Mr. Vince Tyra reports

GILDAN ACTIVEWEAR REPORTS STRONG FOURTH QUARTER RESULTS AND INITIATES GUIDANCE FOR 2024

Gildan Activewear Inc. has released results for the fourth quarter and year ended Dec. 31, 2023, and initiated annual guidance for 2024. In addition, the Company announced a dividend increase of 10 per cent for 2024.

Highlights: (all amounts are in U.S. dollars except where otherwise indicated)

• Net sales of $783 million in the fourth quarter, up 9 per cent versus Q4 2022
• Q4 operating margin of 22.8 per cent, adjusted operating margin1 of 19.7 per cent
• Q4 diluted EPS of $0.89 up 89 per cent and adjusted diluted EPS1 of $0.75 up 15 per cent versus Q4 2022
• Cash flow from operations of $239 million in Q4 and $547 million for the full year; free cash flow1 of $203 million in Q4 and $392 million for the full year
• Capital returned to shareholders of $204 million in Q4 and $492 million for the full year, through dividends and share repurchases
• Company announces 10 per cent dividend increase for 2024
• Company initiates 2024 annual guidance

Overall, despite a challenging macro-economic backdrop and tough year over year comparative periods, 2023 was a year of strong progress on Gildan's Sustainable Growth strategy and its three key pillars focused on innovation, manufacturing capacity and ESG. Gildan finished the year with strong sales growth in the fourth quarter, an adjusted operating margin1 at the high end of the Company's target range and a return to growth in EPS. In addition, 2023 cash flow generation was robust and we closed the year with a healthy balance sheet, all of which positions us well for 2024.

"Outstanding operational execution by our highly skilled team of employees across our global footprint delivered strong Q4 results" said Vince Tyra, President and CEO. "As the Company celebrates its 40th anniversary this year, I see a bright future ahead, where we can leverage our strengths and continue to enhance value for all stakeholders. Since joining the Company, I've had the opportunity to visit with hundreds of employees in Montreal and Honduras and I've met with many of our key customers during the recent industry trade shows in Las Vegas, Nevada and Long Beach, California, which fueled my excitement for the future."

We generated sales for the fourth quarter of $783 million, up 9 per cent over the prior year, and operating margins of 22.8 per cent. We delivered strong adjusted gross margin1 and adjusted SG&A1 performance, which together drove adjusted operating margin of 19.7 per cent, up 90 basis points versus last year. These results yielded GAAP and adjusted diluted EPS1 of $0.89 and $0.75, up 89 per cent and 15 per cent respectively year over year, marking the resumption of our quarterly EPS growth. Cash flow from operating activities increased to $239 million, up $50 million, mainly driven by a normalization of inventory levels at year end compared to last year, bringing full year cash from operating activities to $547 million. After capital expenditures, we generated free cash flow1 of $203 million and $392 million, slightly below our expectations for the fourth quarter and the full year respectively. In the fourth quarter, we repurchased 5.4 million shares under our normal course issuer bid (NCIB) program at a total cost of approximately $173 million, bringing our total repurchases for the year close to 7 per cent of our public float. Accordingly, the Company returned a total of $492 million of capital to shareholders in 2023 through share repurchases and dividend payments. We ended 2023 with net debt1 of $993 million and a net debt leverage ratio1 of 1.5, well within our targeted debt levels.

Fourth Quarter 2023 Results

Net sales of $783 million for the fourth quarter ending December 31, 2023, were up 9 per cent over the prior year, consisting of Activewear sales of $644 million, up 8 per cent, and sales of $139 million in the Hosiery and underwear category, up 11 per cent. The increase in Activewear sales was due to higher volumes, driven by POS as well as higher levels of customer replenishment than the prior year. POS also reflected strength in key product categories including fleece and ring spun products, which also drove favorable mix. While we saw some POS recovery in International markets, sales were down 24 per cent reflecting continued macro-economic challenges in these markets and the lack of inventory replenishment compared to the prior year. In the Hosiery and underwear category, the increase was mainly due to higher volumes, driven by a combination of better POS and the rollout of new programs in the mass retail channel. Despite continued industry-wide weak demand for men's underwear and socks, we achieved a solid performance in this category.

