Net sales rise 3% at HanesBrands in Q3 FY'12

Hanes’ revised 2012 full-year guidance for continuing operations is diluted EPS of $2.54 to $2.60, compared with previous guidance of $2.50 to $2.60. Net sales are expected to increase approximately 2 percent to approximately $4.52 billion, compared with previous guidance of $4.52 billion to $4.57 billion. Full-year free cash flow is expected to be approximately $500 million, the high end of the previous range of $400 million to $500 million.

The corresponding guidance for the fourth-quarter is net sales of approximately $1.13 billion to $1.17 billion and EPS of $1.00 to $1.06. The company expects a gross margin percentage in the mid-30s and an operating profit margin of slightly more than 13 percent. Interest expense is expected to be approximately $33 million, and the effective tax rate is expected to be in the midteens.

The company’s guidance for continuing operations is based on the following facts. Product pricing, shelf space, and promotion plans for the remainder of 2012 have been finalized with major retail accounts. All commodity costs have been fixed for the remainder of the year, with the company incurring significantly lower cotton and other inflation impacts for the remainder of the year.

The company will continue to focus its use of free cash flow on debt retirement. In 2012, the company retired all of its approximately $300 million of floating rate notes. For 2013, the company remains committed to prepaying all of its $500 million of 8 percent fixed-rate notes.

The company continues to believe that a reasonable estimate of EPS potential in 2013 is in the low $3 range.

Discontinued Operations

In May 2012, the company announced exiting certain international and domestic imagewear businesses that are all now classified as discontinued operations.

On May 30, Hanes sold its European imagewear business, and the company has substantially completed the discontinuation of its private-label and Outer Banks domestic imagewear operations serving wholesalers that sell to the screen-print industry. In accordance with GAAP requirements, the company reported results for the second and third quarters on a continuing-operations basis and revised prior-period results to reflect continuing operations. The company’s branded printwear operations will continue to operate and serve the branded domestic screen-print market.

HanesBrands is a socially responsible leading marketer of everyday basic apparel under some of the world’s strongest apparel brands, including Hanes, Champion, Playtex, Bali, JMS/Just My Size, barely there, Wonderbra and Gear for Sports.

HanesBrands