05/09/24
8:30 am EDT
Most Recent
Press Release
HanesBrands Announces Strong Second-Quarter 2021 Results
HanesBrands Announces Strong Second-Quarter 2021 Results
August 5, 2021 at 6:00 AM EDT
Revenue, operating profit, operating margin and EPS from continuing operations exceed guidance
-
Net sales from continuing operations of
$1.75 billion , up 13% over prior year; up 15% over second-quarter 2019 -
GAAP EPS from continuing operations of
$0.42 ; adjusted EPS from continuing operations of$0.47 -
Growth driven by global Champion brand and
U.S. Innerwear - Global Champion sales up more than 120% over prior year and 21% over second-quarter 2019
- Raises second-half and full-year 2021 guidance for net sales, operating profit, and EPS from continuing operations
-
Issues third-quarter 2021 guidance, including net sales from continuing operations of
$1.78 billion to$1.81 billion , GAAP EPS from continuing operations of$0.42 to$0.45 and Adjusted EPS from continuing operations of$0.45 to$0.48 - For reconciliations of select GAAP and Non-GAAP measures, see Table 6 of this release
Net sales from continuing operations for the second quarter ended
“Our iconic brands continue to resonate with consumers around the world, and I’m very encouraged by the progress on our Full Potential growth plan,” said Chief Executive Officer
Due to the significant impact of the pandemic on prior year results, this release includes certain comparisons to the comparable 2019 periods for additional context. All 2019 results are rebased to reflect the European Innerwear business as discontinued operations as well as the exit of the C9 Champion mass program and the
Compared to second-quarter 2019, net sales from continuing operations increased
For the second-quarter 2021, GAAP gross margin of 38.9% increased 560 basis points compared to prior year and 200 basis points compared to second-quarter 2019. Adjusted gross margin of 39.0% increased 450 basis points over last year and approximately 75 basis points over 2019. The expansion in both periods was driven by higher sales, product mix and the impact from foreign exchange rates, which more than offset higher expedite costs that resulted from stronger-than-expected demand.
Second-quarter GAAP operating profit increased 8% to
In the second quarter of 2020, the company implemented several temporary SG&A cost savings initiatives such as furloughs and salary reductions, which generated approximately 600 basis points of one-time operating margin benefit in the year-ago quarter. As compared to second-quarter 2019, adjusted operating margin decreased approximately 15 basis points as higher brand marketing investments essentially offset the fixed-cost leverage from higher sales.
The GAAP and adjusted effective tax rates for the second quarter were 14.6% and 14.2%, respectively, which compares to GAAP and adjusted effective tax rates of 12.7% and 14.1%, respectively, for the second quarter of 2020. For the second quarter of 2019, GAAP and adjusted effective tax rates were 9.4% and 9.0%, respectively.
On a GAAP basis, second-quarter income from continuing operations totaled
Adjusted income from continuing operations totaled
(See the Note on Adjusted Measures and Reconciliation to GAAP Measures later in this news release for additional discussion and details of actions, which include pandemic-related and Full Potential plan charges.)
Second-Quarter 2021 Business Segment Summaries
Innerwear (vs 2020). Sales decreased
(vs 2019). Sales increased
Activewear (vs 2020). Activewear sales grew
(vs 2019). Activewear revenue increased
International (vs 2020). International segment revenue increased
(vs 2019). International segment revenue increased
Third-Quarter, Fourth-Quarter and Full-Year 2021 Financial Outlook
The following financial outlook is based on current market conditions and judgments of management and is subject to risks and uncertainties that may cause actual results to differ materially, many of which are further discussed in the company’s most recent annual report on Form 10-K available at www.sec.gov and in the investors section of the company’s website at www.Hanes.com/Investors.
For third-quarter 2021, which ends on
-
Net sales from continuing operations of approximately
$1.78 billion to$1.81 billion , which represents approximately 6% growth over prior year at the midpoint and includes a projected benefit of approximately$16 million from changes in foreign currency exchange rates. This compares to net sales of$1.69 billion in third-quarter 2020, which included$179 million in PPE sales. - Excluding PPE, net sales at the midpoint of the guidance range are expected to increase 19% over the prior year period.
- As compared to rebased third-quarter 2019, net sales at the midpoint are expected to increase 11%.
