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Knitting Industry

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HanesBrands reports income decline in Q2 2016

Consistent with the company’s expectations, net sales also decreased by 3% to US$ 1.47 billion for the quarter that ended this month.

3rd August 2016

Knitting Industry
 |  Winston-Salem, NC

Knitted Outerwear, Sports/​Activewear

“We are confident in our plans for the year, with our sales, operating profit and EPS performance all tracking right in line with our expectations and consistent with our full-year guidance,” said Hanes Chief Operating Officer and CEO-Elect Gerald W. Evans Jr.

“The second quarter, while having a tough comparison as expected to a strong year-ago quarter, came in on plan overall. Our growth initiatives for the second half are unfolding as planned and are tracking to our full-year guidance of 8% growth in net sales at the midpoint and double-digit growth in EPS.”


Consistent with the company’s expectations, net sales decreased by 3% to US$ 1.47 billion for the quarter that ended this month, as a result of comparisons with strong performance in the year-ago quarter that included expanded shelf space for product launches.

On a GAAP basis, operating profit of US$ 221 million increased by 59%. When excluding pretax charges related to acquisitions, integrations and other actions, and debt refinancing, adjusted operating profit of US$ 246 million decreased by 7%, and adjusted EPS of US$ 0.51 increased by 2%.

The second-quarter and year-to-date results are in line with the company’s plans and consistent with the underlying assumptions for the company’s full-year 2016 guidance. The company has updated 2016 GAAP guidance for operating profit and EPS and has reaffirmed 2016 guidance for net sales, adjusted operating profit, adjusted EPS, and net cash from operations.

Acquisition contributions

Hanes continues to derive benefits and synergies from the Maidenform, Knights Apparel, Hanes Europe Innerwear, and Champion Japan acquisitions and integrations. Additionally, the company completed its acquisition of Champion Europe on 30 June 2016, during the second quarter, and completed its acquisition of Pacific Brands Limited of Australia on 14 July 2016.

Financial guidance 2016

Based on year-to-date results and expectations for the second half, Hanes has reaffirmed its full-year guidance for net sales and net cash from operations, updated its GAAP guidance for operating profit and EPS, and reaffirmed its guidance for non-GAAP adjusted operating profit and EPS.

The company’s 2016 guidance calls for net sales of US$ 6.15 billion to US$ 6.25 billion, GAAP operating profit of US$ 760 million to US$ 795 million, adjusted operating profit of US$ 940 million to US$ 975 million, GAAP EPS of US$ 1.44 to US$ 1.54, adjusted EPS of US$ 1.89 to US$ 1.95, and net cash from operations of US$ 750 million to US$ 850 million.

The company’s guidance incorporates expectations for the acquisitions of Champion Europe and Pacific Brands. The timing and seasonality of these acquisitions will favour the fourth-quarter versus the third-quarter, the company reports. Approximately 55% of the net sales contributions from these acquisitions for 2016 will occur in the fourth-quarter, and the entire EPS contribution occurs in the fourth quarter.

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