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Q1 2014 Earnings Call
April 24, 2014 4:30 pm ET
Richard A. Noll - Chairman and Chief Executive Officer
Gerald W. Evans - Chief Operating Officer
Richard D. Moss - Chief Financial Officer
Matthew McClintock - Barclays Capital, Research Division
Eric B. Tracy - Janney Montgomery Scott LLC, Research Division
Susan K. Anderson - FBR Capital Markets & Co., Research Division
Omar Saad - ISI Group Inc., Research Division
Robert Scott Drbul - Barclays Capital, Research Division
David J. Glick - The Buckingham Research Group Incorporated
Steven Louis Marotta - CL King & Associates, Inc., Research Division
Jim Duffy - Stifel, Nicolaus & Company, Incorporated, Research Division
Danielle McCoy - Brean Capital LLC, Research Division
Carla Casella - JP Morgan Chase & Co, Research Division
Previous Statements by HBI
» Hanesbrands Management Discusses Q4 2013 Results - Earnings Call Transcript
» Q4 2013 Hanesbrand Inc Earnings Conference call (Webcast)
» Hanesbrands Management Discusses Q3 2013 Results - Earnings Call Transcript
Good afternoon, everyone, and welcome to the HanesBrands quarterly investor conference call and webcast. We are pleased to be here today to provide an update on our progress after the first quarter of 2014. Hopefully, everyone has had a chance to review the news release we issued earlier today. The news release and the audio replay of the webcast of this call can be found in the Investors section of our hanes.com website.
I want to remind everyone that we may make forward-looking statements on the call today, either in our prepared remarks or in the associated question-and-answer session. These statements are based on current expectations or beliefs and are subject to certain risks and uncertainties that may cause actual results to differ materially. These risks are detailed in our various filings with the SEC, such as our most recent forms 10-K and 10-Q, and may be found on our website as well as in our news releases and other communications. The company does not undertake to update or revise any forward-looking statements, which speak only to the time at which they are made.
Unless otherwise noted, today's references to our consolidated financial results, as well as our 2014 guidance, exclude all one-time charges and expenses. Additional information, including a reconciliation of these and other non-GAAP performance measures to GAAP, can be found in today's press release, which is available in the Investors section of our hanes.com website.
With me on the call today are Rich Noll, our Chief Executive Officer; Gerald Evans, our Chief Operating Officer; and Rick Moss, our Chief Financial Officer. For today's call, Rich will highlight a few big picture themes, Gerald will provide an update on the Maidenform integration and Rick will emphasize some of the financial aspects of our results.
I will now turn the call over to Rich.
Richard A. Noll
Thank you, T.C. The first quarter was another great quarter for HanesBrands. Our business continues to do extremely well, our Innovate-to-Elevate strategy is driving higher levels of profitability and we're beginning to see the benefits from bolt-on acquisitions.
For the quarter, we grew revenue 12%, operating profit 34% and EPS 49%, once again demonstrating our ability to magnify our sales growth into faster operating profit growth and even faster earnings per share growth. The fact that we're delivering strong results in a challenging consumer environment is a testament to our strong consumer franchise, the success of our Innovate-to-Elevate strategy and our ability to effectively deploy our cash flow.
And we're not done. You've heard me say this before but it's worth highlighting again. With the strength of our cash flow and the ability to cascade Innovate-to-Elevate throughout our entire organization, we believe you're only beginning to see the earnings potential of our business.
As we look to the remainder of 2014, we're confident the momentum in Innovate-to-Elevate can continue and the profit contribution from Maidenform will continue to grow. We are reflecting this confidence by raising our full year EPS guidance $0.20 to a range of $4.80 to $5 per share.
The integration of Maidenform is going extremely well, and I couldn't be happier with our progress. Gerald will focus his entire remarks on the integration. But before he does, let me take a minute to update you on the trends within our core business.
For the quarter, revenue, excluding Maidenform, was roughly flat on a constant currency basis, a very solid achievement given the current consumer environment. Innovate-to-Elevate continued to drive our Activewear business, where sales were up 10% over last year driven by our Champion brand, and operating profit was up 50%.
Within Innerwear, the significant weather in the quarter, along with the Easter shift, clearly impacted results. Excluding Maidenform, retail sell-through declined approximately 2% for the quarter. As retailers adjusted their inventories, our shipments declined 6%. However, given the replenishment nature of the Innerwear business, we expect much of this decline to reverse over the year. In fact, April's point-of-sale trends have already rebounded, running at mid-single-digit increases.
Turning to international, we had a very solid quarter. On a constant currency basis and excluding Maidenform, sales increased approximately 8%. We continue to make good progress with our regionalization strategy, where we are leveraging the tremendous scale and capabilities of our domestic business.
Lastly, our profit margins are at record first quarter levels and are exceeding our expectations due to the great success of our Innovate-to-Elevate strategy in Champion, superb performance from our supply chain and a slight beat [ph] in Maidenform.