We generated gross profit of $237 million, or 30.2 per cent of sales, versus $235 million, or 32.6 per cent in the prior year which included an insurance gain of $25.6 million. On an adjusted basis1, gross profit of $237 million, or 30.2 per cent of sales, was up $28 million. The resulting adjusted gross margin improvement of 110 basis points was primarily due to lower raw material costs slightly offset by lower net selling prices. As expected, we saw a sequential improvement of 270 basis points to our adjusted gross margin, as pressure from the flow-through of peak cotton costs subsided significantly in the fourth quarter.

SG&A expenses of $88 million, or 11.3 per cent of sales, were up $15 million compared to last year, reflecting higher volumes, as well as a charge of $6 million related to CEO separation costs and related advisory fees on shareholder matters. Adjusting for this charge, adjusted SG&A expenses as a percentage of sales of 10.5 per cent in the quarter compares to 10.2 per cent last year, as the impact of higher expenses more than offset the benefit of sales leverage.

In the quarter, we incurred restructuring and acquisition-related costs of $11 million, mainly due to the previously announced closure of a yarn-spinning plant in the U.S., compared to $6 million of restructuring and acquisition-related costs in the prior year. Given fiscal 2023 performance and profitability projections related to our hosiery sales, we also recorded a $41 million reversal of prior hosiery-related impairment charges. After reflecting the net impact of these items in both years, operating income of $178 million was up from $93 million last year. On an adjusted basis, operating income1 of $155 million, or 19.7 per cent of sales, compares to $136 million, or 18.8 per cent of sales in the prior year. The increase in adjusted operating income reflected higher sales and higher adjusted gross margin. The 90 basis point improvement in adjusted operating margin was mainly due to the increase in adjusted gross margin.

After reflecting net financial expenses of $21 million, up $8 million over the prior year due to higher interest rates and average net borrowing levels, and the positive benefit of a lower outstanding share base, we reported diluted EPS and adjusted diluted EPS of $0.89 and $0.75, up 89 per cent and 15 per cent respectively, versus diluted EPS and adjusted diluted EPS of $0.47 and $0.65 respectively, in the same quarter last year.

Cash flow from operating activities increased to $239 million in the fourth quarter, and to $547 million for the full year, up respectively $50 million and $133 million from the prior year. Capital expenditures of $208 million for the full year, which included $36 million in the fourth quarter, came in, as expected, closer to the lower end of our target range for 2023. These investments were related to capacity and vertical integration projects, including the construction of our new large-scale, low-cost manufacturing complex in Bangladesh which continues to ramp-up. We generated free cash flow of $203 million in the fourth quarter, bringing the total for the year to $392 million in 2023, up respectively $72 million and $194 million versus the prior year. For both periods, the increase in free cash flow reflected lower working capital investments versus the prior year when the Company brought inventories to higher and more optimal levels, as well as lower capital expenditures. The Company ended 2023 with net debt of $993 million, up from $874 million in 2022 and a net debt leverage ratio of 1.5 times adjusted EBITDA, well within our targeted debt levels.

Full Year 2023 Results

For the year ended December 31, 2023, net sales of $3,196 million were down 1 per cent year over year, as expected, reflecting a decrease of 3 per cent in Activewear sales and a 10 per cent increase in the Hosiery and underwear category. Activewear sales of $2,668 million were down $95 million, primarily due to lower sales volumes compared to the prior year where we saw stronger levels of distributor inventory replenishment, partly offset by slightly higher net selling prices. While overall Activewear POS was soft for the full year, we saw year over year POS trends for this category improve sequentially through the first three quarters of the year before stabilizing in the fourth quarter. International sales of $225 million were down 17 per cent versus the prior year period mainly due to the non-recurrence of prior year restocking in addition to distributors' cautious inventory management throughout the year, in a challenged market. The strong performance in the Hosiery and underwear category, with sales of $528 million, up $50 million, was driven by growth stemming from the expansion of our private label offering and the roll-out of new underwear programs in the mass retail channel, as well as strength in hosiery. Additionally, even though industry-wide demand remained weak for these categories, we benefited from a more favorable demand environment in comparison to 2022, along with the normalization of inventories at retailers.

We realized gross margins of 27.5 per cent, down 310 basis points year over year, which includes the recognition of hurricane insurance recoveries representing 70 basis points. On an adjusted basis, gross margin of 27.4 per cent was down 240 basis points, mainly a result of the flow-through impact of peak fiber costs on our cost of sales earlier in the year and higher manufacturing input costs, as anticipated, partly offset by slightly higher net selling prices.

