HanesBrands Reports Fourth-Quarter 2012 Financial Results and Provides Fiscal 2013 Guidance
Key segment highlights include:
Innerwear Segment. The Innerwear segment delivered progressively improving performance through the year resulting in record profitability in the fourth quarter and year.
- Strong Operating Profit Margins. Innerwear operating profit increased 80 percent in the fourth quarter, resulting in an operating margin of 22 percent. For the year, operating profit increased 18 percent with an operating margin of 17 percent.
- Sales Growth. Net sales increased 7 percent in the quarter and 3 percent for the year as a result of successful product innovation, new-product introductions and shelf-space gains. The rate of sales growth for the year overcame a nearly $40 million decline in sales to a mid-tier retailer that is in the midst of executing a new strategic direction. Excluding this retailer’s decline, Innerwear sales growth was 5 percent for the year.
- Brand Success. Sales of Hanes and Champion men’s underwear, Hanes panties and Bali bras all increased by double digits in the fourth quarter.
- Innovation. New products, including Hanes ComfortBlend men’s underwear, Hanes Classics slim fit and stretch premium underwear T-shirts, and Bali and Barely There Smart Size seamless bras, continue to exceed expectations.
Outerwear Segment. The Outerwear segment also had a strong fourth quarter with net sales growth of 6 percent and operating profit that more than tripled. Net sales for the year increased 2 percent. Excluding the planned exit of some branded printwear sales, Outerwear sales increased 8 percent in the fourth quarter and 6 percent for the year.
- Strong Sales Performance to Retailers. Retail sales for Hanes, including T-shirts, fleece and graphic apparel, and for Champion both increased by double digits for the year.
- Branded Printwear Impact. As expected, branded printwear profitability was adversely affected by cotton inflation in the first half of the year, and net sales for the year were affected by a strategic de-emphasis of commodity products in favor of Hanes and Champion branded products. Branded printwear sales declined by approximately $50 million for the year as a result of the de-emphasis.
International Segment. International segment results in 2012 were affected by performance issues and currency exchange rates. International segment net sales declined 1 percent for the year and operating profit declined 14 percent compared with a year ago. On a constant currency basis, net sales increased 3 percent and operating profit decreased 9 percent.