-
GAAP operating profit from continuing operations to range from approximately
$216 million to$226 million . -
Adjusted operating profit from continuing operations to range from approximately
$235 million to$245 million . The midpoint of adjusted operating profit implies an operating margin of approximately 13.4% and reflects the impact of cost inflation as well as increased brand investment. This compares to an adjusted operating margin of 14.3% in the third-quarter of 2020, which benefited from temporary COVID-driven cost reductions. -
Charges for actions related to Full Potential of approximately
$19 million . -
Interest and Other expenses of approximately
$45 million . - An effective tax rate of approximately 12% on a GAAP basis and approximately 15% on an adjusted basis.
-
GAAP earnings per share from continuing operations to range from
$0.42 to$0.45 . Adjusted earnings per share from continuing operations to range from$0.45 to$0.48 .
For fourth-quarter 2021, which ends on
-
Net sales from continuing operations of approximately
$1.71 billion to$1.78 billion , which represents approximately 3% growth over prior year at the midpoint and includes a projected benefit of approximately$6 million from changes in foreign currency exchange rates. This compares to net sales of$1.69 billion in fourth-quarter 2020, which included$28 million in PPE sales and approximately$45 million from the 53rd week. - Adjusting for PPE and the 53rd week in 2020, net sales at the midpoint of the guidance range are expected to increase 8% over the prior year period.
- As compared to rebased fourth-quarter 2019, net sales at the midpoint are expected to increase 15%.
-
GAAP operating profit from continuing operations to range from approximately
$172 million to$192 million . -
Adjusted operating profit from continuing operations to range from approximately
$200 million to$220 million . The midpoint of adjusted operating profit implies an operating margin of approximately 12.0% and reflects the impact of cost inflation as well as increased brand investment. This compares to an adjusted operating margin of 13.5% in the fourth-quarter of 2020. -
Charges for actions related to Full Potential of approximately
$28 million . -
Interest and Other expenses of approximately
$46 million . - An effective tax rate of approximately 15% on a GAAP and adjusted basis.
-
GAAP earnings per share from continuing operations to range from
$0.29 to$0.34 . Adjusted earnings per share from continuing operations to range from$0.37 to$0.42 .
For fiscal-year 2021, which ends on
-
Net sales from continuing operations to total approximately
$6.75 billion to$6.85 billion , which is$550 million above its prior range of$6.2 billion to$6.3 billion , and includes a projected benefit of approximately$116 million from changes in foreign currency exchange rates. -
At the midpoint, net sales guidance implies approximately 11% growth over prior year and 12% growth adjusted for the 53rd week in 2020. This compares to net sales of
$6.13 billion in 2020, which included$820 million in sales of PPE and approximately$45 million from the 53rd week. - Adjusting for PPE and the 53rd week in 2020, net sales at the midpoint of the guidance range are expected to increase 29% over the prior year period.
- As compared to rebased 2019, net sales at the midpoint are expected to increase 13%.
-
GAAP operating profit from continuing operations to range from approximately
$795 million to$825 million , versus the prior range of$730 million to$760 million . -
Adjusted operating profit from continuing operations to range from approximately
$880 million to$910 million , which is$65 million above its prior range of$815 million to$845 million . At the midpoint, adjusted operating profit guidance implies approximately 15% growth compared to prior year and 9% growth compared to 2019. The midpoint of adjusted operating profit guidance range suggests an operating margin of 13.2%. -
Full-year outlook reflects higher levels of cost inflation as compared to 2020 and 2019. Incremental brand marketing investment of
$50 million as compared to 2020. -
Charges for actions related to Full Potential of approximately
$85 million , which is unchanged from its prior outlook. -
Interest and Other expenses of approximately
$182 million . - An effective tax rate of approximately 13% on a GAAP basis and approximately 15% on an adjusted basis.
-
GAAP earnings per share from continuing operations to range from approximately
$1.50 to$1.58 . -
Adjusted earnings per share from continuing operations to range from approximately
$1.68 to$1.76 , which compares to its prior outlook of$1.51 to$1.59 . -
Cash flow from operations of approximately
$550 million , versus prior range of$500 million to$550 million . -
Capital expenditures of approximately
$100 million .
HanesBrands has updated its quarterly frequently-asked-questions document, which is available at www.Hanes.com/FAQ.
Note on Adjusted Measures and Reconciliation to GAAP Measures
To supplement financial results prepared in accordance with generally accepted accounting principles, the company provides quarterly and full-year results concerning certain non‐GAAP financial measures, including adjusted EPS from continuing operations, adjusted income from continuing operations, adjusted income tax expense, adjusted income from continuing operations before income tax expense, adjusted operating profit (and margin), adjusted SG&A, adjusted gross profit (and margin), EBITDA and adjusted EBITDA.
