Good morning, ladies and gentlemen, and welcome to the Gildan Activewear Annual Shareholders Meeting. My name is Donald Berg, and I am Chair of the Board. I am joined today by Glenn Schmandy, our President and Chief Executive Officer Rod Harries, our Executive Vice President, Chief Financial and Administrative Officer and Lindsay Matthews, our General Counsel and Corporate Secretary. Due to the ongoing impacts of the COVID-nineteen pandemic, we are once again holding the meeting in a virtual only format. Although we are disappointed we cannot be with you in person, our thoughts are with you, your families, and your communities as we continue to adapt to the unprecedented situation.
We are confident that hosting a virtual meeting will enable greater participation by our shareholders by allowing those who would not otherwise be able to travel to a physical meeting to attend online. All shareholders, regardless of their geographic location, have an equal opportunity to participate in this meeting via the live audio webcast and engage with directors and management of the company. You will have the opportunity to ask questions and vote on a number of important matters, and we encourage all shareholders to participate in the meeting. We will begin by conducting the official business of the meeting. While we are tabulating the votes, Glenn and Rod will address shareholders concerning the company's results and business plans.
After the official business of the meeting is completed, we will answer any questions submitted during the meeting. The business of the meeting will be conducted in English. However, facilities for simultaneous translation in French have been provided to you. You may, of course, ask questions in either English or French. I will now call the meeting to order and will ask Lindsey Matthews to act as secretary of the meeting and to take us through certain procedures for the meeting.
Thank you, mister chairman. As this meeting is being held virtually through live audio webcast, we think it's necessary to set out a few rules for the orderly conduct of the meeting. Only registered holders of common shares of record as of 03/09/2021 or their duly appointed proxy holders who registered with our transfer agent and obtained a control number prior to this meeting are permitted to participate, ask questions, and vote at this meeting. All other proxy holders are are entitled to join the meeting as guests. Registered shareholders and duly appointed proxy holders who have already voted are not required to vote again unless they wish to change their vote.
Registered shareholders and duly appointed proxy holders who wish communicate with the members of the management team and the board or with each other or who wish to ask a question in respect of a motion may do so using the instant messaging service on the virtual meeting platform. When asking a question, we would ask that you please indicate your name, which entity you represent, if any, and confirm that you are a registered shareholder or duly appointed proxy holder. Questions will generally be received shortly after they are submitted but will only be answered during the question period at the end of the meeting. Provided however, that questions that relate to procedural matters or to the motions before the meeting may be addressed during the meeting. Questions or comments containing inappropriate language or that are otherwise disruptive to the orderly conduct of the meeting for all shareholders will not be answered.
Questions which were already answered or that are redundant or repetitive will not be answered. We'd also like to advise you that today's votes on the election of directors, the advisory resolution on the company's approach to executive compensation, and the appointment of auditors will be conducted by a single electronic ballot. Registered shareholders of duly appointed proxy holders will be asked to vote on each item of business after all items of business have been presented. The Chairman will move all motions and no motion will need to be seconded. When you are asked to vote, you will receive a message on the virtual meeting platform requesting you to register your votes.
You will only have a certain amount of time to do so. I would also like to draw your attention to the text on the current slide and to advise everyone that certain of the comments you will hear today are forward looking statements that involve assumptions, risks and uncertainties that could cause actual results to differ materially from future results expressed or implied by such forward looking statements. We also refer you to our disclaimer regarding forward looking statements contained in our management's discussion and analysis for the 2020 fiscal year, which is available on the SEDAR, EDGAR and Gildan websites.
Thank you, Lindsay. I now appoint Computershare Investor Services as scrutineer to report on the number of common shares represented in person and by proxy at this meeting and to report on the voting results. The scrutineer has already provided me with a report on attendance at the meeting, and it shows that a quorum has been reached. I therefore declare the meeting regularly constituted for the transaction of such business as may properly be brought before it. I now present to the meeting the consolidated financial statements of the company for the fiscal year ended 01/03/2021, and the auditor's report thereon.
