Hanes Reports Double-Digit Growth
Net Sales Increase OF 13% For Quarter
North Carolina-based Hanesbrands (asi/59528) has announced strong Q2 sales growth, fueled by acquisitions, international gains and margin expansion. The apparel manufacturer posted a net sales increase of 13% for the quarter, reaching total revenues of $1.52 billion, compared to $1.34 billion a year ago. The firm’s adjusted operating profit increased 15% to $265 million, while its adjusted earnings per share grew 16% in the quarter.
Even though it was Hanes’ sixth straight quarter of record results, the company (NYSE:HBI) fell short of analysts’ expectations and saw its stock fall by more than 15% after the earnings report was released. The firm updated its full-year net sales projections to slightly less than $5.9 billion, compared to first-quarter guidance between $5.9 billion and $5.95 billion.
“We are tracking to our full-year profit expectations,” said Hanes Chairman and CEO Richard A. Noll. “The integrations of our DBApparel and Knights Apparel acquisitions are proceeding on plan, and we continue to reap benefits from the past acquisitions of Gear for Sports and Maidenform.”
Activewear net sales for Hanes increased by 19% in the quarter, due in part to high-single-digit growth from Champion as well the company’s April acquisition of Knights Apparel, a recognized collegiate apparel brand name. Hanes announced it will combine Knights and Gear for Sports under a single Licensed Sports Apparel commercial business “to take advantage of complementary expertise in brand building, marketing, graphic design, licensing relationships, supply chain and retailer relationships across channels,” according to a release.
Innerwear sales for the company decreased 1% in the quarter, but international sales for Hanes continued to soar, increasing over 100% from last year through the acquisition of DBApparel, a European maker of underwear and intimate apparel. The company saw significant margin expansion in both its activewear and innerwear segments. “Our brand innovation platforms and global supply chain performance continue to drive margin improvement,” Noll said.