HanesBrands Financial Results Show Strong Sales For 2016
HanesBrands has announced its fourth-quarter and full-year 2016 financial results, and its initial financial guidance for 2017. For this year, the Winston-Salem, North Carolina-based company is forecasting high-single-digit growth expectations for net sales, record cash flow from operations and growth for its operating profit and earnings. HanesBrands participates in the promotional products industry as supplier Hanes/Champion (PPAI 191138).
For the year ending Dec. 31, 2016, fourth-quarter net sales increased 12 percent to $1.58 billion and full-year net sales increased five percent to $6.03 billion. Hanes reports that sales growth was driven by acquisitions but was affected by a weaker than expected retail environment in the fourth quarter in the U.S.
“We had a strong year of sales, profit and cash flow growth with many accomplishments, including the expansion of our X-Temp product lineup, the successful launch of our Hanes FreshIQ underwear innovation, acquisition integration, and new acquisitions in Europe and Australia,” says Hanes Chief Executive Officer Gerald W. Evans Jr. “Our business model allowed us to deliver benefits to shareholders, even though our record-high financial results fell short of our expectations as a result of unanticipated fourth-quarter retail weakness. Despite the challenging environment, we were able to manage inventory and generate cash, returning nearly $550 million to shareholders through quarterly cash dividends and share repurchases. In 2017, we anticipate another record year of cash flow. As we navigate the changing consumer marketplace and the trend toward online buying, we are well positioned to generate overall growth and drive total shareholder return.”
Hanes generated $606 million in net cash from operations in 2016, which it attributes to inventory management and growth. Its inventory decreased $132 million from the end of 2015, excluding $158 million of year-end inventory added as part of acquisitions in 2016. For the year, GAAP (generally accepted accounting principles) operating profit increased 30 percent to $776 million and adjusted operating profit increased six percent to $914 million.
Looking ahead to 2017, the company expects net sales of $6.45 billion to $6.55 billion, GAAP 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.