Copies of such documents have been made available through notice and access to our shareholders. We will now proceed with the election of the directors. The Board has determined that 10 persons should be elected as directors of the company and has proposed 10 candidates to hold such office for the ensuing year. In addition to Glenn Schemandy and myself, eight independent and highly qualified individuals are being proposed for election as directors. Their biographies are included in the company's management information circular made available to our shareholders.
Each of the nominees has expressed a desire to serve as a director of your company. I nominate each of the following persons for election as a director of the company to hold office until the close of the next annual meeting of the shareholders or until his or her successors are duly elected or appointed. The nominees are Glenn Schemandy, Maurice Petrone, Mark Carra, Shirley Cunningham, Russell Goodman, Charles Harrington, Luc Joven, Craig Levitt, Anne Martin Vachon, and myself, Donald Berg. As mentioned at the beginning of this meeting, voting today will be conducted by a single electronic ballot after all items of business have been presented. We will therefore continue with the next item of business on the agenda, and you will be prompted to vote on the election of each director and all other matters to be voted upon shortly after that.
The next item of business is an advisory vote on the company's approach to executive compensation as set forth in the management information circular. 2020 was an unprecedented year for Gildan. The Board and the Compensation and Human Resources Committee made several critical compensation decisions in 2020 necessary to retain and incentivize our skilled leadership team to not only lead the company through to a full recovery from the crisis but to continue to drive key long term strategic initiatives. We are confident that the decisions we made were in the best interest of our shareholders. As our recent financial results demonstrate, the leadership team's business decisions and actions in 2020 allowed Gildan to not only finish the year on a strong note but put the company on solid footing heading into 2021.
The results of the say on pay vote will not be binding on the Board. However, the Board will take into account the results, together with the other comments we receive from shareholders, when we consider the company's approach to executive compensation in the future. The full text of the advisory resolution is reproduced as Schedule C to the management information circular. I move that the resolution on the advisory vote on executive compensation set forth in the management information circular be adopted. As voting today will be conducted by a single electronic ballot, we will continue with the next item of business.
The next item of business is the appointment of KPMG LLC as the company's auditors. I move that KPMG LLC be appointed as the company's auditors and that the Audit and Finance Committee of the Board of Directors of the company be authorized to fix the remuneration of the auditors. We will now proceed with the voting by single electronic ballot. As a reminder, today's items up for vote are the election of directors, the advisory resolution on the company's approach to executive compensation, and the appointment of auditors. You will now be prompted to register your vote in respect of each of the three items of business.
Please register your votes by accessing the voting page when prompted and by, first, pressing on the for or withhold button next to the name of each proposed director second, pressing on the for or against button next to the advisory resolution on the company's approach to executive compensation and third, pressing on the for or withhold button next to the resolution with respect to the appointment of KPMG LLP as the company's auditors. The voting page will remain open for five minutes. Once the electronic ballot encloses, the voting page will disappear, and your votes will automatically be submitted. While you complete your electronic ballots, I will ask Glenn and Rod to provide us with a business update.
Thank you, Don, and good morning to all, and thank you for attending. I will be taking you through a short business overview and the actions we took in 2020, and Rod will be covering the financial overview of 2020 and update you on our first quarter results. First slide, please. 2020 was the most challenging year in my forty year career with Gildan. We encountered a once in a hundred year pandemic and two five hundred year back to back hurricanes in Central America.
We focused on health and safety of our people. We supported our employees while our plants were shut down, and no one went hungry. We provided all the necessary safety measures as we resumed production, and we provided humanitarian support to all our employees, families, and communities and where we operate. We took action to ensure our business continuity by increasing our financial flexibility. We took the difficult decision to suspend our dividend, but I'm proud to say that the company has returned to profitability in the second half of twenty twenty, and we finished the year very strong.
We also took the opportunity to accelerate our Back to Basics strategy, which will put us on a strong footing as we enter 2021. I would like to take an opportunity and a moment to thank all of our employees for their support during this difficult year. I always say that the strength of Gildan is in our people, so thank you. Next slide, please. Since 2018, our Back to Basics strategy put us on a path to simplify our business and remove complexity.
