HanesBrands: positive results for 6th straight quarter

HanesBrands, the US innerwear and outerwear group, owner of labels such as Hanes, Champion, Playtex and Wonderbra, recently published its 2nd quarter results. For the sixth time in a row, they highlight record numbers, both in terms of sales and profitability.

However, these results are greatly due to the acquisition of DBApparel (chiefly the Dim brand) and Knights Apparel, acquired respectively in September 2014 and April 2015.

Sales for the second quarter ended July 4th show a renewed increase of 13%, reaching $1.52 billion. This sales growth is largely attributable to the incorporation of DBApparel and Knights Apparel. In fact, at constant exchange rates and adjusting for these acquisitions, sales remain at a relatively stable level (+1%).

The operating profits resulting from the costs connected to the incorporation of the acquisitions has, for its part, grown by 15%, reaching $ 265 million. The operating margin has thus remained measurably stable, increasing slightly from 17.2% to 17.4% in the course of one year. The good results in the innerwear and outerwear segments were cancelled out by the integration of DBApparel, a leading company in underwear apparel in Europe whose margins are lower.

Richard Noll, HanesBrands CEO stated: "We continue to achieve double-digit growth and (...) we are in line with our profitability expectations for the whole of the fiscal year. (...) The innovation platform we bring to our brands and our worldwide supply chain performance continues to feed the improvement in our margin."

For the whole of the fiscal year, HanesBrands expects an 11% increase in turnover, reaching nearly $ 5.9 billion, and an adjusted EBIT of between $855 and 875 million. 

Lionel Tixeire