SG&A expenses were $330 million, or 10.3 per cent as a percentage of net sales, reflecting the impact of CEO separation costs and related advisory fees on shareholder matters, detailed above, and inflation on overall costs, which were mostly offset by the impact of lower volumes, lower variable compensation expenses and the benefit from our cost containment measures. On an adjusted basis, SG&A expenses as percentage of sales came in line with prior year, at 10.1 per cent.

We generated operating income of $644 million or 20.1 per cent of sales, which included the benefit of a $77 million net insurance gain, a $41 million non-cash reversal of a portion of a prior-year hosiery-related impairment charge, and a $25 million gain from the sale and leaseback of one of our U.S. distribution facilities, partly offset by higher restructuring costs of $46 million. Operating income of $603 million in 2022, or 18.6 per cent of sales, included the non-cash impairment charge of $62 million for hosiery, partly offset by an insurance accounting gain of $26 million. On an adjusted basis, we generated operating income of $553 million in 2023, which translated to an adjusted operating margin of 17.3 per cent compared to $639 million and 19.7 per cent respectively last year, mainly reflecting gross margin pressure in the year.

After reflecting net financial expenses of $80 million, up from $37 million last year, our net earnings and adjusted net earnings1 reached $534 million and $453 million respectively, in 2023, down 1 per cent and 21 per cent versus prior year. After reflecting the impact of share repurchases made under the Company's NCIB programs, diluted EPS and adjusted diluted EPS of $3.03 and $2.57, were up 3 per cent and down 17 per cent respectively, versus diluted EPS and adjusted diluted EPS of $2.93 and $3.11 respectively, last year.

Outlook

Over the last year, Gildan has continued to execute on the key components of the Gildan Sustainable Growth strategy. While an industry-wide soft demand environment has meant that revenue growth during this period was challenging to achieve, we have nonetheless continued to drive market share gains in key product categories. This positions us well as we move forward, leveraging our strategy and strong capabilities, and further opportunities in the targeted markets that we serve.

For 2024, we expect the following:

Revenue growth for the full year to be flat to up low-single digits;

Adjusted operating margin slightly above the high end of our 18 per cent to 20 per cent annual target range;

Capex to come in at approximately 5 per cent of sales;

Adjusted diluted EPS in the range of $2.92 to $3.07, up significantly between 13.5 per cent and 19.5 per cent year over year;

Free cash flow above 2023 levels driven by increased profitability, lower working capital investments and lower capital expenditures than in 2023.

The assumptions underpinning our 2024 guidance are as follows: Our outlook assumes that POS trends continue to improve compared to 2023, reflecting potential for recovery in various markets, as well as overall growth opportunities. Our top line guidance also takes into account the expiration of the Under Armour sock license agreement on March 31, 2024, which is expected to have minimal impact on our profitability. Excluding the impact of this agreement, full year revenue growth in 2024 would be in the low to mid-single digit range.

Q1 net sales are expected to be down low single digits year over year, as the impact of higher-than-expected levels of customer replenishment realized in Q4 2023 will result in lower levels of replenishment in Q1 2024. As such, we expect Q1 adjusted operating margin to come in around the low end of our 18 per cent to 20 per cent target range.

Given our strong free cash flow outlook, we assume share repurchases continue in 2024, with our debt leverage ratio maintained within our target range of 1 to 2 times.

Though the timing of the potential enactment of legislation remains uncertain, we have incorporated the estimated impact of the implementation of draft Global Minimum Tax legislation in Canada and Barbados on our effective tax rate, retroactive to January 1, 2024, as well as certain refundable tax credits expected to be introduced in one of the jurisdictions in which we operate, which will reduce our SG&A.

The above outlook assumes no meaningful deterioration from current market conditions including the pricing and inflationary environment. This outlook reflects our expectations as of February 21, 2024 and is subject to significant risks and business uncertainties, including those factors described under "Forward-Looking Statements" in this press release and in our annual MD&A for the year ended December 31, 2023. The board may modify, extend or terminate current or future share repurchase programs at any time.

