UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2001

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

Commission file number: 1-14189
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GERBER CHILDRENSWEAR, INC.
(Exact name of registrant as specified in its charter)

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Delaware 62-1624764
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)

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7005 Pelham Road
Greenville, SC 29615
(Address of principal executive offices)

(864) 987-5200
(Registrant's telephone number, including area code)

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Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

[ X ] YES [ ] NO

As of May 9, 2001, there were outstanding 8,209,866 shares of Common Stock and
8,692,315 shares of Class B Common Stock.

GERBER CHILDRENSWEAR, INC.
INDEX

PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements

Condensed Consolidated Balance Sheets as of March 31, 2001,
April 1, 2000 and December 31, 2000 ...................................... 1

Condensed Consolidated Statements of Income and Comprehensive
Income for the quarters ended March 31, 2001 and April 1, 2000............ 2

Condensed Consolidated Statements of Cash Flows for the quarters ended
March 31, 2001 and April 1, 2000.......................................... 3

Notes to Condensed Consolidated Financial Statements...................... 4-7

Item 2 - Management's Discussion and Analysis of Financial Condition and Results
Of Operations............................................................. 8-11

Item 3 - Quantitative and Qualitative Disclosures about Market Risk................ 11

PART II - OTHER INFORMATION

Item 6 - Exhibits and Reports on Form 8-K.......................................... 11

Signatures......................................................................... 12

PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

GERBER CHILDRENSWEAR, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED) (UNAUDITED) (NOTE)
MARCH 31, APRIL 1, DECEMBER 31,
2001 2000 2000
----------- ----------- ------------

ASSETS (In thousands)
Current Assets
Cash and cash equivalents ................................ $ 34,949 $ 24,696 $ 31,203
Accounts receivable, net ................................. 35,177 36,486 38,658
Inventories .............................................. 53,627 68,745 56,937
Deferred income taxes .................................... 3,141 2,819 3,085
Other .................................................... 2,384 1,929 2,562
-------- -------- --------
Total current assets ............................... 129,278 134,675 132,445
-------- -------- --------

Property, plant and equipment ................................ 50,651 40,029 49,629
Less accumulated depreciation ............................ 17,940 13,374 16,867
-------- -------- --------
32,711 26,655 32,762
-------- -------- --------
Other Assets
Excess of cost over fair value of net assets acquired, net 16,342 17,843 16,985
Other .................................................... 9,009 8,497 9,458
-------- -------- --------
Total other assets ................................. 25,351 26,340 26,443
-------- -------- --------
$187,340 $187,670 $191,650
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable ......................................... $ 8,642 $ 13,160 $ 10,825
Accrued expenses ......................................... 14,639 17,127 15,160
Current portion of long-term debt and capital leases ..... 5,358 6,682 7,767
Income tax payable ....................................... 5,257 4,569 4,862
-------- -------- --------
Total current liabilities .......................... 33,896 41,538 38,614
-------- -------- --------

Non-Current Liabilities
Long-term debt and capital leases, less current portion .. 4,150 11,047 5,621
Other non-current liabilities ............................ 18,595 20,059 20,109
-------- -------- --------
Total non-current liabilities ...................... 22,745 31,106 25,730
-------- -------- --------

Shareholders' Equity ......................................... 130,699 115,026 127,306
-------- -------- --------
$187,340 $187,670 $191,650
======== ======== ========

Note: The amounts were derived from the audited financial statements at that
date.

See accompanying notes

1
4

GERBER CHILDRENSWEAR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)

FOR THE QUARTER ENDED
-------------------------
MARCH 31, APRIL 1,
2001 2000
-------- --------

(IN THOUSANDS,
EXCEPT PER SHARE DATA)

Net sales .................................. $ 54,245 $ 60,760
Cost of sales .............................. 40,046 44,622
-------- --------
Gross margin ........................... 14,199 16,138
Selling, general and administrative expenses 9,218 10,015
Other, net ................................. (1,794) --
-------- --------
7,424 10,015
-------- --------
Income before interest and income taxes .... 6,775 6,123
Interest expense, net of interest income ... (289) 126
-------- --------
Income before income taxes ................. 7,064 5,997
Provision for income taxes ................. 2,374 2,078
-------- --------
Net income ................................. 4,690 3,919
Foreign currency translation ........... (1,270) (846)
-------- --------
Comprehensive income ....................... $ 3,420 $ 3,073
======== ========

