Gildan Activewear Inc. ($GIL)

Good afternoon, and welcome to Gildan Activewear Annual Meeting of Shareholders. My name is Michael Kneeland, and I am the Chair of the Board of Directors of Gildan. Seated with me today is Glenn Chamandy, President and Chief Executive Officer; Luca Bareli, Chief Financial Officer; and Rob Asa, Chief Legal and Administrative Officer and Corporate Secretary. I would like to also introduce the other directors who are here today present today. Michel, I mean Mitchener -- can Lee in the back and Laura Decor. We also have Gusan Hou, Melanie Kao, who's not here, but she is on the virtual Depakandelwall, Peter Lee and Karen Stocky. We also have the following members of management President, Chuck Ward, Benito Masi and Jason Dahan. This year, again, meeting with a hybrid format, allowing both in-person and virtual participation, allowing for everyone to participate. We believe this allows for both direct communication with shareholders while providing a valuable opportunity for our internationally based shareholders to engage with Gildan without the need for travel. We will begin by conducting the official business of the meeting. After the official business is completed, Glenn Chamandy and Luca Burelle will address shareholders and provide an overall business and financial update. After that, we will answer any questions submitted during the meeting. I will now ask the Corporate Secretary, Rob Asa, to take us through the certain procedures for conduct of this meeting.

[Foreign Language]. We also wanted to go over a few items to ensure the orderly conduct of the meeting. Please note that today's meeting is being recorded. If you participate in today's meeting and disclose personal information, you will be deemed to consent to the recording transfer and use of this information. If you disclose personal information of another person in today's meeting, you will be deemed to represent and warrant that you first obtained all required consents for the disclosure recording, transfer and use of such personal information. Once voting has opened, the voting tab will appear on the navigation bar at the top of your screen. The resolutions and voting choices will then be displayed. After you vote, a message confirming votes received will appear. Your vote can be changed at any time until polls are closed by simply clicking the other option. If you wish to cancel your vote, please press cancel. Only registered holders of common shares of record as of March 17, 2026 and duly appointed proxy holders are permitted to participate, ask questions and vote at this meeting. Registered shareholders and duly appointed proxy holders who have already voted online or submitted proxies in advance of today's meeting are not required to vote again unless they wish to change their vote. Questions will only be addressed during the question period at the end of the meeting. When asking a question in person, we would ask that you please indicate your name, the entity you represent, if any, and confirm that you are a registered shareholder or a duly appointed proxy holder. Questions may also be submitted using the instant messaging service on the virtual meeting platform provided that you have logged into the platform as a registered shareholder or a duly appointed proxy holder. Questions submitted during the meeting via the online platform will be moderated before being sent to the chair. Questions or comments containing inappropriate language, or that are otherwise disruptive to the orderly conduct of the meeting for all shareholders will not be answered. Questions which were already answered or that are redundant or repetitive will not be answered.

Thank you, Rob. The meeting is now called to order. In accordance with the bylaws of the corporation, I will preside as Chair of this meeting, and I hereby appoint Rob Basal to act as Secretary for the meeting. I now appoint Martin Gardier and Charles Muslim of Computershare Investor Services as scrutineers to report on the number of common shares represented in person and by proxy at this meeting and to report the voting results. I have received a sworn, a declaration prepared by computers, they are indicating that the notice calling this meeting and the accompanying materials were duly mailed and delivered to registered shareholders and to intermediaries. Accordingly, I propose to dispense with the reading of the notice, and I direct that a copy of the notice and proof of service be kept by the Secretary with records of this meeting. The scrutineers will provide me with their report on attendance at the meeting, and it shows that there is a quorum has been reached. I direct that a copy of the scrutineers' report be kept by the Secretary with the records of this meeting. I now declare the meeting regularly constituted for the transaction for business. I would now ask the Secretary of the meeting to take us through certain voting procedures for this meeting.

Thank you. In addition to receiving the annual consolidated financial statements today, shareholders will vote on items as described in our management information circular. These are the appointment of the auditors, the election of the directors, the adoption, ratification and renewal of our shareholder rights plan and a nonbinding advisory resolution on the company's approach to executive compensation. In order to facilitate the timely completion of the formal business of today's meeting, we have arranged for certain shareholders to move and second the various motions. Registered shareholders and duly appointed proxy holders will be asked to vote on each item of business after each item is presented. Approval of all items of business brought before the meeting will require an affirmative vote of a majority of the votes cast by shareholders. Voting tablets for the items of business were distributed to registered shareholders who had not previously voted by proxy and to duly appointed proxy holders as they arrived at today's meeting. If you did not receive any voting tablets, but think you should have, please raise your hand and a representative of Computershare Investor Services, will attend to you. If you are a shareholder who holds shares through a broker and you submitted a form of proxy or voting information form prior to the deadline, your vote has already been counted. For registered shareholders and duly appointed proxy holders attending the meeting virtually, you will receive a message on the virtual meeting platform, advising you that the polls are open. You will only have a certain amount of time to cast your vote.