Adjusted EPS from continuing operations is defined as diluted EPS from continuing operations excluding actions and the tax effect on actions. Adjusted income from continuing operations is defined as income from continuing operations excluding actions and the tax effect on actions. Adjusted income tax expense is defined as income tax expense excluding actions. Adjusted income from continuing operations before income tax is defined as income from continuing operations before income tax excluding actions. Adjusted operating profit is defined as operating profit excluding actions. Adjusted SG&A is defined as selling, general and administrative expenses excluding actions. Adjusted gross profit is defined as gross profit excluding actions.
Charges for actions taken in 2021 include professional fees and intangible asset impairment charges related to our Full Potential plan. While these costs are not operational in nature and are not expected to continue for any singular transaction on an ongoing basis, similar types of costs, expenses and charges have occurred in prior periods and may recur in future periods depending upon future business plans and circumstances.
Charges for actions taken in 2020 include supply chain restructuring actions, program exit costs, COVID-19 related charges, Full Potential plan charges and the write-off of a discrete tax asset related to our
Charges for actions taken in 2019 primarily represented supply chain network changes, program exit costs, and overhead reduction as well as completion of outstanding acquisition integration.
HanesBrands has chosen to present these non‐GAAP measures to investors to enable additional analyses of past, present and future operating performance and as a supplemental means of evaluating operations absent the effect of the Full Potential plan and other actions, as well as the COVID-19 pandemic. HanesBrands believes these non-GAAP measures provide management and investors with valuable supplemental information for analyzing the operating performance of the company’s ongoing business during each period presented without giving effect to costs associated with the execution of any of the aforementioned actions taken.
The company has also chosen to present EBITDA and adjusted EBITDA to investors because it considers these measures to be an important supplemental means of evaluating operating performance. EBITDA is defined as income from continuing operations before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA excluding actions and stock compensation expense. HanesBrands believes that EBITDA and adjusted EBITDA are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the industry, and management uses EBITDA and adjusted EBITDA for planning purposes in connection with setting its capital allocation strategy. EBITDA and adjusted EBITDA should not, however, be considered as measures of discretionary cash available to invest in the growth of the business.
In addition, the company has chosen to present certain year-over-year comparisons with respect to the company’s rebased 2019 business, which excludes the exited C9 Champion program and
HanesBrands is a global company that reports financial information in
To calculate foreign currency translation on a constant currency basis, operating results for the current-year period for entities reporting in currencies other than the
HanesBrands believes constant-currency information is useful to management and investors to facilitate comparison of operating results and better identify trends in the company’s businesses.
Non‐GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as an alternative to, or substitute for, financial results prepared in accordance with GAAP. Further, the non-GAAP measures presented may be different from non-GAAP measures with similar or identical names presented by other companies.
Reconciliations of these non-GAAP measures to the most directly comparable GAAP financial measures are presented in the supplemental financial information included with this news release.
Cautionary Statement Concerning Forward-Looking Statements
This press release contains certain forward-looking statements, as defined under
