Net sales increased by 1% to US 1.22 billion for the quarter that ended on 2 April 2016. Adjusted operating profit excluding actions increased by 10% to US 147 million, and adjusted EPS excluding actions increased by 18%. On a GAAP basis, operating profit increased by 36% to US 122 million and EPS increased by 62% to US 0.21.

Record results

According to the company, the record results reflect the benefits of the company’s multiyear acquisition strategy and continued improvement in core business operating margin.

“We are off to a very good start and tracking to our plan to deliver another year of double-digit EPS growth,” said Richard A. Noll, Hanes Chairman and CEO. “We remain focused on our previously announced sales initiatives, reaping acquisition synergies, expanding margins, and developing growth plans for our pending acquisition of Champion Europe.”

Acquisition contributions

Record first-quarter results benefited from acquisitions, according to the company. Knights Apparel, the collegiate licensed activewear business acquired in April 2015, performed well in the quarter with sales of approximately US 21 million.

Hanes also continued to reap acquisition synergy benefits from the acquisitions of Maidenform, Knights Apparel and Hanes Europe Innerwear.

Innerwear and Activewear

Innerwear sales increased by 1%, and Activewear sales increased by 3%, benefiting from the acquisition of Knights Apparel while being negatively affected by the bankruptcy of a sporting goods retailer. International sales decreased by 1% as a result of adverse currency exchange rates.

Margin growth

In addition to adjusted operating profit growth, the adjusted operating profit margin increased by 110 basis points in the first quarter to 12.1% of sales. On a GAAP basis, operating profit margin for the first quarter was 10%, up from 7.4% in the year-ago quarter.

2016 financial guidance

Hanes has reaffirmed its financial guidance for full-year 2016. For 2016, the company continues to expect net sales of US 5.8 billion to US 5.9 billion; adjusted operating profit of US 920 million to US 950 million; adjusted EPS of US 1.85 to US 1.91; and record net cash from operations of US 750 million to US 850 million.

The guidance reflects benefits from the acquisitions of Maidenform, Knights Apparel and Hanes Europe Innerwear, which are expected to add US 40 million in synergies in 2016.

The company expects net capital expenditures to be approximately US 70 million. Interest expense and other expenses are expected to be approximately US 115 million to US 120 million combined. The 2016 full-year tax rate is expected to be approximately 10% to 11%.

www.hanes.com