Thank you, Rob. I now present to the meeting the consolidated financial statements of the company for the fiscal year ending December 28, 2025, and the auditor's report thereon. Copies of such documents have been made available through notice and access to our shareholders. Having done so, I now declare that the audited financial statements of the company for the year ending December 28, 2025, together with the report of the auditors thereon have been presented and received. The next item of business is the appointment of KPMG LLP as the company's auditors and that the Board of Gildan be authorized to fix the remuneration of the auditors as recommended by the Audit and Finance Committee, I ask for a motion and a seconder.

My name is Sabrina share. I am a shareholder and a proxy holder. I move that KPMG LLP be appointed as the company's auditors and that the Board of Directors of the company be authorized to fix the remuneration of the auditors.

My name is Suzanne Adams. I'm a shareholder and a proxy holder, and I second the motion. .

Thank you. I now direct that a vote be taken on the appointment of KPMG as the company auditors -- if you did not vote already on the site and please do so. In the interest of expediency, we will proceed with the business of the meeting and announce the voting results for all items of business at the end of the meeting. We will now proceed with the election of the directors. The Board has determined that persons should be elected as directors of the company and has proposed 9 candidates to hold such office for the ensuing year. 8 of whom are independent. In addition to Glenn Chamandy and myself, 7 highly qualified individuals are being proposed for election as directors. Their biographies are included in the company's management information circular made available to our shareholders. The directors will be voted on individually rather than as a slate. Each of the nominees has expressed a desire to serve as a director for the company -- of the company. I nominate each of the following persons for election as a Director of the company to hold office until the close of the next Annual Meeting of Shareholders or until his or her successors are duly elected or appointed. The nominees are Glenn Chamandy, Miner Chanel, Ann Law Decor, Jizan Hu, Melanie Cool, DepakKandewall, Peter Lee, Karen Stuckey and myself, Michael Nieland. I ask for a motion in a seconder for the nomination of the Gildan Director nominees.

My name is Ariana Lisio. I am a shareholder and a proxy holder, and I move that each of the following persons be nominated for election as a Director of the company to hold office until the next -- the close of the next annual meeting of the shareholders or until their successors are duly elected or appointed. Domini are Michael Nieland, Glenn Chamandy; Michener Shane and Lar Decor, Gisle U Milene Co, Deepak, Candela, Peter Lee and Karen Stucki.

My name is Vince Parafora. I'm a shareholder and a proxy holder. I second the motion.

Thank you. If you did not vote already on this item, please do so. I will now turn to the item on the agenda relating to the resolution to confirm the adoption, ratification and renewal of the company's shareholder rights plan as set forth in the management information circular. On February 25, 2026, the Board adopted a shareholder rights plan and subsequently entered into a shareholder rights plan agreement with Computershare Investor Services. The shareholder rights plan is designed to ensure that all shareholders are treated fairly in connection with any takeover bid or other acquisition of control of the company. It replaces and renews the company's existing shareholder rights plan, which expires today. The shareholder rights plan is the same as the company's existing shareholder rights plan, except that it includes minor amendments to the administrative nature. The shareholder rights plan will come into force at the close of business today, provided that the resolution to confirm the adoption renewal and ratification of the shareholder rights plan is approved by a majority of votes cast by the shareholders who vote in respect to the resolution. The full text of the resolution is reproduced on Page 10 of the management information circular and the full text of the shareholder rights plan is available on SEDAR and EDGAR and the company website. I ask for a motion and a second year.

My name is Annie, I'm a shareholder and proxy holder. I move that the resolution confirming the adoption renewal and ratification of the company's shareholder right plan set forth in the management circular information circular be adopted. .

My name is Sabrina Tessera. I am a shareholder and proxy holder. I second the motion.

Well, thank you. If you did not vote already on this item, please do so. The next item of business is the advisory vote on the company's approach to executive compensation is set forth in the management information circular. The full text of the advisory resolution is reproduced on Page 12 of the Management Information Circular. The results of the Say-on-Pay vote will not be binding on the Board. However, the Board will take into account the results together with the other comments we receive from shareholders when we consider the company's approach to executive compensation in the future. We are committed to continuing to engage directly with shareholders on this important topic. So I ask for a motion and a seconder.

My name is Suzanne Adams. I'm a shareholder and a proxy holder. I move that the resolution on the advisory vote on executive compensation set forth in the Management Information Circular be adopted. .

My name is Ariana Lisio. I am a shareholder and a proxy holder. I second the motion.

