Hanesbrands “Soars” After Q3 Earnings Jump; Raises Outlook

In What's New, Industry News by Jeff Prine

hanesWinston-Salem, NC—After reporting a 36% increase in its third quarter earnings, Hanesbrands saw its shares soar nearly 13% in afterhours trading. The strong results promoted the company to raise its 2015 forecast.

For the three months ended Oct. 3, Hanesbrands posted a profit of $162.2 million, or 40 cents a share, up from $118.9 million, or 29 cents a share, a year earlier. Excluding acquisition- and integration-related charges and other items, per-share earnings rose to 50 cents from 43 cents.

Revenue increased 14% to 1.59 billion. Excluding acquisitions and a retailer exit from Canada, revenue rose 3%.

Analysts had expected per-share profit of 45 cents and revenue of $1.57 billion.

Acquisitions Boost

“We had another great quarter of double-digit growth that reflects our continued value-creation potential,” Chairman/CEO Richard A. Noll said. “We again have increased our operating profit and EPS guidance as we continue to drive growth and margin improvement through innovation and acquisition integration. We also reached another milestone in our strategic use of cash flow with the resumption of share buybacks.”

The company now expects 2015 full year earnings to be $1.66 to $1.68 on net sales of $5.85 billion, from its previous estimate for per-share profit of $1.61 to $1.66 and net sales of slightly less than $5.9 billion.

During the latest quarter, net sales in the company’s activewear segment rose 22% to $516.8 million, including a contribution of $84 million in sales from the Knight Apparel acquisition. Excluding acquisitions, activewear sales increased 3%. Core sales, which exclude acquisitions, increased 2% with growth of more than 30% for Champion in the department-store, midtier and sporting goods channels.

The international segment posted sales growth of 40% to $300.4 million, including $179 million from its DBApparel acquisition.

Innerwear segment revenue grew 2.9% to $667.2 million.

Gross margin rose to 36.5% from 35.5%.


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