Earnings per common share .................. $ .24 $ .20
Earnings per common share - diluted ........ $ .24 $ .20

Denominator
Weighted average shares - basic ............ 19,856 19,712
Effect of dilutive securities:
Nonvested stock/stock options ............ 28 190
-------- --------
Adjusted weighted average shares - diluted . 19,884 19,902
======== ========

See accompanying notes

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5

GERBER CHILDRENSWEAR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

FOR THE QUARTER ENDED
-------------------------
MARCH 31, APRIL 1,
2001 2000
-------- --------

(In thousands)
OPERATING ACTIVITIES
Net income .......................................................... $ 4,690 $ 3,919
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization ..................................... 1,547 1,577
Other ............................................................. 329 (199)
Changes in assets and liabilities
Accounts receivable, net ...................................... 3,258 618
Inventories ................................................... 3,113 (3,538)
Accounts payable .............................................. (2,162) 3,940
Other assets and liabilities, net ............................. (1,312) 4,073
-------- --------
9,463 10,390
-------- --------
INVESTING ACTIVITIES
Purchases of property, plant and equipment .......................... (1,728) (1,250)
Proceeds from sale of property, plant and equipment ................. 7 64
-------- --------
(1,721) (1,186)
-------- --------
FINANCING ACTIVITIES
Principal payments on long-term borrowings and capital leases ....... (3,879) (1,793)
Repurchase of common stock .......................................... (45) --
-------- --------
(3,924) (1,793)
-------- --------

Effect of exchange rate changes on cash ............................. (72) (218)
-------- --------

Net increase in cash and cash equivalents ............................... 3,746 7,193
Cash and cash equivalents at beginning of period ........................ 31,203 17,503
-------- --------
Cash and cash equivalents at end of period .............................. $ 34,949 $ 24,696
======== ========

See accompanying notes

3
6

GERBER CHILDRENSWEAR, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The condensed consolidated financial statements included herein have
been prepared by Gerber Childrenswear, Inc. ("the Company") pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations; however, the Company believes
that the disclosures are adequate to make the information presented not
misleading. The interim financial statements are unaudited and, in the opinion
of management, contain all adjustments necessary to present fairly the Company's
financial position and the results of its operations and cash flows for the
interim periods presented. It is suggested that these interim financial
statements be read in conjunction with the Company's audited consolidated
financial statements and notes thereto included in the Company's 2000 Annual
Report on Form 10-K.

2. CONSOLIDATED FINANCIAL STATEMENTS

The accompanying condensed consolidated financial statements include
the accounts of the Company and its wholly-owned subsidiaries. The financial
statements of all foreign subsidiaries were prepared in their respective local
currencies and translated into United States dollars based on the current
exchange rate at the end of the period for the balance sheet and a weighted
average rate for the periods on the statements of income. All significant
intercompany balances have been eliminated in consolidation.

3. SEASONALITY OF BUSINESS

The results of operations for the interim periods presented are not
necessarily indicative of the results to be expected for a full fiscal year, due
to the seasonal nature of some of the Company's products and retailer initiated
promotions.

4. USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

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7

GERBER CHILDRENSWEAR, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)

5. INVENTORIES

Inventories consist of the following (in thousands):

March 31, 2001 April 1, 2000 December 31, 2000
-------------- ------------- -----------------

Raw materials $ 8,521 $10,589 $ 9,514
Work in process 8,224 16,447 9,956
Finished goods 36,882 41,709 37,467
------- ------- -------
$53,627 $68,745 $56,937
======= ======= =======

6. INCOME TAXES

The Company's effective income tax rate was 33.6% and 34.7% for the
quarters ended March 31, 2001 and April 1, 2000, respectively. The rates were
lower than the statutory rates in 2001 and 2000 due to the impact of foreign
earnings, certain of which are taxed at lower rates than in the United States,
partially offset by goodwill amortization, most of which is not deductible for
federal and state income tax purposes.

7. RECENTLY ISSUED ACCOUNTING STANDARDS

In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("FAS 133"). This statement established
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts (collectively referred to as
derivatives), and for hedging activities. It requires that an entity recognize
all derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. If the derivative is a
hedge, depending on the nature of the hedge, changes in fair value will be
either offset against the change in fair value of the hedged assets,
liabilities, or firm commitments through earnings, or recognized in other
comprehensive income until the hedged item is recognized in earnings. The
Company adopted the standard effective January 1, 2001, and the adoption did not
have a material impact on the condensed consolidated financial statements.

