HanesBrands Issues Second-Quarter 2017 Financial Results
Supplier HanesBrands has released its second-quarter 2017 net sales and earnings growth figures. Net sales in second quarter, which ended July 1, increased 12 percent year over year to $1.65 billion. The company notes that this growth came primarily from acquisition contributions, but organic sales trends also improved for the second quarter; it expects them to turn positive and contribute to growth in the second half.
Operating profit of $229 million in the quarter represented a three-percent increase. Excluding acquisition- and integration-related expenses, the company operating profit for the quarter rises to $255 million. Working capital improvement initiatives saw the company end the quarter with year-to-date net cash from operations of $34 million, up $163 million from the previous year.
“We continued our strong start to 2017 in the second quarter, consistent with our guidance,” says Hanes Chief Executive Officer Gerald W. Evans Jr. “Organic sales trends continued to improve sequentially, acquisitions are contributing value as expected, and our cash-flow efforts including disciplined inventory management are generating strong results. Our team is doing a great job executing our Sell More, Spend Less, Generate Cash strategies and laying the foundation for taking our performance to the next level in the years to come through our Project Booster initiative [a multi-year program to generate investment for sales growth, reduce costs and increase cash flow]. We are planning for the future while executing in the present.”
Approximately $220 million in net sales in second quarter were attributed to the company’s 2016 acquisitions, primarily Champion Europe and Hanes Australasia. Organic sales were down three percent in second quarter, which Hanesbrands attributes to expected lower sales in innerwear and domestic manage-for-cash businesses, as well as an unexpected timing shift of sports apparel sales to the third quarter.
Growth was also reported in online sales, with the channel increasing globally by approximately 25 percent to represent about nine percent of the company’s total sales, and Champion Activewear, with sales increasing seven percent in second quarter.
For 2017, Hanesbrands expects net sales of $6.45 billion to $6.55 billion, operating profit of $845 million to $895 million, adjusted operating profit excluding actions of $935 million to $975 million, and net cash from operations of $625 million to $725 million.