Environmental, Social and Governance (ESG) Highlights

As previously announced in December 2023, the Company was included on the Dow Jones Sustainability(TM) (DJSI) North America Index for its ongoing efforts towards ESG initiatives, marking its 11th consecutive year of inclusion on the DJSI. More recently, Gildan was also included in the 2024 Sustainability Yearbook for the 12th consecutive year based on S&P Global's Corporate Sustainability Assessment for its demonstrated sustainability practices. Finally, Gildan was also recently included in CDP's leadership band for the fourth time based on its 2023 climate change disclosures.

Increase in Quarterly Dividend

On February 20, 2024 the Board of Directors approved a 10 per cent increase in the amount of the current quarterly dividend and has declared a cash dividend of $0.205 per share, payable on April 8, 2024, to shareholders of record on March 13, 2024. This dividend is an "eligible dividend" for the purposes of the Income Tax Act (Canada) and any other applicable provincial legislation pertaining to eligible dividends.

Normal Course Issuer Bid

Under its current normal course issuer bid ("NCIB") that commenced on August 9, 2023, and will end on August 8, 2024, Gildan is authorized to repurchase for cancellation up to 8,778,638 common shares, representing 5 per cent of Gildan's issued and outstanding shares as of July 31, 2023. The NCIB is conducted by means of purchases through the facilities of the TSX and the NYSE and through alternative Canadian trading systems. During the period from August 9, 2023 to February 20, 2024, Gildan purchased for cancellation a total of 8,571,018 common shares, representing 4.9 per cent of the Company's issued and outstanding common shares as at July 31, 2023.

Disclosure of Outstanding Share Data

As at February 19, 2024, there were 168,661,402 common shares issued and outstanding along with 467,401 stock options and 60,528 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 predetermined option 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.

Conference Call Information

Gildan Activewear Inc. will hold a conference call to discuss fourth quarter and full year 2023 results and its business outlook today at 8:30 AM ET. A live audio webcast of the conference call, as well as a replay, will be available on Gildan's company website at the following link: http://www.gildancorp.com/events . The conference call can be accessed by dialing toll-free (800) 715-9871 (Canada & U.S.) or (646) 307-1963 (international) and entering passcode 8434821. A replay will be available for 7 days starting at 11:30 AM ET by dialing toll-free (800) 770-2030 (Canada & U.S.) or (609) 800-9909 (international) and entering the same passcode.

Notes

This release should be read in conjunction with the attached unaudited condensed financial statements as at and for the three and twelve months ended December 31, 2023, and Gildan's Management's Discussion and Analysis and its audited consolidated financial statements for the fiscal year ended December 31, 2023 which will be filed by Gildan with the Canadian securities regulatory authorities and with the U.S. Securities and Exchange Commission and will also be provided on Gildan's website. Gildan has filed its annual report on Form 40-F for the year ended December 31, 2023 with the SEC. The Form 40-F, including the audited combined financial statements, included therein, is available at https://gildancorp.com/en/ and on EDGAR at http://www.sec.gov. Hard copies of the audited combined financial statements are available free of charge on request by calling (514) 744-8515.

About Gildan

Gildan is a leading manufacturer of everyday basic apparel. The Company's product offering includes activewear, underwear and socks, sold to a broad range of customers, including wholesale distributors, screenprinters or embellishers, as well as to retailers that sell to consumers through their physical stores and/or e-commerce platforms and to global lifestyle brand companies. The Company markets its products in North America, Europe, Asia Pacific, and Latin America, under a diversified portfolio of Company-owned brands including Gildan(TM), American Apparel(TM), Comfort Colors(TM), GOLDTOE(TM) and Peds(TM).

Gildan owns and operates vertically integrated, large-scale manufacturing facilities which are primarily located in Central America, the Caribbean, North America, and Bangladesh. Gildan operates with a strong commitment to industry-leading labour, environmental and governance practices throughout its supply chain in accordance with its comprehensive ESG program embedded in the Company's long-term business strategy. More information about the Company and its ESG practices and initiatives can be found at www.gildancorp.com. Investor inquiries: Jessy Hayem, CFA Vice-President, Head of Investor Relations (514) 744-8511 jhayem@gildan.com Media inquiries: Genevieve Gosselin Director, Global Communications and Corporate Marketing (514) 343-8814 ggosselin@gildan.com

We seek Safe Harbor.