The apparel retailer
) has retained its fiscal 2013 earnings guidance announced in the
second quarter earnings conference call.
The Winston-Salem, NC-based company expects full-year 2013
earnings per share to be in a range of $3.50 to $3.65. It expects
operating profits between $550 million and $575 million for the
year. It expects net sales of $4.55 billion.
HBI estimates net sales of branded print wear to decline in
the range of $40 million to $50 million for 2013. Free cash flow
is expected to be approximately within $450 million to $550
HBI had updated its fiscal 2013 guidance during the second
quarter earnings conference. Previously it expected earnings to
be in a range of $3.25 to $3.40. Operating profits was expected
to be between $500 million and $550 million. Net sales were
expected to be at $4.6 billion in fiscal 2013.
Hanesbrands had updated its guidance to reflect the decent
second half performance. However, the net sales estimate was
lowered to consider the decline of branded printwear products
during fiscal 2013.
Fiscal 2014 Guidance
HBI expects to achieve earnings in the lower end of $4.00
range in fiscal 2014. The guidance reflects 10%-15% contribution
from the Maidenform acquisition
HBI has entered into a takeover agreement of Maidenform brands
in July 2013. The deal is expected to close on Oct 8, 2013.
Maidenform sells intimate apparel, a core category of
Hanesbrands, is particularly encouraging. The acquisition will
bring Maidenform's popular brands like Flexees, Lilyette, Self
Expressions and Sweet Nothings into Hanesbrands' already-rich
Moreover, with the acquisition, Hanesbrands will be able to
expand its customer base to include the younger generation as
average-figure bra business of Maidenform targeting younger
buyers complements Hanesbrands' full-figure bra business
targeting older women.
Maidenform acquisition is expected to reap additional $500
million benefits in sales, $0.60 in earnings, $80 million of
operating profit, and $65 million of free cash flow within three
years of its completion.
Second Quarter Results
On Jul 31, Hanesbrands delivered second-quarter fiscal 2013
earnings which surpassed both prior-year quarter earnings and the
Zacks Consensus Estimate by 77.6% and 24%, respectively. The
upside was prompted by the success of HBI's Innovate-to-Elevate
strategy and lower comparable base in the prior-year quarter due
to higher cotton cost. Net sales also benefited from strong
results in the Innerwear segment.
Gross profit surged 18.7% backed by lower cost of sales
following shutdown of underperforming businesses. Lower cotton
cost benefited the company's operating profit margin which shot
up 51.3% year over year.
Hanesbrands carries a Zacks Rank #1 (Strong Buy). Other stocks
worth considering are
Michael Kors Holdings Ltd
Citi Trends Inc.
) all carrying a Zacks Rank#1 (Strong Buy).
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