Hanesbrands Inc. Has Record-breaking Second Quarter
Hanesbrands, Winston-Salem, N.C., attributed its strong second quarter numbers to its Maidenform Brands Inc. acquisition, activewear performance and increased operating efficiencies.
The quarter that ended June 28 netted a 12 percent sales increase to $1.34 billion as a result of the company’s Innovate-to-Elevate strategy; strong activewear segment results; increased supply chain manufacturing efficiencies; tight control of selling, general and administrative costs; and successful integration of the October 2013 Maidenform acquisition. Hanesbrands expects net sales to reach more than $5 billion this year.
“Our record first-half results are a testament to the value we are creating through our Innovate-to-Elevate, self-owned supply chain, and acquisition strategies,” Hanesbrands CEO Richard A. Noll said. “We remain confident in our business model and our performance momentum. We increased our operating profit margin by 200 basis points in the first half, and we raised our full-year EPS [earnings per share] guidance for the second quarter in succession.”
The Innovate-to-Elevate strategy harnesses synergies by combining brand power, supply chain leverage and product innovation platforms. This helped to increase the adjusted operating profit margin 17.2 percent, a second-quarter record.
Other accomplishments include sales growth in each business segment, including significant contributions from activewear growth and Maidenform benefits to each segment. Activewear net sales increased 8 percent while operating profit margin reached a record 14.4 percent operating profit margin in the second quarter Maidenform contributed about $141 million in net sales during the second quarter.
“Our innovation strategy is succeeding, our supply chain is a competitive advantage, and we have developed strong integration capabilities,” said Richard D. Moss, Hanesbrands chief financial officer. “We are achieving SG&A [selling, general and administrative expenses] savings from the Maidenform integration ahead of schedule, and we have announced our intention to acquire DBApparel of Europe. The soundness of our strategies coupled with our strong balance sheet and disciplined use of free cash flow gives us confidence in the value-creation potential of our business model for many years to come.”