, private agreements under an issuer bid exemption order issued by securities regulatory authorities and block purchases of common shares. The average daily trading volume of common shares on the TSX (ADTV) for the six-month period ended June 30, 2024, was 320,839. Consequently, and in accordance with the requirements of the TSX, the Company may purchase, in addition to purchases made on other exchanges including the NYSE, up to a maximum of 80,209 common shares daily through the facilities of the TSX, which represents 25% of the ADTV for the most recently completed six-month period noted above.

The Company is exposed to risks arising from financial instruments, including credit risk, liquidity risk, foreign currency risk, interest rate risk, commodity price risk, as well as risks arising from changes in the price of our common shares under our share-based compensation plans. Please refer to note 26 of the audited annual consolidated financial statements for the year ended December 31, 2023 for additional details, and for more information about our derivative financial instruments, please refer to notes 9 and 10 of the unaudited condensed interim consolidated financial statements as at and for the three and six months ended June 30, 2024.

The Company’s unaudited condensed interim consolidated financial statements as at and for the three and six months ended June 30, 2024 were prepared in accordance with International Accounting Standard (“IAS”) 34, Interim Financial Reporting, as issued by the International Accounting Standards Board (“IASB”). The Company applied the same accounting policies in the preparation of the unaudited condensed interim consolidated financial statements as at and for the three and six months ended June 30, 2024 as those disclosed in note 3 of its fiscal 2023 audited annual consolidated financial statements, except as described below.

On January 23, 2020, the IASB issued narrow-scope amendments to IAS 1, Presentation of Financial Statements, to clarify how to classify debt and other liabilities as current or non-current. The amendments (which affect only the presentation of liabilities in the statement of financial position) clarify that the classification of liabilities as current or non-current should be based on rights that are in existence at the end of the reporting period to defer settlement by at least twelve months and make explicit that only rights in place at the end of the reporting period should affect the classification of a liability; clarify that classification is unaffected by expectations about whether an entity will exercise its right to defer settlement of a liability; and make clear that settlement refers to the transfer to the counterparty of cash, equity instruments, other assets, or services. On October 31, 2022, the IASB issued Non-current Liabilities with Covenants (Amendments to IAS 1). These further amendments clarify how to address the effects on classification and disclosure of covenants which an entity is required to comply with on or before the reporting date and covenants which an entity must comply with only after the reporting date. The 2020 amendments and the 2022 amendments (collectively “the Amendments”) are effective for annual periods beginning on or after January 1, 2024 and are applied retrospectively. The amendment of IAS 1 had no impact on the Company’s consolidated financial statements.

In note 26 of our 2023 audited annual consolidated financial statements we describe certain risks related to financial instruments and in our 2023 Annual MD&A under the section “Risks and uncertainties”, we describe the principal risks that could have a material and adverse effect on our financial condition, results of operations or business, cash flows, or the trading price of our common shares, as well as cause actual results to differ materially from our expectations expressed in or implied by our forward-looking statements. The risks listed below are not the only risks that could affect the Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our financial condition, results of operations, cash flows, or business. The risks described in our 2023 Annual MD&A include:

We use non-GAAP financial measures, as well as non-GAAP ratios to assess our operating performance and financial condition. The terms and definitions of the non-GAAP financial measures used in this MD&A and a reconciliation of each non-GAAP measure to the most directly comparable GAAP measure are provided below. The non-GAAP financial measures are presented on a consistent basis for all periods presented in this MD&A. These measures do not have any standardized meanings prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Accordingly, they should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

In this MD&A we use non-GAAP financial measures including adjusted net earnings, adjusted earnings before income taxes, adjusted income tax expense, adjusted gross profit, adjusted SG&A expenses, adjusted operating income, adjusted EBITDA, as well as non-GAAP ratios including adjusted diluted EPS, adjusted effective income tax rate, adjusted gross margin, adjusted SG&A expenses as a percentage of net sales, and adjusted operating margin. These financial metrics are used to measure our performance and financial condition from one period to the next, which excludes the variation caused by certain adjustments that could potentially distort the analysis of trends in our operating performance, and because we believe such measures provide meaningful information on the Company’s financial performance and financial condition. Excluding these items does not imply they are non-recurring. We also use non-GAAP financial measures including free cash flow, total debt, net debt, net debt leverage ratio and working capital.

