TORONTO - Turtle Creek Asset Management Inc., a significant shareholder in Gildan Activewear Inc . (NYSE:GIL: TSX and NYSE), has criticized the recent board changes at Gildan, labeling them as insufficient and self-serving. In a statement released today, Turtle Creek expressed its dissatisfaction with the board's decision to replace former CEO Glenn Chamandy with Vince Tyra and its subsequent actions.
The investment firm, which has been a shareholder of Gildan for over ten years, has been vocal about its desire for the board to reverse what it calls the "hasty, haphazard and value destructive termination" of Chamandy. Turtle Creek has accused the board of engaging in a series of underhanded actions, including character assassination and legal maneuvers, which they believe have damaged shareholder value.
The firm also took issue with the board's so-called "board refreshment," stating that the only thing refreshed is the directors' names, and accused the board of arrogance and disdain for shareholders. The incoming Chair's support for CEO Tyra has been met with skepticism by Turtle Creek, which views it as a continuation of the status quo rather than a genuine change in leadership or direction.
In light of these events, Turtle Creek has announced its intention to support the nominees of Browning West at the upcoming 2024 annual and special meeting of Gildan shareholders. The firm believes that reinstating Chamandy and endorsing all of Browning West's nominees could help turn the page on what it describes as a "surreal chapter in Canadian governance history" and refocus on growing shareholder value.
This press release does not constitute a solicitation of a proxy, and Gildan shareholders are not being asked to give, withhold, or revoke a proxy. Turtle Creek, which manages over $5 billion for various clients, positions itself as an engaged, long-term shareholder, with partners and senior employees investing their wealth alongside fellow investors.
The information for this article is based on a press release statement from Turtle Creek Asset Management Inc.
InvestingPro Insights
As Gildan Activewear Inc. (GIL: TSX and NYSE) faces scrutiny from Turtle Creek Asset Management Inc., the company's financial health and strategic moves are in the spotlight. According to InvestingPro data, Gildan has a market capitalization of approximately $6 billion USD, with a P/E ratio standing at 11.83. This valuation comes as the company has seen a slight revenue decline of 1.38% in the last twelve months as of Q4 2023, though quarterly revenue growth showed an uptick of 8.71% in Q4 2023.
InvestingPro Tips reveal that Gildan's management has been proactively buying back shares, which could be a sign of confidence in the company's intrinsic value. Additionally, the company has not only maintained but also raised its dividend for 3 consecutive years, with the latest dividend yield reported at 2.35%. This consistency in rewarding shareholders could be a positive signal amidst the governance concerns raised by Turtle Creek.
With 4 analysts revising their earnings upwards for the upcoming period, there appears to be a cautiously optimistic outlook on Gildan's performance. For investors seeking further insights, there are additional InvestingPro Tips available, which can be accessed through the platform's detailed analysis at https://www.investing.com/pro/GIL. It's worth noting that with the use of the coupon code PRONEWS24, users can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing even more valuable insights into companies like Gildan.
As the annual and special meeting of Gildan shareholders approaches, these financial metrics and expert tips could prove crucial for investors making informed decisions in the context of the current governance dispute.
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