HanesBrands Q4 Profit Drops 60% on Acquisition Costs, Raises Forecast

hanesWinston-Salem, NC—Although HanesBrands reported Wednesday afternoon that its fourth quarter profit was down some 60%–weighed down by acquisition costs—the apparel and hosiery company still beat expectations. HanesBrands also increased its earnings forecast.

For the quarter ended Dec. 28, HanesBrands posted net income of $32.3 million, or 32 cents a share, compared with $80.4 million, or 81 cents a share, last year. Excluding the $80 million in one-time acquisition charges related to its $581 million purchase of Maidenform, adjusted earnings were 98 cents a share. That was ahead of analysts’ average estimate for 90 cents a share.

2014 Earnings Forecast Raised

Net sales rose 11.5% to $1.29 billion from $1.15 billion a year ago. Analysts had estimated revenues of $1.26 billion. The Maidenform deal added about $100 million to the total.

For the full year, HanesBrands reported earnings of $330.5 million, or $3.31 a share, compared with 2012 profit of $164.7 million, or $1.67 a share. Revenue rose to $4.63 billion from $4.53 billion.

“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 of cash from operations,” Hanes Chairman/CEO Richard A. Noll said.

“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.”

For its 2014 fiscal year, HanesBrands forecast earnings of $4.60 to $4.80 a share, above the “low $4-range,” suggested by Noll last fall. Sales are expected to hit nearly $5.1 billion. Analysts’ consensus expects $4.46 a share.

In other news, the company’s board of directors said Tuesday it had raised the quarterly cash dividend by 10 cents to 30 cents a share. The dividend is payable March 11 to shareholders registered on Feb. 18.

 

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Jeff Prine

Jeff Prine, Editor at Large, Accessories Magazine
Jeff returns as a regular contributor to Accessories magazine. Initially Jeff worked as senior editor at Accessories more than 20 years ago and his love of the industry has followed him until present. Since his tenure here, Jeff has continued to report jewelry, watch and other luxury goods trends as executive editor at Modern Jeweler magazine, fashion director at Lustre, and as contributor on products and trends for consumer and trade publications and websites. In addition to his editorial experience, Jeff also served as an adjunct instructor for accessories merchandising at Fashion Institute of Technology. jeffp@busjour.com