For the quarter ended June 29, the apparel and hosiery company posted net income of $121.59 million, or $1.19 a share, compared with $1.23 million or 1 cent a share, in the year-ago period. Income from continuing operations rose to $121.59 million, or $1.19 a share from $67.32 million, or 67 cents a share, in the prior year. 2012 results included loss from discontinued operations of $66.09 million.
The results sailed past analysts’ average estimate that expected 94 cents a share.
Net revenue rose 1.6% to $1.20 billion, just missing analysts’ estimate for $1.21 million in sales. Gross margin widened to 36.3% from 31.1% due to lower cotton costs and improvements in the supply chain.
According to HanesBrands, its “Innovate-to-Elevate” platforms, which integrate the strengths of its brands, low-cost supply chain and product innovation, continue to help “We achieved record profit margins and earnings per share in the second quarter with each business segment achieving improved profitability,” said Richard A. Noll, chairman/ceo.
Plans to Acquire Rival Maidenform
He added that the company is on “solid footing to continue to deliver value for consumers, retailers and investors.”
The positive earnings report comes on the heels of HanesBrands’ announcement last week that it plans to purchase Maidenform Brands Inc. in a $575 million deal that may close by the end of the year.
“We have moved into the low end of our target range for sustained operating profitability sooner than anticipated, and our cash flow and solid balance sheet have allowed us to begin paying quarterly dividends and agree to acquire Maidenform Brands,” Noll said.
With the Maidenform acquisition, HanesBrands is expected to add $500 million in sales, giving the company a projected $5 billion in annual revenue.
HanesBrands also revised its full-year earnings forecast. The company now expects earnings per share of $3.50 to $3.65 and net sales of $4.55 billion.
The company’s previous guidance was $3.25 to $3.40 a share and net sales of $4.6 billion.
Analysts’ consensus expects HanesBrands to report earnings of $3.46 a share on revenue of $4.59 billion.