Restructuring and acquisition-related costs are comprised of costs directly related to significant exit activities, including the closure of business locations and sale of business locations or the relocation of business activities, significant changes in management structure, as well as transaction, exit, and integration costs incurred pursuant to business acquisitions. Restructuring and acquisition-related costs is included as an adjustment in arriving at adjusted operating income, adjusted operating margin, adjusted net earnings, adjusted earnings before income taxes, adjusted diluted EPS, and adjusted EBITDA. For the three and six months ended June 30, 2024, restructuring and acquisition-related recoveries of $2.9 million and $2.1 million (2023 - $30.0 million costs and $32.8 million costs), respectively, were recognized. Subsection 5.5.5 entitled “Restructuring and acquisition-related (recovery) costs” in this MD&A contains a detailed discussion of these costs.

On December 11, 2023, the Company’s then Board of Directors (the “Previous Board”) terminated the Company’s President and Chief Executive Officer, Glenn Chamandy. On such date, the Previous Board appointed Vince Tyra as President and Chief Executive Officer, and Mr. Tyra took office in the first quarter of fiscal 2024, effective on January 15, 2024. Following the termination of Mr. Chamandy, dissenting shareholder Browning West and others initiated an activist campaign and proxy contest against the Previous Board, proposing a new slate of Directors and requesting the reinstatement of Mr. Chamandy as President and Chief Executive Officer. In the second quarter of 2024, on April 28, 2024, in advance of the May 28, 2024 Annual General Meeting of Shareholders (“Annual Meeting”), the Previous Board announced a refreshed Board of Directors (“Refreshed Board”) that resulted in the immediate replacement of five Directors, with two additional Directors staying on temporarily but not standing for re-election at the Annual Meeting. On May 23, 2024, five days prior to the Annual Meeting, the Refreshed Board and Mr. Tyra resigned, along with Arun Bajaj, the Company’s Executive Vice-President, Chief Human Resources Officer (CHRO) and Legal Affairs. The Refreshed Board appointed Browning West nominees to the Board of Directors (the “New Board”), effective as of that date. On May 24, 2024, the New Board reinstated Mr. Chamandy as President and Chief Executive Officer. On May 28, 2024, the New Board was elected by shareholders at the Annual Meeting. During this six month timeline, the Company incurred significant expenses primarily at the direction of the Previous Board and the Refreshed Board, including: (i) legal, communication, proxy advisory, financial and other advisory fees relating to the proxy contest and the termination of Mr. Chamandy; (ii) legal, financial and other advisory fees with respect to a review process initiated by the Previous Board following receipt of a confidential non-binding expression of interest to acquire the Company; (iii) special senior management retention awards; (iv) severance and termination benefits relating to outgoing executives; and (v) incremental director meeting fees and insurance premiums. In addition, subsequent to the Annual Meeting, the Corporate Governance and Social Responsibility Committee (the "CGSRC") recommended to the New Board, and the New Board approved, back-pay compensation for Mr. Chamandy (who did not receive any severance payment following his termination on December 11, 2023) relating to his reinstatement, including the reinstatement of share-based awards that were canceled by the Previous Board. In light of the strong shareholder support received for its successful campaign and the fact that the Refreshed Board resigned in advance of the Annual Meeting, the CGSRC also recommended to the New Board, and the New Board approved, the reimbursement of Browning West’s legal and other advisory expenses relating to the proxy contest, in the amount of $9.4 million.

The total costs relating to these non-recurring events (“Costs relating to proxy contest and leadership changes and related matters”) amounted to $76.8 million for the first six months of 2024, as itemized in the table below and corresponding footnotes. Such costs are included in selling, general and administrative expenses. The impact of the below charges are included as adjustments in arriving at adjusted SG&A expenses, adjusted SG&A expenses as a percentage of net sales, adjusted operating income, adjusted operating margin, adjusted earnings before income taxes, adjusted net earnings, adjusted diluted EPS, and adjusted EBITDA.


