Despite posting a poor 2Q 09 performance, Gildan Activewear Inc.'s (Gildan) NYSE common stock has surged since the release of results, increasing 16.1% in a single trading day on 19 May 2009, and despite an earlier steep deterioration, appreciating significantly since our last update report. The recent increase is largely in reaction to news that its major customer, Broder Bros. Co. (Broder) had avoided bankruptcy and due to a more positive FY 2009 outlook....

Gildan Activewear Inc. (Gildan) recorded yet another dismal performance in 2Q 09. While revenues were in line with our estimate, profit margins were significantly below our expectations primarily due to high cost inventory liquidation, resulting in higher-than-anticipated cost of sales. Although we expect an improvement in the company’s top-line and profit margin going forward and our target price no longer supports a HOLD rating at current…

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Gildan Activewear Inc. (Gildan) recorded a very weak performance in 1Q 09, with top-line declining significantly below our estimate. Profit margins were also severely impacted, reflecting higher operating costs in 1Q 09. Going forward, given the severe downturn in the US economy, particularly in the retail sector and poor performance in 1Q 09, we expect to revise…