- Prachi Singh |
HanesBrands for the full-year 2014 reported net sales increase of 15 percent, with adjusted operating profit increasing 28 percent, and adjusted EPS rising 45 percent. Net sales for the fourth quarter increased 18 percent to 1.52 billion dollars compared with the year-ago quarter. On a constant-currency basis, net sales increased 19 percent in the fourth quarter and 16 percent for the full year.
The company’s record results and strong fourth-quarter performance were driven by supply chain manufacturing performance, benefits from the acquisitions of Maidenform Brands and DB Apparel, and continued strong contributions from Innovate-to-Elevate product platforms.
Hanes has issued 2015 full-year guidance, including expectations for net sales growth of approximately 9 percent or approximately 5.775 billion dollars to 5.825 billion dollars, adjusted operating profit growth of 9 percent to 12 percent or approximately 835 million dollars to 855 million dollars, and adjusted EPS growth of 11 percent to 15 percent or about 6.30 dollars to 6.50 dollars despite significant negative impacts from foreign currency exchange rates.
Adjusted EPS in the fourth quarter increased 49 percent to 1.46 dollars. On a GAAP basis, diluted EPS was 0.88 dollars in the quarter versus 0.32 dollars a year ago and was 3.97 dollars for the year, up from 3.25 dollars a year ago.
“We had another outstanding year in 2014, generating significant shareholder value and again achieving record results for sales, operating profit and EPS,” Hanes Chairman and Chief Executive Officer Richard A. Noll said, adding, “We are in the midst of a multiyear period of strong growth supported by our powerful company-owned global supply chain, Innovate-to-Elevate product platforms, and acquisitions. Our guidance for 2015 translates into another year of double-digit EPS growth and what would be another record year for sales, profit and EPS, despite the challenges of currency exchange rates.”
The company’s adjusted operating profit margin for the year increased 140 basis points to 14.3 percent of sales. For the fourth quarter, adjusted operating profit increased 31 percent to 200 million dollars, and full-year adjusted operating profit increased 28 percent to 763 million dollars. On a GAAP basis, fourth-quarter operating profit was 131 million dollars versus 72 million dollars in the year-ago quarter, and full-year 2014 operating profit was 564 million dollars versus 515 million dollars last year.
Innerwear net sales were comparable in the fourth quarter to a year ago and increased 11 percent for the full year. Operating profit increased 17 percent in the fourth quarter and the full year. Hanes ComfortBlend and X-Temp underwear and socks and ComfortFlex Fit bras across multiple brands continue to do well. Innerwear’s operating profit margin of 21 percent in the fourth quarter increased 310 basis points, and for the full year the margin increased 130 basis points to 20.4 percent. Activewear net sales increased 10 percent in the fourth quarter and 8 percent for the full year. Champion sales, excluding those at mass retail, increased by more than 20 percent. Operating profit increased 10 percent in the quarter and 14 percent for the full year. The segment delivered record full-year profitability for the second consecutive year – a 13.7 operating margin, up 70 basis points.
International sales and operating profit increased as a result of acquisitions, but currency had a significant impact on results. On a constant-currency basis, international net sales increased 157 percent in the fourth quarter and 68 percent for the full year. Operating profit on a constant-currency basis increased 236 percent in the fourth quarter and 118 percent for the full year. The Direct to Consumer segment improved profitability for the second consecutive year. Net sales increased 1 percent in the fourth quarter and operating profit increased 29 percent. For the full year, net sales increased 8 percent with an operating profit increase of 17 percent.