8. RECLASSIFICATIONS

Certain amounts in 2000 have been reclassified to conform to current
presentations.

5
8

GERBER CHILDRENSWEAR, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)

9. BUSINESS SEGMENTS AND GEOGRAPHIC AREAS

The Company operates in two business segments: apparel and hosiery. The
apparel segment consists of the production and sale of infant and toddler
sleepwear, playwear, underwear, bedding, bath, cloth diapers and other products
to mass merchandise outlets in the U.S. under the Gerber brand and other labels.
The hosiery segment, which was acquired on December 17, 1997, consists of the
production and sale of sport socks under the Wilson, Coca-Cola, Converse and
Dunlop names to major retailers in the United States and/or Europe.

Net sales, income before interest and income taxes, depreciation and
amortization, and capital additions are reported based on the operations of each
business segment or geographic region. Assets are those used exclusively in the
operations of each business segment or geographic region, or which are allocated
when used jointly. The following table sets forth certain unaudited results of
operations and other financial information of the Company by business segment
and geographic region (in thousands):

BUSINESS SEGMENTS FOR THE QUARTER ENDED
--------------------------
MARCH 31, APRIL 1,
2001 2000
------- -------

Net sales:
Apparel ................................. $38,363 $44,168
Hosiery ................................. 15,882 16,592
------- -------
Total net sales ............................. $54,245 $60,760
======= =======

Income before interest and income taxes:
Apparel ................................. $ 6,065 $ 4,042
Hosiery ................................. 710 2,081
------- -------
Total income before interest and income taxes $ 6,775 $ 6,123
======= =======

Depreciation and amortization:
Apparel ................................. $ 680 $ 758
Hosiery ................................. 867 819
------- -------
Total depreciation and amortization ......... $ 1,547 $ 1,577
======= =======

Capital additions:
Apparel ................................. $ 886 $ 1,132
Hosiery ................................. 842 118
------- -------
Total capital additions ..................... $ 1,728 $ 1,250
======= =======

6
9

GERBER CHILDRENSWEAR, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)

9. BUSINESS SEGMENTS AND GEOGRAPHIC AREAS (CONTINUED)

MARCH 31, APRIL 1, DECEMBER 31,
2001 2000 2000
-------- -------- --------

Assets:
Apparel ................................. $136,050 $135,890 $141,338
Hosiery ................................. 51,290 51,780 50,312
-------- -------- --------
Total assets ................................ $187,340 $187,670 $191,650
======== ======== ========

Inventories (included in assets):
Apparel ................................. $ 43,336 $ 59,526 $ 48,047
Hosiery ................................. 10,291 9,219 8,890
-------- -------- --------
Total inventories (included in assets) ...... $ 53,627 $ 68,745 $ 56,937
======== ======== ========

GEOGRAPHIC AREAS FOR THE QUARTER ENDED
--------------------------
MARCH 31, APRIL 1,
2001 2000
-------- --------
Net sales:
United States ........................... $ 49,033 $ 54,962
All other ............................... 5,212 5,798
-------- --------
Total net sales ............................. $ 54,245 $ 60,760
======== ========

Income before interest and income taxes:
United States ........................... $ 6,016 $ 5,342
All other ............................... 759 781
-------- --------
Total income before interest and income taxes $ 6,775 $ 6,123
======== ========

MARCH 31, APRIL 1, DECEMBER 31,
2001 2000 2000
-------- -------- --------
Assets:
United States ........................... $163,776 $163,053 $166,769
All other ............................... 23,564 24,617 24,881
-------- -------- --------
Total assets ................................ $187,340 $187,670 $191,650
======== ======== ========

10. CURTAILMENT GAIN ON POSTRETIREMENT PLAN

Effective January 1, 2001, the Company amended the postretirement plan
by increasing eligibility requirements which resulted in a gain on curtailment
of postretirement benefit costs of approximately $1.8 million.

