Hanesbrands net sales rise 2 percent in 2013

REPORT_ Hanesbrands has announced buoyant financial results in 2013 for net sales, operating profit and profit margin, cash flow, and diluted earnings per share. The company closed the year with a strong fourth quarter and has substantially raised its 2014 full-year EPS guidance. For the full year, net

 sales increased 2 percent to 4.63 billion dollars, while on a constant-currency basis, net sales increased 3 percent. Net sales in the fourth quarter increased 12 percent to 1.29 billion dollars compared with the year-ago quarter.

The acquisition of Maidenform Brands contributed 9 percentage points of sales growth in the quarter, while strong results for the remainder of the company contributed 3 percentage points of growth. Adjusted EPS for the year increased 49 percent to 3.91 dollars from 2.62 dollars in 2012. For the fourth quarter, adjusted EPS of 0.98 dollars beat company guidance.

“We

had an outstanding year in 2013 with four consecutive quarters of strong performance. We achieved record results and reached significant milestones, including generating nearly 600 million dollars of cash from operations,” said Winston-Salem headquartered Hanesbrands, Chairman and Chief Executive Officer Richard A. Noll, adding, “We are raising our 2014 earnings guidance because we are increasingly confident that the momentum of our Innovate-to-Elevate strategy will deliver even better results. The combination of our brand power, low-cost supply chain and innovation platforms is generating value and growth opportunities.”

The company earned adjusted operating profit of 596 million dollars in 2013 for an adjusted operating margin of 12.9 percent, up 320 basis points. Improved profitability resulted from lower cotton costs and benefits of the company’s Innovate-to-Elevate initiatives. On a GAAP basis, operating profit for the quarter was 72 million dollars, compared with 153 million dollars a year ago, and for full-year 2013, it was 515 million dollars, up from 440 million dollars, for an operating margin of 11.1 percent compared with 9.7 percent.

For 2014, Hanes has increased its full-year guidance and now expects net sales of slightly less than 5.1 billion dollars; adjusted operating profit of 640 million dollars to 660 million dollars; adjusted EPS of 4.60 dollars to 4.80 dollars; and net cash from operating activities of 450 million dollars to 550 million dollars. The company expects its acquisition of Maidenform to contribute approximately 500 million dollars in sales and approximately 25 million dollars of operating profit in 2014.

Company’s innerwear net sales increased 20 percent in the fourth quarter and 5 percent for the full year. While Maidenform sales significantly contributed to growth, non-Maidenform sales also increased in each period. Operating profit declined 5 million dollars as a result of 17 million dollars of increased advertising investment. Excluding Maidenform contributions, sales increased 6 percent in the fourth quarter. Sales of socks and panties were up double digits, men’s underwear up high single digits, and bras up mid-single digits. For the year, excluding Maidenform, net sales increased 1 percent with socks and men’s underwear driving growth.

The activewear segment, previously known as outerwear, ended a successful year with strong fourth-quarter results – net sales up 1 percent and operating profit up 9 percent. For the year, operating profit increased by 98 million dollars on a net sales decline of 1 percent.

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