	Three months ended		Six months ended
(in $ millions)	Jun 30, 2024	Jul 2, 2023	Jun 30, 2024	Jul 2, 2023

Advisory fees on shareholder matters(1)	18.0	—	33.3	—
Severance and other termination benefits(2)	21.6	—	21.6	—
Compensation expenses relating to Glenn Chamandy’s termination and subsequent reinstatement as President and Chief Executive Officer(3)	7.8	—	8.9	—
Incremental costs relating to the previous Board and refreshed Board(4)	7.4	—	7.4	—
Costs relating to assessing external interests in acquiring the Company(5)	0.5	—	3.0	—
Special retention awards(6)	1.9	—	2.6	—
Costs relating to proxy contest and leadership changes and related matters	57.2	—	76.8	—

(2) Relates to the payout of severance and other termination benefits to Mr. Tyra and Mr. Bajaj pursuant to existing severance arrangements approved and made by the Refreshed Board in the context of the proxy contest, just prior to its conclusion in May 2024. The cash payouts in the second quarter of 2024 for severance and termination benefits totaled $24.4 million, of which $15.3 million was for Mr. Tyra and $9.1 million was for Mr. Bajaj. The respective charges included in selling, general and administrative expenses during the second quarter of 2024 totaled $21.6 million (of which $14.1 million was for Mr. Tyra and $7.5 million was for Mr. Bajaj), and include $12.3 million for accelerated vesting of share-based awards as well $9.3 million in other termination benefits for these executives.

(6) Stock-based compensation relating to special retention awards of $1.9 million in the second quarter of fiscal 2024 ($2.6 million year-to-date). At the grant date, these special retention awards had a total fair value of $8.6 million. The stock-based compensation expense relating to these awards is being recognized over the respective vesting periods, with most of the awards originally vesting at the end of 2024. In connection with the departure of Mr. Bajaj, $2.5 million of these awards were fully paid out in cash to him during the second quarter of 2024, as part of the $9.1 million payout in note 2 above.

Adjusted net earnings are calculated as net earnings before restructuring and acquisition-related costs, impairment (impairment reversal) of intangible assets, net of write-downs, net insurance gains, gain on sale and leaseback, costs relating to proxy contest and leadership changes and related matters, and income tax expense or recovery relating to these items. Adjusted net earnings also excludes income taxes related to the re-assessment of the probability of realization of previously recognized or de-recognized deferred income tax assets, and income taxes relating to the revaluation of deferred income tax assets and liabilities as a result of statutory income tax rate changes in the countries in which we operate. Adjusted diluted EPS is calculated as adjusted net earnings divided by the diluted weighted average number of common shares outstanding. The Company uses adjusted net earnings and adjusted diluted EPS to measure its net earnings performance from one period to the next, and in making decisions regarding the ongoing operations of its business, without the variation caused by the impacts of the items described above. The Company excludes these items because they affect the comparability of its net earnings and diluted EPS and could potentially distort the analysis of net earnings trends in its business performance. The Company believes adjusted net earnings and adjusted diluted EPS are useful to investors because they help identify underlying trends in our business that could otherwise be masked by certain expenses, write-offs, charges, income or recoveries that can vary from period to period. Excluding these items does not imply they are non-recurring. These measures do not have any standardized meanings prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies.


	Three months ended		Six months ended
(in $ millions, except per share amounts)	Jun 30, 2024	Jul 2, 2023	Jun 30, 2024	Jul 2, 2023

Net earnings	58.4	155.3	137.1	252.9
Adjustments for:
Restructuring and acquisition-related (recovery) costs	(2.9)	30.0	(2.1)	32.8


Net insurance gains	—	(74.0)	—	(77.3)
Gain on sale and leaseback	—	—	—	(25.0)
Costs relating to proxy contest and leadership changes and related matters	57.2	—	76.8	—

Income tax expense relating to restructuring charges and other items	0.5	1.0	0.5	10.5
Income tax recovery related to the revaluation of deferred income tax assets and liabilities	11.5	—	11.5	—
Adjusted net earnings	124.7	112.3	223.8	193.9

Basic EPS	0.35	0.87	0.81	1.42
Diluted EPS	0.35	0.87	0.81	1.41
Adjusted diluted EPS(1)	0.74	0.63	1.33	1.08

Adjusted effective income tax rate is defined as adjusted income tax expense divided by adjusted earnings before income taxes. Adjusted earnings before income taxes excludes restructuring and acquisition-related (recovery) costs, impairment (impairment reversal) of intangible assets, net of write-downs, net insurance gains, gain on sale and leaseback, and costs relating to proxy contest and leadership changes and related matters. Adjusted income tax expense is defined as income tax expense excluding tax rate changes resulting in the revaluation of deferred income tax assets and liabilities, income taxes relating to the re-assessment of the probability of realization of previously recognized or de-recognized deferred income tax assets, and income tax expense relating to restructuring charges and other adjustments. The Company excludes these adjustments because they affect the comparability of its effective income tax rate. The Company believes the adjusted effective income tax rate provides a clearer understanding of our normalized effective tax rate and operating performance for the current period and for purposes of developing its annual financial budgets. The Company believes that adjusted effective income tax rate is useful to investors in assessing the Company's future effective income tax rate as it identifies certain pre-tax expenses and gains and income tax charges and recoveries which are not expected to recur on a regular basis (in particular, non-recurring costs such as proxy contest and leadership changes and related matters incurred in the Company’s Canadian legal entity which do not result in tax recoveries, and tax rate changes resulting in the revaluation of deferred income tax assets and liabilities).