7
10

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

SAFE-HARBOR STATEMENT REGARDING FORWARD-LOOKING DISCLOSURE

This report includes "forward-looking statements" within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended, which represent
the Company's expectations or beliefs concerning future events that involve
known and unknown risks and uncertainties, including, without limitation, those
associated with the effect of national, regional and foreign economic conditions
(including foreign exchange rates), the overall level of consumer spending, the
performance of the Company's products within the prevailing retail environment,
customer acceptance of both new designs and newly-introduced product lines,
competition and financial difficulties encountered by customers. All statements
other than statements of historical facts included in this quarterly report,
including, without limitation, the statements under Management's Discussion and
Analysis of Financial Condition and Results of Operations, are forward-looking
statements. Although the Company believes that the expectations reflected in
such forward-looking statement are reasonable, it can give no assurance that
such expectations will prove to have been correct and actual results,
performance or events could differ materially from those expressed in such
statements.

RESULTS OF OPERATIONS

BUSINESS SEGMENT DATA

For information regarding net sales, income before interest and income
taxes and assets by industry segment, reference is made to the information
presented in Note 9 "Business Segments and Geographic Areas" to the condensed
consolidated financial statements.

FIRST QUARTER ENDED MARCH 31, 2001 COMPARED TO FIRST QUARTER ENDED APRIL 1, 2000

Net sales. Apparel net sales were $38.4 million for the first quarter
of 2001, a decrease of $5.8 million or 13.1% below net sales of $44.2 million
for the first quarter of 2000. The Apparel sales decline was due to unit
declines in both basic products and fashion/seasonal products. The Company
placed less emphasis on developing fashion/seasonal products for 2001 with sales
of $1.5 million versus $4.3 million in 2000. Sales of Apparel basic products
were 7.0% below last year's sales, reflecting increased promotional activity by
competition as well as retailers seeking to lower inventory levels to reflect a
general softening of sales in the marketplace. Hosiery net sales were $15.9
million in the first quarter of 2001, a decrease of $.7 million or 4.3% below
net sales of $16.6 million for the first quarter of 2000, due to a drop in the
average exchange rate between the Irish Punt and the U.S. Dollar in the
translation of the Irish operations.

Gross margin. Gross margin as a percentage of net sales decreased from
26.6% in 2000 to 26.2% in 2001. The decrease in gross margin in 2001 was due to
lower margins on Hosiery as a result of domestic cost increases and promotional
pricing in European markets, offset in part by Apparel cost decreases due to
more efficient operations and reduced domestic manufacturing.

Selling, general & administrative expenses. Selling, general and
administrative expenses ("SG&A") decreased in absolute dollars but increased as
a percentage of net sales to 17.0% in the

8
11

first quarter of 2001, from 16.5% in 2000. The percentage increase was due to
the 8.0% reduction in expenses in absolute dollars falling short of the 13.1%
sales decline.

Other. Represents a gain on curtailment of postretirement benefit costs
associated with the Company's decision to change eligibility requirements of the
postretirement benefit plan. These changes resulted in a gain on curtailment of
postretirement benefit costs of approximately $1.8 million in the first quarter
of 2001.

Income before interest and income taxes. Apparel income before interest
and income taxes ("EBIT") was $6.1 million in the first quarter of 2001 compared
to $4.0 million in the first quarter of 2000. The increase in Apparel EBIT in
2001 was the result of improved gross margin percentage and the $1.8 million
gain reported in Other. Hosiery EBIT was $.7 million in the first quarter of
2001 compared with $2.1 million in the first quarter of 2000. The decrease in
Hosiery EBIT was the result of lower gross margins due to domestic cost
increases and promotional pricing in European markets.

Interest expense, net of interest income. Interest expense, net was
($0.3) million in the first quarter of 2001 compared to $.1 million in the first
quarter of 2000. The decrease in interest expense, net is due to reduced debt
and higher cash balances maintained in 2001, partially arising from the
Company's lower overall inventory levels.

Provision for income taxes. Provision for income taxes was $2.4 million
in the first quarter of 2001 compared to $2.1 million in the first quarter of
2000. The effective tax rate was 33.6% for 2001 compared to 34.7% for 2000. The
Company's effective income tax rate reflects the impact of foreign earnings,
certain of which are taxed at lower rates than in the United States, partially
offset by goodwill amortization, most of which is not deductible for federal and
state income tax purposes.

Net income. As a result of the above, net income for the first quarter
was $4.7 million in 2001 and $3.9 million in 2000.

LIQUIDITY AND CAPITAL RESOURCES

The Company's primary cash needs are for working capital, capital
expenditures and debt service. The Company has financed its cash needs primarily
through internally generated cash flow, in addition to funds borrowed, if
necessary, under the Company's credit agreement.

