The company generated organic sales growth – as reported and in constant currency – for the first time in eight quarters. The company benefitted from increasing geographic diversification as international sales growth more than offset sluggish domestic sales. International sales, bolstered by Hanes Europe Innerwear, Champion Europe, and Hanes Australasia, accounted for 31 per cent of sales in the third quarter. Global Champion sales increased 16 per cent in the quarter.
The growth percentage of third-quarter sales in the online channel globally was in the high 20s, and online sales represented approximately 9 per cent of total sales. Online sales increased in all geographies across product categories.
The company generated $297 million in cash from operations in the third quarter and has generated $331 million year to date, up 59 per cent from a year ago. Cash flow is benefitting from working capital improvements and increased profitability.
On a GAAP basis, third-quarter operating profit of $253 million increased 11 per cent and diluted EPS of $0.55 increased 22 per cent. When excluding pretax acquisition-related and integration charges, adjusted operating profit of $270 million was comparable to a year ago, and adjusted EPS of $0.60 increased 7 per cent.
For 2017, the company expects net sales of approximately $6.450 to $6.475 billion, GAAP operating profit of $830 to $840 million, adjusted operating profit excluding actions of $925 to $935 million, GAAP EPS for continuing operations of $1.68 to $1.70, adjusted EPS for continuing operations excluding actions of $1.93 to $1.95, and net cash from operations of $625 to $725 million.
"We returned to organic growth in the quarter as international results were stronger than expected, and we are tracking to the midpoint or higher of our cash flow guidance for the year," said Hanes chief executive officer Gerald W Evans Jr. "The value of diversifying our portfolio with international and activewear acquisitions is evident, and we are making progress on several initiatives to adapt to the evolving and challenging retail environment in the United States."
"In the fourth quarter, we expect to once again achieve organic sales growth," Evans said. "We are continuing to drive strong double-digit online sales growth across businesses and geographies. We are making progress on our goal to use our brands, innovations, acquisitions and online investment to create shareholder value and drive sustainable growth." (RR)
Fibre2Fashion News Desk – India
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