HanesBrands Releases 2016 Financials Showing Record Net Sales
HanesBrands has announced its fourth-quarter and full-year 2016 results, highlighting its record net sales, operating profit and diluted earnings per share (EPS), and record annual operating cash flow of $606 million. The Winston-Salem, North Carolina-based company, which participates in the promotional products industry as supplier Hanes/Champion (PPAI 191138), has also announced initial financial guidance for 2017, forecasting net sales growth in the high single-digits, record cash flow, and further growth in its operating profit and EPS.
For the year ending December 31, 2016, HanesBrands’ fourth-quarter net sales grew 12 percent to $1.58 billion while full-year sales increased five percent to $6.03 billion. The company attributes this growth to acquisitions as the retail environment in the U.S. was weaker than expected. Its fourth-quarter EPS of $0.41 increased 37 percent and the full-year EPS of $1.40 increased 32 percent. Excluding pretax charges related to acquisitions and integrations, adjusted EPS of $0.53 in the fourth quarter increased 20 percent and full-year adjusted EPS of $1.85 increased 11 percent.
“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 HanesFreshIQ 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.”
He adds that despite the challenging environment, the company was able to manage inventory and generate cash, returning nearly $550 million to shareholders through quarterly cash dividends and share repurchases. In 2017, he anticipates 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,” he says.
HanesBrands’ guidance for 2017 is based on acquisition contributions, growth opportunities, the effect of the ongoing consumer shift toward online purchases, and negative currency impacts that the company expects will dampen growth of international segment sales and operating profit. It expects 2017 net sales of $6.45 to $6.55 billion, operating profit of $845 to $895 million, and net cash from operations of $625 to $725 million.
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