Our Back to Basics became more important given the challenges in 2020. As part of the strategy, we streamlined our business, consolidated manufacturing and distribution centers, and we rationalized product and brands. In 2020, we further optimized by completing our SKU rationalization with the reduction of 60% SKUs overall. We optimized our manufacturing cost base. We improved working capital and cash flow.
We leveraged our low cost manufacturing and took a price leadership position to to drive market share. Next slide, please. Our Back to Basics strategy will enable us to drive organic growth through four pillars: Number one, to increase share in our North American imprintable market through fashion tees, fleece and the return of social gatherings. Two, to expand our our printwear imprint footprint in international markets three, to capitalize on the shift to mass into private label and four, to grow our brands with our online retail partners. We will support our growth with manufacturing expansion by optimizing our Central American operations and building a new large state of the art complex in Bangladesh to support sales from 2023 onward.
We will continue to optimize our manufacturing cost structure and use these cost savings to drive market share as we move forward in 2021. Next slide, please. There are several industry shifts that are underway that have been reinforced by the pandemic. Casual wear, work from home, and health and lifestyle. Online selling, provides greater access to to products for for consumers, and private brands at mass as they make a transition from national brands.
Sourcing trends, consumers are focusing on near shoring and quick response, and ESG is increasingly becoming important for all stakeholders. We believe these industry shifts will provide great growth opportunities for Gildan as we move forward. Next slide, please. ESG has always been embedded into all aspects of our operations. Our strategy focused on three pillars: our people, the environment and the communities in where we operate.
In 2021, we will be further developing our ESG strategy and targets. Before I pass it over to Rod, I would like to leave you with a short video. Please play the video.
Thank you, Glenn. Glenn. Good morning, everyone. It's great to be with you even if it's on a virtual basis. When we entered 2020, we were thinking it was going to be a year where we resumed our strong track record of growth.
But as Glenn indicated earlier, 2020 was an unprecedented year that no one could have predicted. Still, our strong business model, financial position, and resilience enabled us to meet these challenges head on. Global restrictions and social distancing measures to control the pandemic significantly impacted demand for our products starting in the latter part of the first quarter of twenty twenty. Particularly in imprintables, where sales are tied to travel and tourism, large gatherings like sporting and entertainment events and venues where promotional products are sold. And in retail, many channels were impacted by store closures.
However, from the onset, we took actions to ensure the continuity of our business and made sure that we had the necessary financial flexibility to navigate through the crisis. We cut discretionary costs. We delayed noncritical capital expenditures. We secured additional debt, and we suspended dividends and share buybacks temporarily. Most importantly, as Glenn explained earlier, we accelerated our efforts under our Back to Basics strategy so that we could strengthen our competitive positioning for the economic recovery in the long term.
And as we move through the year, we saw these efforts take hold. As the economy picked up in the second half of the year, we returned to profitability. And despite all the challenges in the year, we ended 2020 on a strong note. In the fourth quarter, we delivered sales growth of 5% and adjusted EPS growth of 10% on a year over year basis. We finished with strong free cash flow generation of $358,000,000 for the full year and ended 2020 with a liquidity position of $1,600,000,000 setting us on a solid foundation and in a strong position for the future.
Next slide, please. And this has now continued, and we're very pleased with the company's first quarter results that we reported yesterday, demonstrating that our back to basic strategy is working efforts and our profitability objectives. Operationally, our strategy is making our business less complex, more cost effective and is helping us drive growth and the more efficient use of capital. We are also encouraged by the economic recovery so far, with increased reopens driven by the progress of the vaccine rollout globally, which we believe will help economic activity stay on a steady track of recovery. First quarter results reflected this strong start to 2021, and we delivered sales of $590,000,000 up 28 over the prior year, with increases in both our activewear and hosiery and underwear sales categories.
And when compared to the first quarter of twenty nineteen, sales were down only 5%, showing good progress in the recovery towards pre pandemic levels. We also delivered strong performance from a margin perspective, which in our view underscores the power of our back to basics strategy that is driving and is expected to continue to drive positive results going forward. Our reported gross margin was 32% and adjusted gross margin was 31.1%, up six fifty basis points over last year. We kept our SG and A expenses essentially flat at $73,000,000 for the quarter despite generating higher sales. And the combination of these elements allowed us to deliver operating margin of 19.3% and adjusted operating margin of 18.7, which led to GAAP diluted EPS of $0.50 and adjusted diluted EPS of $0.48 a significant improvement over the first quarter of twenty twenty and exceeding earnings performance in the first quarter of twenty nineteen.
