Hanes inks double-digit growth in three straight quarters
NYSE-listed and global marketer of everyday basic apparel HanesBrands said it has delivered three consecutive quarters of double-digit growth in net sales, adjusted operating profit and adjusted EPS.
The innerwear and garment marketer said third-quarter of 2014 results were aided by acquisition-related sales and profit contributions, modest base sales growth led by innovative products, and significant efficiency gains from global supply chain operations.
Alongside, HanesBrands also raised its full-year adjusted EPS guidance for the third time this year, based on quarterly results, despite, what it calls a continued environment of restrained consumer spending.
For the third fiscal quarter ended September 27, 2014, net sales increased 17 percent year-on-year to $1.40 billion, while adjusted operating profit excluding actions surged 23 percent to $217 million, and adjusted diluted EPS excluding actions zoomed 41 percent to $1.73.
Hanes clarified that unless noted, all consolidated measures and comparisons are adjusted to exclude third-quarter 2014 pretax charges of $63 million related to the acquisitions of DBApparel and Maidenform Brands, Inc., and other actions.
Net sales rose in each business segment at Hanes. Maidenform contributed $115 million and DBApparel contributed $81 million in the third quarter of 2014. Excluding acquisition contributions, sales on a constant currency basis, went up by 1 percent versus the year-ago quarter.
Strong global supply chain performance and Innovate-to-Elevate drove a 100-basis-point improvement in adjusted operating profit margin year-over-year in the third quarter of 2014, excluding DBApparel. Overall, including DBA, adjusted operating margin increased 70 basis points.
CEO Richard Noll said, “Our business continues to perform very well, particularly in an uncertain consumer environment and we have delivered more earnings in the first three quarters of 2014 than we did all of last year.”
Hanes completed the integration of Maidenform within one year of closing the acquisition. Now onwards, Maidenform brand results will be part of its core business in its Innerwear, International and Direct to Consumer segments.
Hanes informed that it remains on schedule for capturing synergies from the acquisition and integration, including ramp up of internalized production of select Maidenform intimate apparel styles in Hanes’ self-owned supply chain.
Hanes closed on the acquisition of DBApparel, a leading marketer of intimate apparel and underwear in Europe, from Sun Capital Partners, Inc., on August 29, 2014.
Hanes has begun cross-company integration planning for DBA and expects to create significant synergies by applying Hanes’ Innovate-to-Elevate strategy in Europe and leveraging its primarily self-owned global supply chain.
In the third quarter of 2014, innerwear net sales increased 16 percent from a year ago quarter, as a result of Maidenform acquisition, while its base business was up slightly compared with a year ago and operating profit increased 29 percent year-on-year on acquisition benefits.