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HanesBrands (NYSE: HBI), a leading marketer of everyday branded basic apparel, today reported significantly higher second-quarter 2013 earnings and margins on 2 percent net sales growth.
For the quarter ended June 29, 2013, net sales increased 2 percent to $1.2 billion, operating profit increased 51 percent to $181.4 million, and diluted earnings per share increased 78 percent to $1.19 from $0.67 a year ago. (Unless noted, all performance measures for the year-ago period are for continuing operations. See discontinued operations section in this press release.)
The company’s Innovate-to-Elevate platforms, which integrate the strengths of the company’s iconic brands, low-cost supply chain and product innovation, continue to help drive results, while the year-ago quarter had substantially higher cotton costs.
While the sales increase reflected a soft retail sales environment, gross and operating margins were strong, each up by approximately 500 basis points. Operating margins increased in each of the company’s four business segments with Activewear achieving record double-digit margins for the second quarter and the first half.
Based on year-to-date results and the economic environment, Hanes has increased its 2013 guidance for EPS, operating profit and free cash flow, while slightly lowering expectations for sales. The company’s new full-year guidance anticipates net sales of approximately $4.55 billion; operating profit of $550 million to $575 million; EPS of $3.50 to $3.65; and free cash flow of $450 million to $550 million.
“We achieved record profit margins and EPS in the second quarter with each business segment achieving improved profitability,” Hanes Chairman and CEO Richard A. Noll said. “Our Innovate-to-Elevate platforms continue to excel and are quickly delivering results for us and our retail partners. We are on solid footing to continue to deliver value for consumers, retailers and investors. We have moved into the low end of our target range for sustained operating profitability sooner than anticipated, and our cash flow and solid balance sheet have allowed us to begin paying quarterly dividends and agree to acquire Maidenform Brands.”