The company’s guidance for continuing operations is based on the following facts. Product pricing, shelf space, and promotion plans for the remainder of 2012 have been finalized with major retail accounts. Virtually all commodity costs have been fixed for the remainder of the year, with the company incurring significantly lower cotton and other inflation impacts in the second half of the year. The majority of sales trends have been substantially tracking to expectations, with the notable exception of a major mid-tier retail account that is undergoing a major strategic shift. Approximately $8 million of company costs, primarily from supply chain restructuring, that had been expected in the second quarter are now expected to occur in the second half.For margins, Hanes expects continued sequential quarter improvement in gross and operating margins in the third and fourth quarters as the company overlaps last year’s progressively higher cotton costs with this year’s declining cotton costs. Gross margin percentages in the second half are expected to average in the low to mid-30s, while operating margins are expected to average approximately 12.5 percent to 13 percent.
HanesBrands Reports Second-Quarter 2012 Results
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