News Flash

'We are trending in the right direction' - Hanesbrands Chairman

31 Jul '09

5 min read

- GAAP operating profit was $84.1 million in the quarter, down from $113.1 million a year ago.
Hanesbrands was able to protect its margins through cost-reduction efforts despite sales declines. The second-quarter's operating profit margin excluding actions was 9.8 percent, which was better than the 2008 full-year operating profit margin excluding actions of 9.7 percent.
- Hanesbrands ended the quarter with inventory of $1.23 billion, down $56 million from the beginning of the year and in line with the company's plan to reduce its year-end inventory to $1.15 billion or less. Inventory reduction supports Hanesbrands' goal to reduce long-term debt by $300 million in 2009.

“We are very pleased with our ability to protect margins in this economic climate,” Hanesbrands Executive Vice President and Chief Financial Officer E. Lee Wyatt said. “This is a significant achievement. We are tightly managing our SG&A and are executing on the business model that we laid out for this year, which includes inventory and debt reduction.”

Other Comments
Hanesbrands continues to leverage the strength of its brands and the company's marketing investments. In April, Hanesbrands entered a multiyear agreement with a major mass merchandise retailer to become the exclusive supplier of plus-sized T-shirts, fleece and other outerwear apparel through its Just My Size brand across all the retailer's doors.

In August, Hanesbrands will begin shipping Playtex 18-hour bras to a national department store chain, increasing the brand's leading distribution in the United States to the mass, mid-tier and department store channels.

Continued marketing investment in Hanes is allowing the brand to continue to broaden distribution with space and share gains in the important mid-tier retailer channel. For example, Hanes is launching new innerwear programs beginning in January 2010 in two major national mid-tier store chains. The Champion brand is also capitalizing on its strength as evidenced by increased penetration of the sporting-goods and department-store channels, including new programs in 2010.

These continued investments in driving big brands through key items play an important role as the company strives to reach its long-term growth goals.

“Our strategies are working, and the year is progressing as we expected,” Noll said. “We are successfully navigating the recession, and we are nearing the startup of our Asian fabric manufacturing plant in Nanjing, China, as we seek to generate growth momentum going into 2010.”

Hanesbrands Inc.

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