HanesBrands boosts Q4 profits despite slipping sales
Winston-Salem, North Carolina-based apparel group HanesBrands saw a 1% decrease in revenues in the fourth quarter on Friday, as sales in its innerwear and activewear segments declined, but managed to achieve solid growth in its earnings.
As reported by the company on Friday, HanesBrands’ net sales for the fourth quarter ended December 28, 2019, totaled $1.75 billion, down from $1.77 billion in the same quarter in the previous year. Constant currency sales in the period “increased slightly.”
The decline was driven by decreases in sales in both the group’s activewear and innerwear segments. Activewear net sales totaled $543.0 million, down 6.7% compared to the prior-year period, while innerwear sales fell 4.1% to $569.6 million.
The company’s international segment, however, did see an increase of 6.9% in its sales, which totaled $650.8 million, reflecting growth across all of the regions in which the group has operations.
The Champion brand, which has proved to be a real bright spot in HanesBrands’ portfolio, boasted a 22% increase in its sales both domestically and internationally, while another highlight was cross-company consumer-directed sales, which saw a 17% rise in constant currencies.
Quarterly net income was $185.0 million, up from $150.0 million in the prior-year period, while diluted earnings per share (EPS) rose 24%, from $0.41 to $0.51.
“HanesBrands delivered a solid fourth quarter right in line with our guidance and concluded a very successful year with record operating cash flow, significantly reduced debt, continued organic revenue growth, and strong underlying business fundamentals,” commented the company’s CEO, Gerald W. Evans Jr., in a release.
For the full year fiscal 2019, HanesBrands reported an increase of 2% in its net sales, which totaled $6.97 billion, up from $6.80 billion in the previous year.
The Champion brand made a contribution of $1.9 billion to these annual sales, representing an increase of 40% compared to the previous year, excluding C9 Champion sales in the U.S. mass channel, the wind-down of this business having concluded in January 2020.
The company’s annual net income totaled $600.7 million, up from $539.7 million in the previous year, while EPS increased 11% to $1.64, up from $1.48.
Looking forward to next year, HanesBrands expects annual sales in 2020 to total between $6.68 billion and $6.78 billion, while EPS is predicted to be in the range of $1.60 to $1.68.
In the first quarter, the company expects to report net sales of between $1.466 billion and $1.496 billion, and EPS of between $0.17 and $0.20.
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