HanesBrands, a leading marketer of everyday basic apparel, has reported record results for the second consecutive year for net sales, adjusted operating profit, and adjusted diluted earnings per share.

For full-year 2014, net sales increased by 15%, adjusted operating profit grew by 28%, and adjusted EPS increased by 45%. The company’s record results and strong fourth-quarter performance were driven by great supply chain manufacturing performance, benefits from the acquisitions of Maidenform Brands and DBApparel, and continued strong contributions from Innovate-to-Elevate product platforms.

“We are in the midst of a multiyear period of strong growth supported by our powerful company-owned global supply chain, Innovate-to-Elevate product platforms, and acquisitions,” said Richard A. Noll, Hanes Chairman and Chief Executive Officer. “Our guidance for 2015 translates into another year of double-digit EPS growth and what would be another record year for sales, profit and EPS, despite the challenges of currency exchange rates.”

Key figures

Net sales for the fourth quarter increased by 18% to US 1.52 billion compared with the year-ago quarter, and full-year sales of US 5.32 billion increased by 15%.

Adjusted EPS in the fourth quarter increased by 49% to US 1.46, and adjusted EPS for the year increased by 45% to US 5.66 from US 3.91 in 2013.

Sales growth

Net sales growth was at least high single digits for each business segment in 2014. Innovate-to-Elevate product platforms continue to perform well, including Hanes ComfortBlend underwear, Hanes X-Temp and Champion Vapor fabrics, and ComfortFlex Fit bras. With the exception of Activewear, each segment benefitted from acquisition contributions to sales growth.

Successful acquisitions and integrations

Hanes completed the integration of Maidenform within one year of the acquisition closing in fall 2013. The first Maidenform products developed wholly within the Hanes product development process are scheduled to debut in 2015. For 2014, the Maidenform acquisition contributed US 491 million in net sales.

Hanes also closed on the acquisition of DBApparel, a leading marketer of intimate apparel and underwear in Europe, on 29 August 2014. Integration is under way, and Hanes continues to expect DBA’s annual operating profit to reach EUR 100 million within three to four years through synergies, global supply chain leverage, and Innovate-to-Elevate benefits. For 2014, the DBA acquisition contributed net sales of US 210 million in the fourth quarter and US 291 million for the year.

Key segment highlights

Innerwear net sales increased by 11% for the full year. Operating profit increased by 17% in the fourth quarter and the full year.

The company’s innovation platforms continue to perform well, and the company’s primarily company-owned supply chain continues to drive benefits from increased scale and improvement initiatives.

Activewear net sales increased by 10% in the fourth quarter and 8% for the full year. Champion sales, excluding those at mass retail, increased by more than 20%. Operating profit increased by 10% in the quarter and 14% for the full year.

International sales and operating profit increased significantly as a result of acquisitions, but currency had a significant impact on results. On a constant-currency basis, International net sales increased by 157% in the fourth quarter and 68% for the full year.

The Direct to Consumer segment achieved significantly improved profitability for the second consecutive year. Net sales increased by 1% in the fourth quarter and operating profit increased by 29%. For the full year, net sales increased by 8%, with an operating profit increase of 17%.

2015 Financial Guidance

Hanes has issued full-year 2015 growth expectations and financial guidance. Incorporated into the company’s outlook are the expected negative effects of foreign currency exchange rates and Target Canada Co.’s announced plans to liquidate.

For 2015, Hanes expects net sales of approximately US 5.775 billion to US 5.825 billion. The company also expects adjusted operating profit excluding actions of US 835 million to US 855 million; pre-split adjusted EPS excluding actions of US 6.30 to US 6.50; and net cash from operating activities of US 550 million to US 600 million.

www.hanes.com