The economic shrapnel cast by shutdown measures tied to the coronavirus pandemic damaged the first-quarter performance of large publicly traded companies in the promotional products industry, including Gildan (asi/56842), Cimpress (asi/162149) and HanesBrands (asi/59528), according to earnings reports released this week.

Top 40 distributor BAMKO (asi/131431) bucked the trend with a year-over-year quarterly increase, but its parent company warned of headwinds.

Montreal-based Gildan, the fifth-largest supplier in the North American promo industry and one of the biggest manufacturers of apparel basics, reported that global sales across all its business channels declined 26.4% to $459.1 million in Q1. After a $22.7 million profit in Q1 2019, Gildan experienced a $99.3 million net loss in the first quarter of 2020. That translated to a loss of 50 cents per share.

“During the first quarter, we faced unprecedented impacts globally as the COVID-19 pandemic unfolded,” said Gildan President/CEO Glenn Chamandy, noting that a positive was Gildan’s recent shift to producing face masks to aid in the fight against COVID-19.

Glenn Chamandy, Gildan

Still, the situation has remained grim in the early part of the second quarter. Gildan noted that point-of-sale levels in its North American imprintables channel were down 75% in April.

“Based on this situation and the expectation that COVID-19 social distancing measures and related economic impacts will have a significant impact on demand during the quarter, we are planning for a significant decline in point-of-sale and shipments for the second quarter of 2020,” Gildan said in a statement.

Elsewhere, Ireland-headquartered Top 40 distributor Cimpress announced preliminary results for its fiscal third quarter (ended March 31) that showed total global revenue declined 10% year over year to $598 million. EBITDA tumbled 20% to $71 million. Cimpress, which is parent company of e-commerce promo products/print marketing seller Vistaprint and former Top 40 distributor National Pen, said its fiscal Q3 operating loss was $88 million.

Again, economic fallout from COVID-19 was the culprit. Sales were up through February until the pandemic struck, Cimpress said.

“Demand worsened through the month of March, with consolidated bookings declining approximately 65% year over year in the last week of the month and first week of April,” Cimpress said in a statement. “In the week ended Saturday April 25, the rate of year-over-year decline lessened to approximately 40% as our customer and product focus has evolved in reaction to the current situation.”

Cimpress didn’t break out the performance of Vistaprint and National Pen in particular in its preliminary results. That information could be available May 5 when full results are released. Still, the company noted that “the impact of the pandemic on revenue growth has differed significantly by business, country, product line and week.”

Cimpress also announced that Apollo Global Management, a private equity firm headquartered in New York, was investing $300 million in the company. Cimpress intends to use the proceeds to pay down a portion of a term loan under its senior secured credit facility, among other things. The investment is structured as 5-year second lien notes with a 12% coupon, of which up to 50% can be paid in kind at Cimpress’ option.

Elsewhere, North Carolina-headquartered global apparel manufacturer HanesBrands (asi/59528) announced that sales across all its global business channels declined 17% year over year in the first quarter to $1.3 billion. Net loss for the quarter was $7.87 million, a decline from Q1 2019’s profit of more than $81 million. Loss per share was two cents.

“We were on a pace to deliver a strong first quarter above our expectations until the late quarter impact of the COVID-19 pandemic,” said Hanes CEO Gerald W. Evans Jr. “Prior to the pandemic impact, sales for our U.S. innerwear business were significantly better than our expectations. Champion was a driver of better-than-planned U.S. activewear growth, and our international businesses were in line with expectations. The effects of the pandemic changed those trajectories.”

On a positive note, HanesBrands is part of a consortium of apparel makers that has pivoted to producing face masks to help in the fight against the coronavirus.

Superior Group of Companies, the parent firm of Los Angeles-based BAMKO, said its promotional products division’s global sales improved 28.6% over the same period the prior year to $26.1 million. BAMKO spearheads the division, which includes former Top 40 distributor Tangerine Promotions. “The increase was primarily due to the expansion of our sales force in 2019 and continued product sales to our expanded customer base during the current year period,” Superior noted in financial documents.

Even so, Superior CEO Michael Benstock said: “In our promotional products segment, marketing budget reductions and event cancellations have impacted the entire branded merchandise industry, which is significantly event-driven. A prolonged moratorium on events and a reduction of in-store promotions will negatively impact our operating results in this segment as we move forward.”

Nonetheless, Benstock noted that BAMKO’s pivot to selling personal protective equipment is “helping to offset a significant amount of the negative impact in revenues.”

A precipitous drop in demand in the final few weeks of March caused promo distributors’ sales to collectively decline nearly 5% in the first quarter of 2020. It was the first such year-over-year quarterly decline in more than a decade. While the second quarter of 2020 is expected to show an even more marked decline, many industry executives are optimistic that sales will start to rebound during the third and fourth quarters.