HanesBrands Reports Second-Quarter 2011 Results and Confirms Full-Year 2011 Guidance for Sales and EPS Growth
HanesBrands, Winston-Salem, N.C., reported strong net sales growth and comparable diluted earnings per share in the second quarter of 2011, in line with company expectations.
Diluted EPS for the second quarter was $0.87, the same as a year ago when EPS benefited by $0.20 from a lower income tax rate. Net sales for the second quarter increased nearly 14 percent to $1.23 billion, with sales gains in all business segments and particularly strong growth in the Outerwear and International segments.
Hanes has confirmed its full-year 2011 diluted EPS guidance of $2.70 to $2.90 and net sales guidance of $4.9 billion to $5 billion. The guidance represents EPS growth over 2010 of 25 percent to 34 percent and net sales growth of 14 percent to 16 percent.
"We continued our strong start in 2011 and are performing in line with our growth expectations," Hanes chairman and chief executive officer Richard A. Noll said. "Our brand strength, international expansion and acquisition contributions have driven six consecutive quarters of accelerating sales growth. We are leveraging this sales growth with our low-cost global supply chain and tight control of selling, general and administrative costs."
Financial Highlights and Business Segment Summary
Growth in the quarter was driven by sales increases in each business segment, including strong double-digit increases in the International segment as well as the Outerwear segment, which benefited from last November's acquisition of Gear For Sports.
The second-quarter operating margin increased 70 basis points over the year-ago quarter, despite $51 million in higher cotton and commodity costs and an operating profit decline in the Innerwear segment. The company's operating margin in the quarter improved to 12.1 percent of sales, the highest since the company's spinoff in September 2006.
About HanesBrands: HanesBrands is a socially responsible leading marketer of everyday basic apparel under some of the world's strongest apparel brands, including Hanes, Champion, Playtex, Bali, JMS/Just My Size, barely there, Wonderbra and Gear For Sports. The company sells T-shirts, bras, panties, men's underwear, children's underwear, socks, hosiery, casualwear and activewear produced in the company's low-cost global supply chain. Hanes has approximately 55,000 employees in more than 25 countries and takes pride in its strong reputation for ethical business practices. More information about the company and its corporate social responsibility initiatives, including environmental, social compliance and community improvement achievements, may be found on the Hanes corporate website at www.hanesbrands.com. Hanes is a U.S. Environmental Protection Agency Energy Star Partner of the Year for 2010 and 2011 and ranks No. 91 on Newsweek magazine's Top 500 greenest U.S. company rankings.