Thank you. If you did not vote already on the item, please do so. That concludes the matters of business properly brought at this meeting. We will have a brief adjournment while we wait for the scrutineer's report. Scrutineers' report on the voting results and confirm the following: -- regarding the election of directors, I am pleased to announce that Glenn Chamandy, Mr. Chaney, and La Decor, Jizan Hull, Melanie Co, Depot Kandwal, Peter Lee, Karen Stuckey and I, Michael Nieland have been duly elected directors of the company. I'm also pleased to report that the advisory resolution on the company's approach to executive compensation and the resolution for appointment of KPMG LLP and for the adoption, ratification and renewal of the shareholder rights plan have all been carried. Detailed results of each vote will be available shortly on SEDAR and EDGAR and Gildan websites. This completes the business on the agenda for the annual meeting. And before we move to our business and financial update and on the question period, I ask for a motion, a seconder to terminate the formal part of this meeting.

My name is Vince Parafora. I am a shareholder and a proxy holder. I move to terminate the meeting.

My name is Annie, I'm a shareholder and proxy holder, and I second the motion.

I declare the formal part of the annual meeting now terminated. Now before the question and period starts, Glenn Chamandy and Luca Bareli would like to say a few words.

Thank you, Michael, and good afternoon, everybody, and thanks for joining us today. I will present our achievements for 2025, and Luca will go through our financial performance to '25 and review the first quarter results that we just released today. First slide, please. 2025 was another great year for Gildan. We generated over 35% total shareholder returns. And we achieved some historical milestones in '25, which -- we'll continue to deliver what we believe in the long-term success and growth for the company. I'd like to take a moment and thank all our employees for their hard work and dedication. And I'd also like to thank our customers and our shareholders for their support. Next slide, please. In 2025, we had record sales of $3.6 billion, up 11% versus '24 million. We announced the acquisition of Hanesbrands in August of 2025. And we actually closed the transaction soon after in December 1, 2025. The acquisition is a historical moment for Gildan as it, we believe, will unlock a powerful engine of growth and innovation for future years to come. We financed the acquisition with both debt and stock and debt, sorry. And we issued a senior unsecured note for roughly USD roughly EUR 1.2 billion as part of the financing. The next page, please. We continue to deliver on our -- all 3 pillars of our Gildan sustainable growth strategy. We strengthened our manufacturing competitive advantage by modernizing of our U.S. yarn facilities, the ramp-up of our first phase of our Bangladesh, we optimize all of the company's capacity and increased it to support the integration of Haynes. And we continue to bring new innovation to the market with our soft cotton technology, our plasma print. And finally, we strengthened our sustainability practice by delivering on all our initiatives for 2025. Next slide, please. The Hanes acquisition has meaningfully increased the company's scale, customer reach is widen our product portfolio and has increased our overall addressable market and future growth opportunities. The combination of Hanes and Gildan make kill down today 1 of the largest global apparel players by units sold. Next page, please. and product categories. Approximately 50% of our revenues will now be in the wholesale market. 50% of our revenues will be in retail. And approximately 50% of our products will be in the Activer segment and 50% will be in anywhere. And no 1 customer is greater than 20% of our Review. So we're well diversified. Next slide, please. We've got a large portfolio of brands for both the wholesale market and the retail market, and as well as for innerwear type products and active wear type products. And we're also supported by third-party brands or licenses to expand in areas and to reach other opportunities where our brands cannot. Next page, please. Sustainability has been a long has been long term underpinned by our vertically integrated low-cost manufacturing. We're proud of our 20-year loan track record and we're progressing well towards our goals of 30-30 and our GSG emission targets. Next slide, please. We remain [Audio Gap] EPS growth in the low 20% range a CapEx between 3% and 4% of sales and bringing our leverage framework into line with between 1.5 and 2.5x leverage to EBITDA. So we're pleased so far with the start of 2026, our discipline and execution across the organization, and we're looking forward for another exciting year, and we remain committed to delivering long-term shareholder value. And with that, I'll pass it over to Luca to review our financial performance.

