'We are trending in the right direction' - Hanesbrands Chairman
Rich A. Noll – Chairman, CEO of Hanesbrands
Hanesbrands Inc., a leading marketer of innerwear, outerwear and hosiery apparel, reported results for the 2009 second quarter.
Total net sales in the second quarter declined by 8 percent to $986.0 million, while GAAP earnings per diluted share were $0.32, compared with $0.60 in the year-ago second quarter. Excluding restructuring and other actions, non-GAAP earnings per diluted share in the second quarter were $0.42, compared with $0.65 a year ago.
“We are pleased with our second-quarter performance in the midst of a significant recession,” Hanesbrands Chairman and Chief Executive Officer Richard A. Noll said. “We achieved the sales trend improvement that we expected versus the first quarter, and our operating margin excluding actions of 9.8 percent was greater than 2008's full-year margin of 9.7 percent. We remain sharply focused on execution, cost control, conservative inventory management, and generating cash to pay down debt.”
Noteworthy Financial Highlights
Selected highlights for the quarter ended July 4, 2009, compared with the year-ago quarter ended June 28, 2008, include:
- Second-quarter sales were $986.0 million, compared with $1.07 billion a year ago. The 8 percent sales decline was better than the decline rate of the past two sequential quarters, which were also impacted by the recession. Total net sales declined by 13 percent in the first quarter 2009 and by 11 percent in the 14-week fourth quarter of 2008.
The sales decline rate for the Innerwear segment,which consists of replenishment-oriented basic apparel, continued in the mid-single digits. Second-quarter sales declined by 4 percent, compared with a decline of 6 percent in the first quarter.
Outerwear segment sales saw the significant trend improvement that the company anticipated. Second-quarter outerwear sales declined by 11 percent, compared with the first quarter's 21 percent decline. Based on the strength of advance orders, especially fleece, the company expects continued sequential improvement in the segment's sales decline rate with third-quarter sales expected to decline in the mid-single digits or better.
The second-quarter sales decline in the International segment was 20 percent, similar to the decline in the first quarter. Excluding the impact of foreign exchange rates on currency, International sales declined by 11 percent in the second quarter.Based on current currency trading trends, the negative currency effect is expected to diminish in the third and fourth quarters.
Hosiery segment sales declined by 14 percent in the second quarter, compared with a 21 percent decline in the first quarter.
“We are trending in the right direction,” Noll said. “We saw the decline rate improve sequentially in three of our four primary segments. We are now eagerly watching retail sell-through during the important back-to-school season. We expect single-digit declines in the third quarter's total net sales, and depending on retail sell-through during the back-to-school season, the rate of sales decline could improve over the second-quarter's sales decline.”