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HanesBrands net sales rise 12 percent in Q2

By FashionUnited

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REPORT_ HanesBrands has announced that acquisition benefits, strong activewear performance, and increased operating efficiencies led to rise

in net sales for the second-quarter ended June 28, 2014, by 12 percent to 1.34 billion dollars and adjusted operating profit excluding actions increased 27 percent to 231 million dollars. Adjusted diluted EPS excluding actions increased 44 percent to 1.71 dollars.

On a GAAP basis, operating profit increased 14 percent to 207 million dollars, and diluted EPS increased 27 percent to 1.51 dollars. As a result of strong second-quarter 2014 results, the company has raised its 2014 full-year financial guidance. Increased full-year expectations include adjusted EPS of 5.20 dollars to 5.40 dollars, up 0.40 dollars; adjusted operating profit of 710 million dollars to 730 million dollars, up 45 million dollars; and net cash from operating activities of 500 million dollars to 600 million dollars, up 25 million dollars. The company has refined its expectations for net sales for the year to approximately 5.075 billion dollars.

“Our record first-half results are a testament to the value we are creating through our Innovate-to-Elevate, self-owned supply chain, and acquisition strategies,” Hanes Chief Executive Officer Richard A. Noll said, adding, “We remain confident in our business model and our performance momentum. We increased our operating profit margin by 200 basis points in the first half, and we raised our full-year EPS guidance for the second quarter in succession.”

Each business segment contributed to the total net sales increase of 143 million dollars in the second quarter. Significant contributions came from activewear segment growth and Maidenform benefits to each of the other segments. Excluding the Maidenform acquisition, net sales on a constant currency basis increased nearly 1 percent versus the year-ago quarter.

Innerwear net sales increased 15 percent in the second quarter, driven by the Maidenform acquisition as well as intimate apparel growth in the base business. Operating profit increased 19 percent with significant contributions from Maidenform and base business intimate apparel and basics.

All of the segment’s businesses – retail, branded printwear, and gear for sports – delivered sales and profit growth in the second quarter and first half of 2014. Currency continued to have a significant negative impact on international net sales and profits. On a constant-currency basis, international net sales increased 11 percent in the second quarter and operating profit increased 35 percent. As reported, international net sales increased 5 percent and operating profit increased 26 percent.

During the second quarter, Hanes also announced that it intends to acquire DBApparel, a France-based leading European marketer of intimate apparel, hosiery and underwear that used to be a sister division to Hanes under previous corporate ownership. The company’s guidance for full-year performance measures does not include any potential contribution from the pending acquisition of DBApparel.

HanesBrands