An anonymous representative of Browning West reports

BROWNING WEST CAUTIONS SHAREHOLDERS REGARDING GILDAN ACTIVEWEAR'S RISKY PATH FORWARD UNDER CEO VINCE TYRA

Browning West LP, which is a long-term shareholder of Gildan Activewear Inc. and beneficially owns approximately 5 per cent of the company's outstanding shares, has issued a statement regarding the company's April 15 investor update.

As a reminder, Browning West is seeking to elect eight highly qualified and independent director candidates to Gildan's board of directors at the annual meeting of shareholders on May 28, 2024. Browning West's director candidates possess strong records of value creation, expertise in successful succession planning, relevant industry and governance experience, as well as proven management and board service pedigrees in Canada and the United States.

A representative of Browning West commented: "Browning West believes that Vince Tyra's 'new plan' raises troubling questions about the current board's stewardship of the company and confirms our fears that Mr. Tyra may lead Gildan down a similar destructive path as the ones he did at the helm of Fruit of the Loom Inc. and Broder Brothers Co.

"Our key questions are outlined below:

1. Why should shareholders allow Mr. Tyra, an executive with a record of failure, to pursue the same strategy as Glenn Chamandy, who has a long record of success?
   1. Mr. Tyra's plan is clearly nothing more than a continuation of the Gildan Sustainable Growth (GSG) strategy, which Mr. Chamandy launched in 2022. In fact, the GSG strategy was positively referenced 14 times across Mr. Tyra's presentation materials and his own statements. We appreciate that the board is finally reversing its prior, baffling criticism of Mr. Chamandy's growth strategy and acknowledging that he established the best strategy and foundation for the company. But why should shareholders allow a proven value-destroyer like Mr. Tyra to attempt to deliver this strategy when proven value-creator Mr. Chamandy is available and excited to execute the plan he designed?
2. Why is Mr. Tyra giving himself room to reduce margins when the company has margin tailwinds?
   1. Mr. Tyra gives himself room to reduce operating margins by 200 basis points from the current 20-per-cent level he inherited from Mr. Chamandy, whereas the Browning West slate's plan seeks to increase operating margins by over 200 basis points from current levels. This is highly concerning because while our plan reflects the opportunity to improve margins by shifting to higher-margin products and lower-cost production facilities in Bangladesh, Mr. Tyra's plan does not appear to capitalize on these opportunities. However, we are not surprised to see underwhelming margin guidance from Mr. Tyra because we observe significant margin degradation in his track record at both Fruit of the Loom and Broder Bros.
3. Why is Mr. Tyra proposing to spend shareholder funds on speculative investments like branding and international expansion?
   1. Mr. Tyra's plan contemplates speculative investments in brand building and international expansion. We are alarmed to hear Mr. Tyra referring to 'brand' 39 times across his presentation materials and statements. Sadly, Mr. Tyra appears to be introducing to Gildan the same failed branding strategies that doomed his prior employer, Fruit of the Loom. Mr. Tyra's plan also includes a vague strategy to invest in Gildan's international business, an area where Mr. Tyra has no previous experience. In contrast, the Browning West slate's plan calls for a disciplined focus on the few key initiatives that will deliver outsized returns for shareholders with minimal risk.
4. Why are the board and Mr. Tyra persisting with their vague and timid capital allocation policy?
   1. We believe that in recent years the board's vague and timid capital allocation policy has degraded Gildan's earnings-per-share growth and valuation multiple. Mr. Tyra's plan continues this policy, as it does not call for any increased levels of share repurchases despite the company's current low valuation and low leverage. It also alludes to potential acquisitions with no framework for what would qualify as an acquisition target. We remind shareholders of the dangers of allowing Mr. Tyra to undertake any acquisitions given that he destroyed tremendous value at Broder Bros. with an acquisition-based strategy. In contrast to the current board's weak capital allocation policy, the Browning West slate's plan is specific and clear, calling for leverage and buyback targets that would supercharge returns by reducing outstanding shares by 36 per cent over five years while also growing the dividend at a 9-per-cent annual rate.
5. Why do the board and Mr. Tyra fail to outline specific long-term EPS and stock-price targets?
   1. Mr. Tyra fails to outline any specific medium- or long-term earnings-per-share and stock-price targets. In fact, Mr. Tyra's plan includes lower sales growth, lower operating margins, higher capital intensity and weaker capital allocation relative to the Browning West slate's plan. This obviously suggests far-lower long-term potential returns than our plan. We believe that Mr. Tyra is avoiding any specific long-term targets because he lacks relevant experience in low-cost manufacturing and vertical integration, and he does not want to be held accountable by shareholders. In contrast, the Browning West slate's plan provides a clear pathway to at least a $60 (U.S.) share price by the end of 2025 and a $100 (U.S.) share price over the next five years."

Advisers

Olshan Frome Wolosky LLP is serving as legal counsel, Goodmans LLP is serving as Canadian legal counsel, and IMK is serving as Quebec legal counsel. Longacre Square Partners is serving as strategic adviser, and Pelican PR is serving as public relations adviser. Carson Proxy is serving as proxy adviser.