HanesBrands Q1 net sales up 14 percent, updates FY15 outlook

HanesBrands has said that acquisition benefits helped drive record first-quarter financial results for the second consecutive year. Net sales increased 14 percent to 1.2 billion dollars in the quarter ended April 4, 2015, while adjusted operating profit excluding actions increased 16 percent to 133 million dollars and adjusted EPS excluding actions increased 16 percent to 0.22 dollar.

On a GAAP basis, operating profit increased 25 percent to 90 million dollars and EPS increased 30 percent to 0.13 dollar. The company said that the positive results reflect the benefits of the company’s multiyear acquisition strategy and continued improvement in base business operating margin.

“We are off to a great start in 2015, once again delivering a double-digit increase in EPS, while tracking to our full-year growth plans,” Hanes Chairman and Chief Executive Officer Richard A. Noll said, adding, “Our acquisition strategy continues to create value with DBApparel, Maidenform and Gear for Sports all contributing substantially to our double-digit growth. In addition, we are raising our 2015 performance outlook to reflect the recent acquisition of Knights Apparel.”

Since the end of the first quarter, Hanes closed on the acquisition of Knights Apparel, a leading seller of licensed collegiate logo apparel in the mass retail channel. Hanes has increased its full-year 2015 guidance to reflect the expected contributions from Knights Apparel and has updated its expectations for currency exchange rates for the rest of the year.

For 2015, Hanes now expects net sales of approximately 5.9 billion dollars to 5.95 billion dollars; adjusted operating profit of 853 million dollars to 873 million dollars; and adjusted EPS of 1.61 to 1.66 dollars. The new guidance represents an increase over 2014 results of 10.9 percent to 11.8 percent for net sales, 12 percent to 14 percent for adjusted operating profit, and 13 percent to 17 percent for adjusted EPS.

DBApparel, a marketer of intimate apparel and underwear in Europe that was acquired August 29, 2014, contributed net sales of 184 million dollars in the first quarter. The company’s adjusted operating profit margin increased 20 basis points in the first quarter. Core adjusted operating margin increased 90 basis points but was partially diluted as expected by the acquisition of DBApparel. The company continues to derive significant benefits from the previous acquisitions of Gear for Sports and Maidenform.

Innerwear net sales decreased 4 percent, while adjusted operating profit increased 13 percent primarily as a result of strong Maidenform cost synergies. The result was a 310-basis-point improvement in segment operating margin compared with the year-ago quarter. Activewear net sales increased 1 percent in the first quarter, while adjusted operating profit decreased 3 percent. Despite currency headwinds and Target’s exit from Canada, international sales and operating profit increased significantly, with strong contributions from DBApparel, Japan and Latin America.