Gildin’s HanesBrands integration in focus as top shareholder sells 137,548 shares

• Connecticut-based Ararat Capital Management sold 137,548 shares of Gildan Activewear in the third quarter

• As a result of the transaction, the total value of the stock position fell by $4.9 million.

• The fund now owns 217,685 Gildan shares worth $12.6 million, making it the fifth-largest holding in the fund.

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Connecticut-based Ararat Capital Management cut its stake in Gildan Sportswear (NYSE:GIL) for 137,548 shares in the third quarter, reducing its position by approximately $4.9 million, according to a Nov. 14 SEC filing.

According to the SEC filing on November 14, Ararat Capital Management LP reduced its exposure to Gildan Sportswear selling 137,548 shares during the third quarter. The value of the position decreased by $4.9 million, leaving the fund with 217,685 shares valued at $12.6 million as of September 30.

Ararat Capital Management’s Gildan Activewear stake now represents 6.7% of its 13F reportable AUM, ranking as its fifth-largest position.

Main participations after the presentation:

• NYSE:BY: $18.8 million (10.1% of assets under management)

• NASDAQ:LZ: $17.8 million (9.5% of assets under management)

• NASDAQ:DRVN: $17.7 million (9.5% of assets under management)

• New York Stock Exchange: PLOW: $13.6 million (7.3% of assets under management)

• NYSE:GIL: $12.6 million (6.7% of assets under management)

As of Thursday, shares were priced at $58.52, up about 17% from last year and slightly higher than the S&P 500, which is up nearly 13% in the same period.

• Gildan produces and sells sportswear, tights, underwear and related apparel under brands such as Gildan, American Apparel, GoldToe and Comfort Colors.

• The company generates revenue primarily through wholesale distribution to screen printers, beautifiers, retailers and lifestyle brands.

• Serving wholesale distributors, screen printers and major retailers in North America, Europe, Asia-Pacific and Latin America.

Gildan Activewear Inc. is a leading global basics apparel manufacturer that leverages scale and vertical integration to deliver profitable products across multiple geographies. The company focuses on supplying high-volume, high-quality sports apparel and tights to a diverse customer base, supporting both branded and private label offerings. Its competitive advantage lies in operational efficiency, wide distribution and a solid portfolio of recognized brands.

Ararat’s move appears to be a recalibration rather than a loss of conviction, especially as Gildan enters a materially different growth phase. With the HanesBrands acquisition now complete (doubling the company’s scale and introducing at least $200 million in cost synergies according to the Dec. 1 announcement), Gildan is effectively transforming itself from a low-cost apparel maker into a broader global powerhouse. That change changes the risk-reward profile in ways that could reasonably prompt funds to rebalance even if the long-term story is strengthening.

Ararat Capital’s trimmed stake now represents 6.7% of assets, and remains in the top five. Meanwhile, Gildan’s third-quarter revenue hit a record $911 million, although net profits fell to $120.2 million from $131.5 million a year earlier, a sign that the core business remains cyclical even as Gildan integrates HanesBrands’ broad portfolio, including iconic names like Champion, Maidenform and Playtex. Still, the combined platform gives Gildan a deeper moat, broader distribution and improved vertical integration across the Western Hemisphere.

13F reportable assets under management (AUM): The portion of a fund’s assets that must be disclosed in quarterly SEC Form 13F filings.
Assets under management (AUM): The total market value of all investments managed by an investment fund or company.
Exposure: The amount of capital or percentage of a portfolio invested in a particular asset or sector.
Position: The amount of a specific security or asset held by an investor or fund.
Vertical integration: Control of a company over multiple stages of its supply chain, from production to distribution.
Wholesale distribution: Selling goods in large quantities to businesses (not directly to consumers), often for resale.
Screen Printers: Companies that print designs or graphics on clothing and other products, often for custom or branded items.
Private Label Offers: Products manufactured by one company but sold under the brand name of another company.
Operational efficiency: The ability to deliver products or services using the least amount of resources and maximizing production.
Overcoming: Achieve greater profitability or better results than a benchmark or comparable group.
TTM: The 12-month period ending with the most recent quarterly report.

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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Gildin’s HanesBrands Integration in Focus as Major Shareholder Sells 137,548 Shares was originally published by The Motley Fool