	Three months ended				Six months ended
(in $ millions)	Jun 30, 2024		Jul 2, 2023		Jun 30, 2024		Jul 2, 2023

Earnings before income taxes	116.9		162.0		199.3		273.0
Adjustments for:
Restructuring and acquisition-related (recovery) costs	(2.9)		30.0		(2.1)		32.8
Net insurance gains	—		(74.0)		—		(77.3)
Gain on sale and leaseback	—		—		—		(25.0)
Costs relating to proxy contest and leadership changes and related matters	57.2		—		76.8		—
Adjusted earnings before income taxes	171.2		118.0		274.0		203.5

Income tax expense	58.5		6.7		62.2		20.1
Adjustments for:
Income tax expense relating to restructuring charges and other adjustments above	(0.5)		(1.0)		(0.5)		(10.5)
Tax rate changes resulting in the revaluation of deferred income tax assets and liabilities	(11.5)		—		(11.5)		—
Adjusted income tax expense	46.5		5.7		50.2		9.6
Average effective income tax rate(1)	50.1	%	4.1	%	31.2	%	7.4	%
Adjusted effective income tax rate(2)	27.2	%	4.8	%	18.3	%	4.7	%

Adjusted gross profit is calculated as gross profit excluding the impact of net insurance gains in fiscal 2023. The Company uses adjusted gross profit and adjusted gross margin to measure its performance at the gross margin level from one period to the next, without the variation caused by the impacts of the item described above. The Company excludes this item because it affects the comparability of its financial results and could potentially distort the analysis of trends in its business performance. Excluding this item does not imply that it is non-recurring. The Company believes adjusted gross profit and adjusted gross margin are useful to management and investors because they help identify underlying trends in our business in how efficiently the Company uses labor and materials for manufacturing goods to our customers that could otherwise be masked by the impact of net insurance gains in prior years. These measures do not have any standardized meanings prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies.

Adjusted SG&A expenses is calculated as selling, general and administrative expenses excluding the impact of costs relating to proxy contest and leadership changes and related matters. The Company uses adjusted SG&A expenses and adjusted SG&A expenses as a percentage of net sales to measure its performance from one period to the next, without the variation caused by the impact of the items described above. Excluding these items does not imply they are non-recurring. The Company believes adjusted SG&A expenses and adjusted SG&A expenses as a percentage of net sales are useful to investors because they help identify underlying trends in our business that could otherwise be masked by certain expenses and write-offs that can vary from period to period. These measures do not have any standardized meanings prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies.

Adjusted operating income is calculated as operating income before restructuring and acquisition-related costs, and also excludes impairment (impairment reversal) of intangible assets, net insurance gains, gain on sale and leaseback, and costs relating to proxy contest and leadership changes and related matters. Management uses adjusted operating income and adjusted operating margin to measure its performance at the operating income level as we believe it provides a better indication of our operating performance and facilitates the comparison across reporting periods, without the variation caused by the impacts of the items described above. The Company excludes these items because they affect the comparability of its financial results and could potentially distort the analysis of trends in its operating income and operating margin performance. The Company believes adjusted operating income and adjusted operating margin are useful to investors because they help identify underlying trends in our business in how efficiently the Company generates profit from its primary operations that could otherwise be masked by the impact of the items noted above that can vary from period to period. Excluding these items does not imply they are non-recurring. These measures do not have any standardized meanings prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies.

