- Prachi Singh |
For its second quarter, HanesBrands reported net sales increase of 3 percent to 1.76 billion dollars, while in constant currency, net sales increased 5 percent. The company said, second-quarter GAAP operating profit increased 6 percent to 234 million dollars, while adjusted operating profit increased 1 percent to 247 million dollars. GAAP diluted earnings per share of 42 cents increased 8 percent, and adjusted EPS of 45 cents was the same as a year ago.
“Our successful growth strategies drove strong second-quarter results and first-half momentum, including outstanding Champion brand growth, very effective product innovation, international growth, and continued consumer-direct sales growth,” said Hanes Chief Executive Officer Gerald W. Evans Jr. in a statement.
Review of HanesBrands’ second quarter performance
The company added that U.S. Innerwear segment net sales decreased 2 percent in the second quarter, while operating profit decreased 6 percent. Sales of Innerwear basics also decreased 2 percent and sales of Innerwear intimates declined less than 3 percent. Intimates performance reflected continued double-digit growth for shapewear and progress in the company’s bra revitalization initiative.
U.S. Activewear segment net sales increased more than 10 percent and operating profit increased nearly 20 percent, while operating margin increased 120 basis points to 15.3 percent. Champion sales increased more than 50 percent as a result of strong sell-through, space expansion, new distribution and growth in the consumer-directed, bookstore and distributor channels. The brand’s mass business, C9 by Champion, increased 8 percent. For the non-Champion portion of the segment, second-quarter sales declined, as the company exited commodity-oriented business in the mass channel and continues to focus on remixing sales to improve profitability.
International segment net sales increased 4 percent as reported and over 10 percent in constant currency. Operating profit increased 6 percent as reported and 12 percent in constant currency. The segment’s operating margin increased 20 basis points to 14.3 percent. The innerwear and activewear categories delivered growth internationally. Geographically, constant-currency sales increased by double-digits in Europe and Asia and high-single-digits in Australia.
HaneBrands reiterates full year guidance
The company expects 2019 net sales of 6.885 billion dollars to 6.985 billion dollars, GAAP operating profit of 900 million dollars to 930 million dollars, adjusted operating profit of 955 million dollars to 985 million dollars, GAAP EPS of 1.59 dollars to 1.67 dollars and adjusted EPS of 1.72 dollars to 1.80 dollars. At the midpoint, the 2019 guidance versus 2018 results represents net sales growth of approximately 2 percent; GAAP and adjusted operating profit growth of 5 percent and 2 percent, respectively; GAAP and adjusted EPS growth of 7 percent and 3 percent, respectively.
For the third quarter, net sales are expected to be in the range of 1.84 billion dollars to 1.875 billion dollars, up slightly at the midpoint versus a year ago. GAAP operating profit is expected to be 264 million dollars to 274 million dollars, and adjusted operating profit is expected to be 276 million dollars to 286 million dollars. GAAP EPS is expected to be 49 cents to 52 cents, and adjusted EPS is expected to be 52 cents to 55 cents.