Shima Seiki

Free membership

Receive our weekly Newsletter
and set tailored daily news alerts.

Design

Acquisitions drive profits growth at Hanesbrands

Results were driven by continued acquisition benefits, global supply chain performance and margin expansion.

31st July 2015

Knitting Industry
 |  Winston-Salem, NC

Knitted Outerwear

Results were driven by continued acquisition benefits, global supply chain performance and margin expansion. Net sales increased by 13% to US 1.52 billion in the quarter ended 4 July 2015, while adjusted EPS excluding actions grew by 16% to US 0.50.

“We continue to deliver double-digit growth in adjusted operating profit and EPS as expected, and we are tracking to our full-year profit expectations,” said Richard A. Noll, Hanes Chairman and CEO. “The integrations of our DBApparel and Knights Apparel acquisitions are proceeding on plan, and we continue to reap benefits from the past acquisitions of Gear for Sports and Maidenform. Our brand innovation platforms and global supply chain performance continue to drive margin improvement.”

Financial highlights

Sales growth was driven by Activewear and acquisitions of DBApparel and Knights Apparel, the company reports. Activewear net sales increased by 19% in the second quarter, driven by high-single-digit growth of Champion, as well as US 37 million in net sales from Knights Apparel, a licensed apparel leader that was acquired in April 2015.

The company’s adjusted operating profit margin increased by 20 basis points in the second quarter to 17.4%. Innerwear and Activewear operating profit margins increased by 190 basis points and 130 basis points, respectively.

Meanwhile, the DBApparel integration planning continues to progress on schedule with implementation to begin late in the fourth quarter.

Innerwear

Innerwear net sales decreased by 1% in the second quarter, while operating profit increased by 7%, the company reports. Sales of basics, including underwear and socks, increased while intimate apparel sales decreased. The consumer sales environment remains uneven.

Activewear

Net sales in Activewear increased by 19% and operating profit increased by 30%, each led by Champion, Gear for Sports and the acquisition of Knights Apparel. The company has announced that it will integrate its Gear for Sports and Knights Apparel businesses into a combined Licensed Sports Apparel commercial business in the Activewear segment to take advantage of complementary expertise in brand building, marketing, graphic design, licensing relationships, supply chain and retailer relationships across channels.

International sales and operating profit increased significantly as a result of the acquisition of DBApparel in Europe and strong results in Japan. DBApparel outperformed company expectations in the first half and is expected to outperform initial full-year expectations.

Financial guidance for 2015

For 2015, Hanes has updated its full-year guidance for net sales and adjusted operating profit. The company now expects full-year net sales for 2015 of slightly less than US 5.9 billion, compared with a previous guidance range issued with first-quarter results of US 5.9 billion to US 5.95 billion.

The company expects adjusted operating profit of US 855 million to US 875 million, up by US 2 million on the low end and high end of the range versus previous guidance, and continues to expect adjusted EPS of US 1.61 to US 1.66.

The guidance reflects expectations for Knights Apparel and increased profit expectations for DBApparel. Knights Apparel is expected to contribute net sales of approximately US 160 million and adjusted operating profit of approximately US 18 million. DBApparel is expected to contribute approximately EUR 630 million in net sales and approximately EUR 40 million in adjusted operating profit, up from previous expectations of approximately EUR 30 million in adjusted operating profit.

www.hanes.com

Latest Reports

Business intelligence for the fibre, textiles and apparel industries: technologies, innovations, markets, investments, trade policy, sourcing, strategy...

Find out more