Hanesbrands Inc. Announces First Quarter 2018 Results
Hanesbrands Inc., Winston-Salem, N.C., announced first-quarter 2018 results that exceeded company guidance for net sales, organic sales and EPS.
For the quarter ended March 31, 2018, the company reported net sales growth of 7 percent to $1.47 billion versus a guidance range of $1.42 billion to $1.44 billion. GAAP diluted earnings per share for continuing operations increased 16 percent to $0.22, compared with guidance of $0.17 to $0.20, and adjusted EPS excluding actions decreased 10 percent to $0.26, compared with guidance of $0.23 to $0.25. The EPS comparisons to last year reflect a higher corporate tax rate for 2018 as a result of U.S. tax reform.
Hanes has reiterated its full-year guidance and issued net sales and EPS guidance for the second-quarter 2018.
“We are focused on delivering quarterly results consistent with the promises we make in our guidance,” said Hanes CEO Gerald W. Evans Jr. “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. We have created powerful cash-generating global innerwear and activewear businesses that can leverage our leading market positions and brands, our robust global supply chain and our global management expertise. This is the engine for creating shareholder value.”
Acquisition Contributions and Organic Sales Growth Drive 7 Percent Net Sales Increase
Net sales for Bras N Things, acquired in February 2018, and Alternative Apparel, acquired in October 2017, totaled $32 million in the quarter. Organic sales, which exclude sales from acquisitions under a year old, increased 1 percent in constant currency, the third consecutive quarter of organic growth. Stronger-than-expected Champion sales across all geographies drove organic growth. Global Champion sales increased 22 percent in the quarter and was up 17 percent in constant currency. The Champion, Alternative and Bras N Things brands all benefit from a strong millennial consumer base.
Double-Digit Growth in Global Consumer-Directed Sales Continues
Global consumer-directed sales, consisting of company retail and online channel sales, increased 23 percent in the first quarter and represented 21 percent of total sales. Company retail sales, which includes company-owned stores and dedicated brand stores, increased 24 percent. Online channel sales, which includes company websites, traditional retailer websites and pure-play internet retailers, increased 20 percent, up in every geography.
Tax Reform Effect on EPS Comparisons
U.S. tax reform, which resulted in a higher corporate tax rate beginning in 2018, affects the year-over-year comparisons for EPS. When applying the 2018 first-quarter tax rate to 2017 first-quarter results, GAAP EPS increased 29 percent on a pro forma basis and adjusted EPS was consistent with a year ago.