Free cash flow of $38,000,000 was also strong in the quarter given the higher operating earnings and benefits from back to basics initiatives, which is allowing us to work with lower working capital requirements. Given our free cash flow, we reduced our net debt position during the quarter to $542,000,000 and our debt leverage ratio to 2.1x, near the high end of our target range of 1x to 2x adjusted EBITDA. Finally, given the company's positioning at the end of the quarter and our view that we are well on the road to recovery, we were pleased to announce in our press release yesterday that our Board approved the reinstatement of our quarterly cash dividend at the same rate where we left off prior to this temporary suspension of the dividend last year. So overall, a very strong performance in the first quarter, setting us on a good path for the year. Next slide, please.
This brings me to our concluding remarks regarding our business. We believe Gildan is set on a strong foundation for long term success. We are a leader in our industry with a focused business model and strong financial position. Our manufacturing excellence and low cost structure differentiates us in an unparalleled way from our competition. We have leading sustainable and ethical practices and most importantly, talented people who are driving the driving force of our success.
We're extremely pleased with our progress to date and are confident that all of these factors and our Back to Basics strategy is strengthening our positioning. And while 2020 had its challenges, it also allowed us to prove our resiliency and ability to adapt to changing environments. We are confident we are well positioned to take advantage of market share opportunities, deliver on our profitability targets and create shareholder value over the long term as we emerge from 2020 and move through 2021 as a fundamentally stronger company. Thank you. And I will now turn it back over to Don.
Thank you, Glenn. Thank you, Rod. I have received the Scrutineers' Report on the voting results, and I confirm the following. Regarding the election of directors, I'm pleased to announce that Glenn Schemandy, Donald Byrd, Maurice Petrone, Mark Carra, Shirley Cunningham, Russell Goodman, Charles Harrington, Luc Chauvin, Craig Levitt and Anne Marthan Vachon have been duly elected directors of the company. I am also pleased to report that the resolution for the appointment of KPMG LLP has also been carried.
Unfortunately, the advisory resolution on the company's approach to executive compensation has not been carried. While the Board believes that its executive compensation program and the important executive compensation decisions made over the course of 2020 are in the best interest of the company's shareholders, we will be taking the results of this vote into account when considering future compensation decisions. Detailed results for each vote will be available shortly on the SEDAR, EDGAR and Gildan websites. This completes the business on the agenda for the annual meeting. Before concluding this meeting, we would be pleased to answer questions from any registered shareholder or duly appointed proxy holder who wishes to address the meeting.
For each question we answer, I will read out the question as well as the name of the person who asked the question and, if applicable, the entity the person represents. Please limit your questions to topics relating today's subject matter, and keep your questions short and to the point. We would like to remind you that questions which were already answered or that are redundant or repetitive will not be answered. The question period will start now. So seeing that we've received no questions, before concluding the meeting, on behalf of the Board, I want to thank Gildan's management team and all of the employees of Gildan for the great work they are doing as they guide the company through these unprecedented challenges.
While the impacts of COVID-nineteen, together with the impact of back to back hurricanes in Central America, were particularly difficult for Gildan, the company was able to leverage the strength and the resiliency of its people and its unique and focused business strategy to quickly chart a path towards a strong recovery, all of which gave the Board the confidence to reinstate the company's dividend at the rate where we left off last year. The Board is extremely proud of what Gildan has accomplished in 2020 and how it has emerged stronger from these challenges. In addition, although we are disappointed that many of our shareholders did not support our say on pay vote this year, I can assure you that the Board will be taking the results of this vote into account when considering future compensation decisions. And as always, the Board is committed to continuing to engage with shareholders to receive your feedback on this important topic. On behalf of the Board and the management team, I would like to thank our shareholders for their ongoing confidence and support.
With that, I declare that this meeting is now terminated. Thank you all for having taken the time to be
with
us today.