Adjusted EBITDA is calculated as earnings before financial expenses net, income taxes, and depreciation and amortization, and excludes the impact of restructuring and acquisition-related costs. Adjusted EBITDA also excludes impairment (impairment reversal) of intangible assets, net insurance gains, the gain on sale and leaseback, and costs relating to proxy contest and leadership changes and related matters. Management uses adjusted EBITDA, among other measures, to facilitate a comparison of the profitability of its business on a consistent basis from period-to-period and to provide a more complete understanding of factors and trends affecting our business. The Company also believes this measure is commonly used by investors and analysts to assess profitability and the cost structure of companies within the industry, as well as measure a company’s ability to service debt and to meet other payment obligations, or as a common valuation measurement. The Company excludes depreciation and amortization expenses, which are non-cash in nature and can vary significantly depending upon accounting methods or non-operating factors. Excluding these items does not imply they are non-recurring. This measure does not have any standardized meanings prescribed by IFRS and is therefore unlikely to be comparable to similar measures presented by other companies.

Free cash flow is defined as cash flow from operating activities, less cash flow used in investing activities excluding cash flows relating to business acquisitions. The Company considers free cash flow to be an important indicator of the financial strength and liquidity of its business, and it is a key metric used by management in managing capital as it indicates how much cash is available after capital expenditures to repay debt, to pursue business acquisitions, and/or to redistribute to its shareholders. Management believes that free cash flow also provides investors with an important perspective on the cash available to us to service debt, fund acquisitions, and pay dividends. In addition, free cash flow is commonly used by investors and analysts when valuing a business and its underlying assets. This measure does not have any standardized meanings prescribed by IFRS and is therefore unlikely to be comparable to similar measures presented by other companies.

The net debt leverage ratio is defined as the ratio of net debt to pro-forma adjusted EBITDA for the trailing twelve months, all of which are non-GAAP measures. The pro-forma adjusted EBITDA for the trailing twelve months reflects business acquisitions made during the period, as if they had occurred at the beginning of the trailing twelve month period. The Company has currently set a net debt leverage target ratio of 1.5 to 2.5 times pro-forma adjusted EBITDA for the trailing twelve months (previously 1.5 to 2.0 times). The net debt leverage ratio serves to evaluate the Company's financial leverage and is used by management in its decisions on the Company's capital structure, including financing strategy. The Company believes that certain investors and analysts use the net debt leverage ratio to measure the financial leverage of the Company, including our ability to pay off our incurred debt. The Company's net debt leverage ratio differs from the net debt to EBITDA ratio that is a covenant in our loan and note agreements, and therefore the Company believes it is a useful additional measure. This measure does not have any standardized meanings prescribed by IFRS and is therefore unlikely to be comparable to similar measures presented by other companies.

Working capital is a non-GAAP financial measure and is defined as current assets less current liabilities. Management believes that working capital, in addition to other conventional financial measures prepared in accordance with IFRS, provides information that is helpful to understand the financial condition of the Company. The objective of using working capital is to present readers with a view of the Company from management’s perspective by interpreting the material trends and activities that affect the short-term liquidity and financial position of the Company, including its ability to discharge its short-term liabilities as they come due. This measure is not comparable to similarly titled measures used by other public companies.


	GILDAN ACTIVEWEAR INC.
Date: August 1, 2024	By:	/s/ Michelle Taylor
		Name:	Michelle Taylor
		Title:	Vice-President, General Counsel and Corporate Secretary


Exhibit						Description of Exhibit

99.1						Management's Discussion and Analysis
99.2						Interim Financial Statements
99.3						Certifications of Interim Filings - CEO
99.4						Certifications of Interim Filings - CFO


For the three months ended (in $ millions, except share and per share amounts or otherwise indicated)	Q2 2024	Q1 2024	Q4 2023	Q3 2023	Q2 2023	Q1 2023	Q4 2022	Q3 2022

Net sales	862.2	695.8	782.7	869.9	840.4	702.9	720.0	850.0
Net earnings	58.4	78.7	153.3	127.4	155.3	97.6	83.9	153.0
Net earnings per share:
Basic(1)	0.35	0.47	0.89	0.73	0.87	0.54	0.47	0.84
Diluted(1)	0.35	0.47	0.89	0.73	0.87	0.54	0.47	0.84
Weighted average number of shares outstanding (in ‘000s):
Basic	168,005	168,869	171,495	175,087	177,624	179,543	179,680	181,980
Diluted	168,139	168,977	171,806	175,348	177,902	179,843	179,897	182,239


	Jun 30, 2024	Dec 31, 2023	Variation
			$	%
Total assets	3,739.3	3,514.9	224.4	6.4	%
Total non-current financial liabilities	919.0	685.0	234.0	34.2	%
Net debt(1)	1,238.3	993.4	244.9	24.7	%

