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Sales at HanesBrands increase 7% during Q4FY18

08
Feb '19
Courtesy: HanesBrands
Courtesy: HanesBrands
HanesBrands, a leading global marketer of everyday basic apparel under world-class brands, has witnessed 7 per cent improvement in its net sales to $1.77 billion for the fourth quarter of fiscal 2018. The company posted double-digit operating profit growth, operating cash flow of $502 million, and total debt reduction of $403 million during the reported period.

Sales of Innerwear basics increased 2 per cent with growth in men’s and women’s underwear. Products that feature comfort innovations continue to perform well and account for 20 per cent of basics sales. While, sales of Innerwear intimates decreased 7 per cent in the fourth quarter, although shapewear sales realised double-digit growth after the successful re-launch of the Maiden form product lineup featuring cooling innovations. The intimates' sales trend was sequentially better than the third quarter.

The company is continuing to execute its revitalisation initiatives for the intimates business, which is more concentrated in the midtier and department store channel and is affected by door closings and channel disruption. The company’s ongoing bra turnaround strategy includes expansion within the online and mass channels, increased investment, and speed-to-market initiatives.

US Activewear segment fourth-quarter sales increased 13 per cent and operating profit increased 4 per cent. Growth was driven by increased Champion sales and sales growth of American Casualwear, which consists of branded printwear sales to the screen-print industry, seasonal wholesale activewear programmes, and Alternative Apparel.

Despite adverse currency exchange rates, international segment sales increased 12 per cent and operating profit increased 28 per cent. On a run-rate basis, the international segment is now the company’s largest business segment.

"We had a strong fourth quarter with organic sales growth, margin expansion, double-digit operating profit growth, strong cash generation, and significant debt and leverage reduction," said chief executive officer Gerald W Evans Jr.

"Our diversification strategy is working. We had strong double-digit global Champion growth, International innerwear growth in Australia, Asia and the Americas, and increased sales for underwear and shapewear in the United States. Adjusted operating profit increased 10 percent, and adjusted operating margin increased 40 basis points. We generated record operating cash flow in the fourth quarter, and we paid down half a billion dollars of debt in the second half to reduce our leverage. Our outlook remains strong, including organic sales growth and significant cash flow growth expected in 2019, which underscores our progress toward achieving our long-term goals and enhancing value creation," added Evans.

For fiscal 2019, the company expects net sales around $6.885 billion-$6.985 billion, Gaap operating profit of $900 million to $930 million, adjusted operating profit excluding actions of $955 million to $985 million, GAAP EPS of $1.59 to $1.67, adjusted EPS excluding actions of $1.72 to $1.80, and net cash from operations of $700 million to $800 million.

Key assumptions in the company’s guidance include a cautious outlook for the US brick-and-mortar market, including continued door closures; continued progress in US Innerwear revitalisation initiatives; price increases and a conservative view on elasticity; negative effects of currency exchange rates; and increased marketing investment to support brand plans. (RR)

Fibre2Fashion News Desk – India


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