Hanesbrands Inc, a leading marketer of innerwear, outerwear and hosiery apparel, reported results for the quarter ended Sept. 30, 2006.
Hanesbrands began operating as an independent publicly traded company on Sept. 5, 2006. During the 13-week quarter, Hanesbrands operated for approximately 9 1/2 weeks as Sara Lee Corporation's branded apparel business in the Americas and Asia.
"We are pleased to have successfully completed our spinoff in the quarter and are focused on driving results, executing our strategies and establishing the base from which to achieve our long-term growth goals," Hanesbrands Chief Executive Officer Richard A. Noll said.
"Our year-over-year sales decline was expected due to the exit from low-margin sales and as a result of continued sheer hosiery sales declines that are following a decade-long downward trend," Noll said. "Core sales were generally consistent with last year."
Excluding costs for the spinoff and restructuring in the current and year-ago quarters, operating profit increased by 15.7 percent to $124.6 million from $107.7 million a year ago.
The increase in adjusted operating profit was a result of reduced corporate allocations associated with Sara Lee ownership, the benefits of previous cost-reduction actions and beneficial timing of certain costs between the September and December quarters.
Interest expense increased in the September quarter to $17.6 million from $4.1 million a year ago. The increase is a result of higher debt incurred 3 1/2 weeks before the end of the quarter as a result of the spinoff from Sara Lee Corporation. Long-term debt at the end of the quarter was $2.6 billion.
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