HanesBrands Reports Fourth-Quarter 2013 Financial Results
On Jan. 29, 2014, HanesBrands, Winston-Salem, N.C., a leading marketer of everyday basic apparel under world-class brands, reported record financial results in 2013 for net sales, operating profit and profit margin, cash flow, and diluted earnings per share.
The company closed the year with a strong fourth quarter and has substantially raised its 2014 full-year EPS guidance.
Net sales in the fourth quarter increased 12 percent to $1.29 billion compared with the year-ago quarter. The acquisition of Maidenform Brands Inc., contributed 9 percentage points of sales growth in the quarter, while strong results for the remainder of the company contributed 3 percentage points of growth. For the full year, net sales increased 2 percent to $4.63 billion, while on a constant-currency basis, net sales increased 3 percent.
Adjusted EPS for the year increased 49 percent to $3.91 from $2.62 in 2012. For the fourth quarter, adjusted EPS of $0.98 beat company guidance. Planned increases in advertising and debt-reduction costs muted fourth-quarter performance compared with the year-ago quarter's adjusted EPS of $1.07. On a GAAP basis, diluted EPS was $0.32 in the quarter versus $0.78 a year ago and was $3.25 for the year, up from $2.32 a year ago.
(Adjusted performance measures and comparisons exclude fourth-quarter 2013 charges related to the acquisition of Maidenform Brands, other action-related charges in the fourth quarter of 2013, debt actions in the fourth quarter of 2012, and reflect continuing operations for 2012. See sections on discontinued operations and GAAP reconciliation.)
The company earned record adjusted operating profit of $596 million in 2013 for an adjusted operating margin of 12.9 percent, up 320 basis points. Improved profitability resulted from lower cotton costs and benefits of the company's Innovate-to-Elevate initiatives. On a GAAP basis, operating profit for the quarter was $72 million, compared with $153 million a year ago, and for full-year 2013 was $515 million, up from $440 million, for an operating margin of 11.1 percent compared with 9.7 percent.
For 2014, Hanes has increased its full-year guidance to expected net sales of slightly less than $5.1 billion; adjusted operating profit of $640 million to $660 million; adjusted EPS of $4.60 to $4.80; and net cash from operating activities of $450 million to $550 million.
"We had an outstanding year in 2013 with four consecutive quarters of strong performance. We achieved record results and reached significant milestones, including generating nearly $600 million of cash from operations," Hanes Chairman and Chief Executive Officer Richard A. Noll said. "We are raising our 2014 earnings guidance because we are increasingly confident that the momentum of our Innovate-to-Elevate strategy will deliver even better results. The combination of our brand power, low-cost supply chain and innovation platforms is generating value and growth opportunities."
For the full release, visit the HanesBrands investors' site.