HanesBrands reports higher-than-expected sales off back of new acquisitions
Winston-Salem, North Carolina-based apparel group HanesBrands posted its results for the first quarter ended March 31, 2018 on Tuesday, with sales benefitting from the positive impact of recent acquisitions and the strong international performance of the company’s Champion brand.
Net sales for the period totaled a higher-than-expected $1.47 Billion, up 7% (1% in constant currencies), versus a guidance range of $1.42 billion to $1.44 billion. Diluted earnings per share rose 16% to $0.22, compared with an outlook of $0.17 to $0.20.
This growth was pushed by the performances of new brands in Hanes’ portfolio, Bras N Things and Alternative Apparel, acquired in February 2018 and October 2017, respectively, which together contributed net sales of $32 million in the quarter.
The group’s millennial-friendly Champion brand also proved to be a strong card in Hanes’ hand, with global net sales increasing 22% (17% in constant currencies), contributing to the company’s strong international performance in the quarter.
Indeed, overall global sales rose 19% with operating profit up 46% thanks, in part, to a favorable exchange rate, as well as synergies from past acquisitions.
This helped to offset a somewhat disappointing performance in the US where innerwear sales slipped 3% and operating profit fell 13%. Activewear sales, however, rose 6% in the region, buoyed by the Alternative Apparel acquisition.
Broken down by channel, Hanes’ global consumer-directed sales were up 23% during the period, representing 21% of total sales, while company retail sales increased 24% and online channels saw a 20% rise.
“We are focused on delivering quarterly results consistent with the promises we make in our guidance,” said Hanes CEO Gerald W. Evans Jr in a release. “We’re off to a good start. We are reaping ongoing benefits from diversifying our business through geographic expansion, Champion brand growth globally, and increased sales in the online channel.”
In light of its first quarter results, HanesBrands reiterated its previously reported full-year outlook of net sales of between $6.72 billion and $6.82 billion, and operating profit somewhere from $870 million to $905 million, and also issued guidance for Q2 2018.
In the second quarter, the company expects to see net sales in the range of $1.7 billion to $1.725 billion.
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