Quarterly cash dividend declared per common share	0.205	0.186	0.019	10.2	%
Net debt leverage ratio(1)	1.6	1.5	n/a	n/a


(in $ millions)	Jun 30, 2024	Dec 31, 2023	Variation

Cash and cash equivalents	90.3	89.6	0.7
Trade accounts receivable	599.0	412.5	186.5

Inventories	1,110.4	1,089.4	21.0
Prepaid expenses, deposits and other current assets	78.3	96.0	(17.7)
Assets held for sale	7.2	—	7.2
Accounts payable and accrued liabilities	(463.8)	(408.3)	(55.5)
Income tax payable	(21.0)	(1.6)	(19.4)
Current portion of lease obligations	(16.3)	(14.2)	(2.1)

Current portion of long-term debt	(300.0)	(300.0)	—

Total working capital(1)	1,084.1	963.4	120.7


Current ratio(2)	2.4	2.3	n.m.


For the month of: August 2024						Commission File Number: 1-14830


SEC 1815 (04-09)			Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.


(in $ millions)	Property, plant and equipment	Right-of-use assets	Intangible assets	Goodwill

Balance, December 31, 2023	1,174.5	81.4	261.4	271.7
Additions	80.5	16.7	2.4	—


Depreciation and amortization	(56.1)	(7.2)	(7.0)	—
Net carrying amounts of disposals and write-downs	(8.1)	(6.1)	—	—
Balance, June 30, 2024	1,190.8	84.8	256.8	271.7


(in $ millions)	Carrying amount	Contractual cash flows	Less than 1 year	1 to 3 years	4 to 5 years	More than 5 years

Accounts payable and accrued liabilities	463.8	463.8	463.8	—	—	—
Long-term debt	1,219.0	1,219.0	300.0	919.0	—	—
Interest obligations(1)	—	154.5	72.7	81.8	—	—
Purchase and other obligations(2)	—	590.5	398.1	136.0	56.4	—
Lease obligations	109.6	133.7	23.0	40.5	24.5	45.7
Total contractual obligations	1,792.4	2,561.5	1,257.6	1,177.3	80.9	45.7


	June 30, 2024		December 31, 2023
Current assets:
Cash and cash equivalents	$	90,277	$	89,642
Trade accounts receivable (note 4)	599,040		412,498

Inventories (note 5)	1,110,430		1,089,441
Prepaid expenses, deposits and other current assets	78,342		95,955
Assets held for sale	7,231		—
Total current assets	1,885,320		1,687,536
Non-current assets:
Property, plant and equipment	1,190,792		1,174,515
Right-of-use assets	84,815		81,447
Intangible assets	256,830		261,419
Goodwill	271,677		271,677
Deferred income taxes	21,704		23,971
Other non-current assets	28,136		14,308
Total non-current assets	1,853,954		1,827,337
Total assets	$	3,739,274	$	3,514,873
Current liabilities:
Accounts payable and accrued liabilities	$	463,755	$	408,294
Income taxes payable	20,992		1,635
Current portion of lease obligations (note 8(d))	16,261		14,161


Current portion of long-term debt (note 6)	300,000		300,000
Total current liabilities	801,008		724,090
Non-current liabilities:
Long-term debt (note 6)	919,000		685,000
Lease obligations (note 8(d))	93,319		83,900
Deferred income taxes	28,876		18,118
Other non-current liabilities	44,727		46,308
Total non-current liabilities	1,085,922		833,326
Total liabilities	1,886,930		1,557,416
Equity:
Share capital	275,233		271,213
Contributed surplus	67,233		61,363
Retained earnings	1,504,557		1,611,231
Accumulated other comprehensive income (note 10)	5,321		13,650
Total equity attributable to shareholders of the Company	1,852,344		1,957,457
Total liabilities and equity	$	3,739,274	$	3,514,873


	Share capital			Contributed surplus		Accumulated other comprehensive income			Retained earnings		Total equity
	Number	Amount
Balance, December 31, 2023	169,986	$	271,213	$	61,363		$	13,650	$	1,611,231	$	1,957,457
Share-based compensation	—	—		40,788			—		—		40,788
Shares issued under employee share purchase plan	24	827		—			—		—		827
Shares issued pursuant to exercise of stock options	29	976		(143)			—		—		833
Shares issued or distributed pursuant to vesting of restricted share units and SARs	394	10,287		(18,456)			—		—		(8,169)