Okay. Thank you, Glenn, and good afternoon, everyone. So I'll provide a recap of our 2025 financial performance. A brief summary of the results we reported this morning for the first quarter of 2026, and as well as the full year outlook. And then we'll conclude with a few comments before turning it back over to Michael. So first slide, please. So starting with 2025. I fully echo Glen's view that it was a strong year. If we start at the top left-hand side of the page, you can see that net sales from continuing operations came in at $3.6 billion, up 11% over 2024. Excluding the 1-month contribution from Haynes brands, our sales growth was in line with our guidance of mid-single-digit growth. We believe our top line performance demonstrated resilience in a fluid environment in the context of geopolitical tensions and a dynamic global trade environment throughout most of the year. If we move to the upper right-hand side of the slide, the chart highlights that in parallel with record sales, we're also able to deliver strong margins in 2025 with our operating margin coming in around 17%, and our adjusted operating margin at 21.5%. Excluding Hanesbrands, our adjusted operating margin was roughly in line with the guidance we provided, which called for an increase of approximately 70 basis points year-over-year. Turning to the bottom section of the slide, you can see that strong sales and margins translated into strong diluted and adjusted diluted EPS from continuing operations of $2.57 and $3.51, respectively. So finally, our strong operating performance yielded continued robust free cash flow generation of $493 million for the year. Overall, we delivered strong results for the full year, all while navigating a complex global macroeconomic environment. Next slide, please. Okay. So turning to capital allocation. In 2025, total capital return to shareholders was $319 million, including dividends paid of approximately $135 million and by repurchasing approximately 3.8 million shares under our NCIB program. While having been consistently active with our share buybacks, we paused our repurchases upon announcing the Hanesbrands acquisition. Until our net debt leverage ratio moves back to the midpoint of our targeted leverage framework of 1.5 to 2.5x net debt to adjusted EBITDA. On a cumulative basis, over the past 5 years, we returned over $2.6 billion in capital, reflecting our sustained commitment to shareholder return. In fact, over the past decade, up to the acquisition announcement, we had repurchased approximately 40% of our issued and outstanding shares. With regards to capital expenditures, we delivered on the investments we committed to with a clear focus on the key pillars of our strategy. Capex moderate closer to the normalized range of approximately 3% of net sales as we completed the ramp-up of our new state-of-the-art facility in Bangladesh. As Glenn highlighted, these important investments in our vertical integration and capacity, reinforce our competitive advantage and position us well for future growth. Finally, maintaining a healthy balance sheet remains central to our financial discipline. As a result of the acquisition of Hanesbrands, we ended 2025 with a leverage ratio of 3x. Proceeds from the potential divestment of Hanesbrands Australia, which would be used to pay down a portion of the company's outstanding debt should further accelerate our objective to return to our leverage framework of 1.5 to 2.5x. And in terms of our strategic priorities, investing in CapEx to drive organic growth and return capital to shareholders through both dividends and share buybacks remain the core focus of our capital allocation strategy. Next slide, please. Okay. So turning to 2026. This slide summarizes our Q1 results, which we reported this morning. Overall, we were very pleased with our performance. The quarter unfolded largely as we anticipated, with sales of nearly $1.2 billion, up 64% year-over-year, in line with the guidance that we had provided. This was reflecting the acquisition of Haynes brands, growth in key product categories but partly offset by our proactive inventory reduction across our combined customer channels to accelerate synergy capture, which temporarily reduced sell-in as previously communicated. Our operating margin came in approximately flat. Our adjusted operating margin was 14.3%, down 470 basis points year-over-year but ahead of guidance for the quarter. We reported GAAP diluted loss per share of $0.30, whereas adjusted diluted EPS came in at $0.43 compared to $0.59 in the prior year. Overall, the quarter was in line with our expectations. And with that, now let's turn to strategy and outlook. Next slide, please. All right. So turning to the outlook. In our press release issued this morning, we maintained our guidance for 2026, the broader operating environment remains uncertain, and we feel cautiously optimistic about the remainder of 2026, while being mindful of the Middle East conflict and the heightened concerns to the end consumer. Nonetheless, we are focused on what we can control. We believe that our low-cost vertically integrated business model and the agility it provides, together with strong industry positioning provide a solid foundation for us to navigate the evolving external conditions and support continued financial performance. Therefore, for 2026, with respect to our continuing operations, our guidance is maintained as follows: we expect revenue from continuing operations of $6 billion to $6.2 billion. Full year adjusted operating margin is expected to be approximately 20%. We continue to expect adjusted diluted earnings per share in the range of $4.20 to $4.40. That's up between 20% and 25% year-over-year. And finally, we also expect free cash flow to be above $850 million in 2026 with CapEx projected at approximately 3% of net sales. So in summary, we are pleased with the quarter and our progress thus far regarding the integration of Hanesbrands. So this concludes my prepared remarks. And with that, I'll turn it over to Michael.

Well, thank you, Glenn, and Luca. Before concluding this meeting, we would be pleased to answer questions from any registered shareholder or duly appointed proxy holder who wishes to address the meeting. When asking a question, we would ask you please indicate your name and you represent, if I need to confirm that you are a registered shareholder or a duly appointed proxy holder, please limit your questions to topics related to today's subject matter and keep your questions short and to the point. I would like to remind you that the questions which were already answered or that are redundant or repetitive will not be answered again. So -- the termination and strength in making Gildan the leader it is today. On behalf of the Board and the management team, I want to thank our shareholders for their confidence and support. I will now declare the meeting terminated. Thank you.