Hanesbrands Inc.
(
HBI
) reported fourth quarter 2012 earnings per share of $1.07, which
was more than double than the prior year quarter earnings on the
back of strong sales. The adjusted earnings excluded bond
prepayment expenses of 30 cents per share. Earnings beat the
Zacks Consensus Estimate of $1.00 per share.
For the full year 2012, earnings per share went up 7% to
$2.62, driven by strong performance of the innerwear segment.
Full year earnings also beat the Zacks Consensus Estimate of
$2.54. Operating profit went up 18%.
Revenues and Operating Profits
Quarterly revenues were up 5% to $1.15 billion, driven by
sales growth in both Innerwear and Outerwear segments. Revenues
surpassed the Zacks Consensus Estimate of $997 million.
The gross profit surged 21.3% year over year to $398.1 million
but gross profit margin shrank 470 basis points to 34.5% in the
fourth quarter. The increase in gross profit dollars resulted
from positive pricing and shutdown of underperforming
businesses.
Operating profit in the quarter more than doubled to $153.0
million, driven by lower selling, general and administrative
expenses. Operating profit margin expanded 660 basis points to
13.4%.
Segment Details
Innerwear Segment
: Net revenue for the Innerwear segment increased 6.6% year over
year to $585.7 million in the reported quarter. The increase came
on the back of new and successful product innovation and decent
performance of men's underwear and women's panties.
The company introduced new products like
Hanes
and
Champion
men's underwear,
Hanes
panties and
Bali
bras which helped it to gain shelf space. Operating profit in the
segment shot up 79.6% year on year to $127.0 million.
Outerwear segment:
Outerwear segment sales climbed 5.8% from the year-ago period to
$337.0 million, driven by strong sales of
Hanes
branded products, including T-shirts, fleece and graphic apparel,
as well as
Champion
branded products. Results were partially impacted by the decline
in branded printwear sales, which the company is the process of
phasing out. Outerwear segment operating profit more than doubled
to $37.0 million during the quarter.
International segment
: Net sales in the International segment inched up 0.8% to $136.6
million in the quarter. Foreign exchange headwinds primarily hurt
the segment results. Excluding currency, revenues in this segment
increased 3% in the quarter. Operating profit, however, jumped
14.2% to $12.26 million in this segment.
Direct to Consumer segment
: Direct to Consumer segment sales declined 3.7% to $94.0 million
and operating profit increased 27.3% to
$9.3 million in
the quarter.
Other Financial Updates
The company exited the fourth quarter of 2012 with cash and
cash equivalents of $42.8 million compared with $39.7 million in
the previous quarter. Long-term debt was $1.3 billion compared
with $1.5 billion in the fourth quarter of 2012. The company
ended the year with $1.32 billion in long-term debt.
Guidance
For fiscal 2013, the company expects earnings $3.25 - $3.40
per share. The company expects net sales to be $4.6 billion. The
company estimates net sales of branded printwear sales to decline
by $40 million to $50 million, with around half the decline
expected in the first quarter. Operating profit is expected to be
between $500 million to $550 million. Free cash flow is expected
to be approximately $350 million to $450 million.
Headquartered in Winston-Salem, North Carolina, Hanesbrands
engages in the marketing of innerwear, outerwear and hosiery
apparel and carries a Zacks Rank # 3 (Hold). Other companies in
the same industry are
Michael Kors Holding Limited
(
KORS
), which has a Zacks Rank #1 (Strong Buy),
Joe's Jeans Inc.
(
JOEZ
) and
Ralph Lauren Corporation
(
RL
), both of which have a Zacks Rank #2 (Buy)
HANESBRANDS INC (HBI): Free Stock Analysis
Report
JOES JEANS INC (JOEZ): Free Stock Analysis
Report
MICHAEL KORS (KORS): Free Stock Analysis
Report
RALPH LAUREN CP (RL): Free Stock Analysis
Report
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