HanesBrands Reports First-quarter 2013 Financial Results
Innerwear Segment: Net sales were affected by the soft retail environment, but operating margin improved significantly over a year ago. New products continued to perform well.
- Strong Operating Profit and Margin Improvement. Innerwear operating profit increased 69 percent, and operating margin increased 760 basis points to 18 percent.
- Strong Bra and Sock Sales in Soft Sales Environment. Net sales for the segment declined 2 percent overall in the quarter, but bra and sock sales increased mid-single digits and men's underwear was up slightly. Hanes ComfortBlend men's underwear, panties and socks continue to perform well, as do Bali and barely there Smart Size seamless bras.
Activewear Segment: The Activewear segment, formerly named Outerwear, had a strong first quarter, with increased margins and a return to operating profitability.
- Solid Sales. Activewear sales declined 2 percent, but excluding the $15 million planned reduction of commodity-oriented branded printwear sales to the screen-print industry, segment sales increased 4 percent. Retail Hanes sales increased by double digits, and retail Champion and C9 by Champion sales increased by low single digits.
- Strong Profitability. The segment returned to profitability, with an operating margin of 8 percent compared with an operating loss a year ago.
International Segment: International segment net sales declined 5 percent and operating profit declined by 53 percent. On a constant currency basis, net sales increased 1 percent and operating profit declined 42 percent.
Direct to Consumer Segment: Direct to Consumer sales decreased by 6 percent, while operating profit was slightly positive compared with a loss in the year-ago quarter.
For full-year 2013, Hanes expects net sales of approximately $4.6 billion; operating profit of $500 million to $550 million; and EPS of $3.25 to $3.40. The company expects a decline in branded printwear sales of $40 million to $50 million from rationalization that began in mid-2012; of the expected decline, $15 million occurred in the first quarter.