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Gildan Activewear cuts executive compensation 50 per cent following Q1 loss

Gildan Activewear Inc. says it is suspending its quarterly dividend and cutting executive compensation after losing nearly US$100 million in its first quarter due to the global impact of the COVID-19 pandemic.

The Montreal-based company says it is also suspending share repurchases and deferring non-critical capital spending and expenses.

The company’s board, chief executive and executive vice-presidents are foregoing half their salaries, senior staff face pay reductions of 20 to 35 per cent and most salaried employees are working four days a week.

Gildan says it lost US$99.3 million or 50 cents per diluted share for the period ended March 29. That compared with a US$22.7 million or 11-cent profit a year earlier.

Excluding one-time items including a US$100 million after-tax charge mainly from impairment for goodwill and intangible assets, Gildan earned an adjusted profit of US$11.2 million or six cents per share. That’s down from US$32.8 million or 16 cents per share in first quarter of 2019.

Revenues dropped 26.4 per cent to US$459.1 million from US$623.9 million in the prior year.

“Despite on-track performance during the first two months of the quarter, as global efforts to slow the transmission of COVID-19 heightened in March we started to see a significant downturn in demand for our core products, particularly in the imprintables channel where our products are typically used for promotional, sporting, entertainment, and other large-gathering and cultural events,” stated CEO Glenn Chamandy.