Shares repurchased for cancellation	(4,531)	(7,414)		—			—		(160,909)		(168,323)
Share repurchases for settlement of non-Treasury RSUs	(410)	(656)		—			—		(13,207)		(13,863)
Change from equity-settled to cash-settled arising from change in settlement	—	—		(15,396)			—		—		(15,396)
Payout of employee portion of deferred compensation	—	—		(1,333)			—		—		(1,333)
Dividends declared	—	—		410			—		(69,631)		(69,221)
Transactions with shareholders of the Company recognized directly in equity	(4,494)	4,020		5,870			—		(243,747)		(233,857)
Cash flow hedges (note 10)	—	—		—			(8,329)		—		(8,329)

Net earnings	—	—		—			—		137,073		137,073
Comprehensive income	—	—		—			(8,329)		137,073		128,744
Balance, June 30, 2024	165,492	$	275,233	$	67,233		$	5,321	$	1,504,557	$	1,852,344
Balance, January 1, 2023	179,709	$	202,329	$	79,489		$	9,845	$	1,590,499	$	1,882,162
Share-based compensation	—	—		16,018			—		—		16,018
Shares issued under employee share purchase plan	27	806		—			—		—		806
Shares issued pursuant to exercise of stock options	218	6,250		(846)			—		—		5,404
Shares issued or distributed pursuant to vesting of restricted share units and SARs	648	14,429		(29,807)			—		—		(15,378)

Shares repurchased for cancellation	(3,553)	(4,296)		—			—		(105,993)		(110,289)
Share repurchases for settlement of non-Treasury RSUs	(648)	(550)		—			—		(19,005)		(19,555)
Deferred compensation to be settled in non-Treasury RSUs	—	—		2,075			—		—		2,075
Dividends declared	—	—		868			—		(68,107)		(67,239)
Transactions with shareholders of the Company recognized directly in equity	(3,308)	16,639		(11,692)			—		(193,105)		(188,158)
Cash flow hedges (note 10)	—	—		—			6,847		—		6,847

Net earnings	—	—		—			—		252,905		252,905
Comprehensive income	—	—		—			6,847		252,905		259,752
Balance, July 2, 2023	176,401	$	218,968	$	67,797		$	16,692	$	1,650,299	$	1,953,756


			NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


	June 30, 2024		December 31, 2023
Raw materials and spare parts inventories	$	188,423	$	165,527
Work in progress	79,501		57,938
Finished goods	842,506		865,976
	$	1,110,430	$	1,089,441


	June 30, 2024		December 31, 2023
Current	$	16,261	$	14,161
Non-current	93,319		83,900
	$	109,580	$	98,061


	June 30, 2024
Less than one year	$	23,013
One to five years	64,971
More than five years	45,665
	$	133,649


Form 20-F o						Form 40-F þ


			MANAGEMENT'S DISCUSSION AND ANALYSIS


			MANAGEMENT'S DISCUSSION AND ANALYSIS


			MANAGEMENT'S DISCUSSION AND ANALYSIS


		Number	Weighted average fair value per unit

Non-Treasury RSUs outstanding, December 31, 2023		1,516		$	33.26
Changes in outstanding non-Treasury RSUs:
	Granted(1)	571		37.32
	Additional units for vested performance conditions	486		30.73
	Granted for dividends declared	10		35.74
	Settled - common shares	(383)		30.49
	Settled - payment of withholding taxes	(225)		30.49
	Forfeited	(24)		34.27
	Settled in cash for outgoing executives	(82)		35.10
	Reinstated awards for President & CEO	439		37.92
Non-Treasury RSUs outstanding, June 30, 2024		2,308		$	35.28


	June 30, 2024		December 31, 2023
Financial assets
Amortized cost:
Cash and cash equivalents	$	90,277	$	89,642
Trade accounts receivable	599,040		412,498
Financial assets included in prepaid expenses, deposits and other current assets	39,263		45,136
Long-term non-trade receivables included in other non-current assets	27,822		12,863
Fair value through other comprehensive income:
Derivative financial assets included in prepaid expenses, deposits and other current assets	12,259		15,797

Financial liabilities
Amortized cost:
Accounts payable and accrued liabilities(1)	$	461,480	$	403,534

Long-term debt - bearing interest at variable rates	1,119,000		885,000
Long-term debt - bearing interest at fixed rates(2)	100,000		100,000
Fair value through other comprehensive income:
Derivative financial liabilities included in accounts payable and accrued liabilities	2,275		4,760