HanesBrands, parent company of Hanes Branded Printwear (asi/59528), announced net sales of $1.22 billion for the year’s first quarter, an increase of .8%. The supplier increased its adjusted operating profit by 10% and grew its adjusted earnings per share by 18%. Hanes attributed the positive results to its multiyear acquisition strategy and continued improvement in margins for its core business.
“We are off to a very good start and tracking to our plan to deliver another year of double-digit EPS growth,” said Hanes Chairman and CEO Richard A. Noll. “We remain focused on our previously announced sales initiatives, reaping acquisition synergies, expanding margins, and developing growth plans for our pending acquisition of Champion Europe.”
The company reported 2.8% growth in its activewear segment, which contains its promotional product apparel business. Growth in that segment was fueled by the $21 million in sales reported by Knights Apparel, a licensed collegiate apparel company that Hanes purchased last year. In an earnings call, Noll said the company’s activewear business would have been up double-digits if not for the bankruptcy of sporting goods retailer Sports Authority.
Hanes continued actions this quarter in anticipation of reducing inventory in the second half of 2016, which the company expects to account for $20 million in inventory-related costs this year. The supplier also reported that its U.S. online sales increased by 15% compared to the first quarter of 2015, and now represents 8% of the company’s overall domestic sales.
The 2016 first-quarter results reaffirmed the company’s full-year guidance, which includes expected net sales of $5.8 to $5.9 billion and growth of 1%-3%. The predictions do not include the company’s planned acquisition of Champion Europe, which is expected to close mid-year.