For the Apparel segment, working capital requirements vary throughout
the year. Working capital requirements have historically increased during the
first half of the year as inventory builds to support peak shipping periods. The
Hosiery segment is less seasonal and, while working capital requirements tend to
increase slightly during the second half of the year, the variation is small.

Net cash provided by operating activities for the quarter ended March
31, 2001 and April 1, 2000 was $9.5 million and $10.4 million, respectively. The
decrease in cash provided by operating activities in the first quarter of 2001
compared to 2000 was primarily due to changes in the Company's working capital
accounts. Historically, the Apparel segment builds inventory in the first six
months of the year to support third and fourth quarter sales volumes of certain
fashion/seasonal products. In 2001, the Company placed less emphasis on
developing

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12

fashion/seasonal products and continued to reduce excess inventories through
improvements in production planning and procurement practices. In addition,
Apparel sales were soft in the first quarter of 2001 due to increased
promotional activity by competitors as well as retailers seeking to lower
overall inventory levels due to the general softening of sales in the
marketplace. These sales reductions primarily resulted in the lower accounts
receivable balance at the end of the first quarter as compared to the prior
year. Accounts payable decreased in 2001 due to less purchases in the first
quarter related to fashion/seasonal products and due to the timing of purchases
and payments.

Capital expenditures were $1.7 million and $1.3 million for the first
quarter of 2001 and 2000, respectively. These expenditures consisted primarily
of building/leasehold improvements, manufacturing equipment, purchases of office
equipment and upgrades of information systems.

Net cash used in financing activities was $3.9 million and $1.8 million
for the first quarter of 2001 and 2000, respectively. Based on the cash provided
by operating activities in the first quarter of 2001 and 2000, the Company made
repayments on the Company's credit agreement and/or other long-term borrowing
arrangements. In addition, in 2001 the Company made an excess cash flow payment
as required under the credit agreement for approximately $2.1 million. In May
2001, the Company lowered the revolving committed amount under the Credit
Agreement from $60.0 million to $20.0 million due to the increased amount of
cash on hand.

The Company believes that cash on hand, combined with cash generated
from operations and amounts available under its credit facilities, will be
adequate to meet its working capital, capital expenditures and debt service
requirements for the next twelve months.

LICENSE AGREEMENT

The Company renewed its Baby Looney Tunes license with Warner Bros. in
April 2001. The renewed license agreement contains essentially the same terms
and conditions as the agreement that expired on December 31, 2000. The term of
the new agreement is from January 1, 2001 to December 31, 2003.

INFLATION

In general, costs are affected by inflation and the Company may
experience the effects of inflation in future periods. The Company does not
currently consider the impact of inflation to be significant in the businesses
or countries in which the Company operates.

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13

RECENT ACCOUNTING STANDARDS

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company does not utilize derivative financial or commodity based
instruments for trading or for speculative purposes but does utilize them in the
regular course of business. A review of the Company's financial instruments and
risk exposures at March 31, 2001 revealed that the Company had exposure to
interest rate and foreign currency exchange rate risks. The Company performed
sensitivity analysis at December 31, 2000 to assess the potential effect of a
change in the interest rate and a change to the foreign currency exchange rates
and concluded that near-term changes in either should not materially affect the
Company's financial position, results of operations or cash flows. The Company
has experienced no significant changes in these financial instruments or risk
exposures during the first quarter of 2001 and thus believes that the Company's
year-end assessment is still appropriate at March 31, 2001.

PART II - OTHER INFORMATION

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

10.29 License Agreement by and between Warner Bros., a division of
Time Warner Entertainment Company, L.P., and GCI dated as of
April 25, 2001.

(b) Reports on Form 8-K - None

11
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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

GERBER CHILDRENSWEAR, INC.
(Registrant)

DATE: May 11, 2001 By: /s/ Edward Kittredge
-------------------------
Edward Kittredge
Chairman, Chief Executive Officer
and President
(Principal Executive Officer)

DATE: May 11, 2001 By: /s/ Richard L. Solar
---------------------------------
Richard L. Solar
Senior Vice President and Chief
Financial Officer
(Principal Financial Officer)

DATE: May 11, 2001 By: /s/ David E. Uren
------------------------------
David E. Uren
Vice President of Finance, Secretary
and Treasurer
(Principal Accounting Officer)