HanesBrands
TABLE 1 |
||||||||||||||||||||||
|
||||||||||||||||||||||
Condensed Consolidated Statements of Income |
||||||||||||||||||||||
(in thousands, except per share data) |
||||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||||
|
Quarters Ended |
|
|
|
Six Months Ended |
|
|
|||||||||||||||
|
|
|
|
|
% Change |
|
|
|
|
|
% Change |
|||||||||||
Net sales |
$ |
1,751,311 |
|
|
$ |
1,543,083 |
|
|
13.5 |
% |
|
$ |
3,259,340 |
|
|
$ |
2,746,153 |
|
|
18.7 |
% |
|
Cost of sales |
1,069,682 |
|
|
1,029,221 |
|
|
|
|
1,975,030 |
|
|
1,814,123 |
|
|
|
|||||||
Gross profit |
681,629 |
|
|
513,862 |
|
|
32.6 |
% |
|
1,284,310 |
|
|
932,030 |
|
|
37.8 |
% |
|||||
As a % of net sales |
38.9 |
% |
|
33.3 |
% |
|
|
|
39.4 |
% |
|
33.9 |
% |
|
|
|||||||
Selling, general and administrative expenses |
464,235 |
|
|
311,729 |
|
|
|
|
876,794 |
|
|
681,944 |
|
|
|
|||||||
As a % of net sales |
26.5 |
% |
|
20.2 |
% |
|
|
|
26.9 |
% |
|
24.8 |
% |
|
|
|||||||
Operating profit |
217,394 |
|
|
202,133 |
|
|
7.5 |
% |
|
407,516 |
|
|
250,086 |
|
|
63.0 |
% |
|||||
As a % of net sales |
12.4 |
% |
|
13.1 |
% |
|
|
|
12.5 |
% |
|
9.1 |
% |
|
|
|||||||
Other expenses |
1,855 |
|
|
4,653 |
|
|
|
|
4,416 |
|
|
10,754 |
|
|
|
|||||||
Interest expense, net |
42,440 |
|
|
41,075 |
|
|
|
|
86,900 |
|
|
77,102 |
|
|
|
|||||||
Income from continuing operations before income tax expense |
173,099 |
|
|
156,405 |
|
|
|
|
316,200 |
|
|
162,230 |
|
|
|
|||||||
Income tax expense |
25,236 |
|
|
19,837 |
|
|
|
|
39,933 |
|
|
20,544 |
|
|
|
|||||||
Income from continuing operations |
147,863 |
|
|
136,568 |
|
|
8.3 |
% |
|
276,267 |
|
|
141,686 |
|
|
95.0 |
% |
|||||
Income (loss) from discontinued operations, net of tax |
(19,187 |
) |
|
24,613 |
(410,853 |
) |
11,621 |
|||||||||||||||
Net income (loss) |
$ |
128,676 |
|
|
$ |
161,181 |
|
|
|
|
$ |
(134,586 |
) |
|
$ |
153,307 |
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Earnings (loss) per share - basic: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Continuing operations |
$ |
0.42 |
|
|
$ |
0.39 |
|
|
|
|
$ |
0.79 |
|
|
$ |
0.40 |
|
|
|
|||
Discontinued operations |
(0.05 |
) |
|
0.07 |
|
|
|
|
(1.17 |
) |
|
0.03 |
|
|
|
|||||||
Net income (loss) |
$ |
0.37 |
|
|
$ |
0.46 |
|
|
|
|
$ |
(0.38 |
) |
|
$ |
0.43 |
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Earnings (loss) per share - diluted: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Continuing operations |
$ |
0.42 |
|
|
$ |
0.39 |
|
|
|
|
$ |
0.79 |
|
|
$ |
0.40 |
|
|
|
|||
Discontinued operations |
(0.05 |
) |
|
0.07 |
|
|
|
|
(1.17 |
) |
|
0.03 |
|
|
|
|||||||
Net income (loss) |
$ |
0.37 |
|
|
$ |
0.46 |
|
|
|
|
$ |
(0.38 |
) |
|
$ |
0.43 |
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Basic |
350,987 |
|
|
350,538 |
|
|
|
|
350,995 |
|
|
354,778 |
|
|
|
|||||||
Diluted |
352,052 |
|
|
350,829 |
|
|
|
|
351,869 |
|
|
355,133 |
|
|
|
TABLE 2-A |
||||||||||||||||||||||
|
||||||||||||||||||||||
Supplemental Financial Information |
||||||||||||||||||||||
Impact of Foreign Currency |
||||||||||||||||||||||
(in thousands, except per share data) |
||||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||||
|
Quarter Ended |
|
|
|
|
|
|
|||||||||||||||
|
As Reported |
|
Impact from
|
|
Constant
|
|
Quarter Ended
|
|
% Change,
|
|
% Change,
|
|||||||||||
As reported under GAAP: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net sales |
$ |
1,751,311 |
|
|
$ |
50,698 |
|
|
$ |
1,700,613 |
|
|
$ |
1,543,083 |
|
|
13.5 |
% |
|
10.2 |
% |
|
Gross profit |
681,629 |
|
|
27,233 |
|
|
654,396 |
|
|
513,862 |
|
|
32.6 |
|
|
27.3 |
|
|||||
Operating profit |
217,394 |
|
|
8,419 |
|
|
208,975 |
|
|
202,133 |
|
|
7.5 |
|
|
3.4 |
|
|||||
Diluted earnings per share from continuing operations |
$ |
0.42 |
|
|
$ |
0.02 |
|
|
$ |
0.40 |
|
|
$ |
0.39 |
|
|
7.7 |
% |
|
2.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
As adjusted:2 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net sales |
$ |
1,751,311 |
|
|
$ |
50,698 |
|
|
$ |
1,700,613 |
|
|
$ |
1,543,083 |
|
|
13.5 |
% |
|
10.2 |
% |
|
Gross profit |
683,529 |
|
|
27,233 |
|
|
656,296 |
|
|
532,280 |
|
|
28.4 |
|
|
23.3 |
|
|||||
Operating profit |
236,058 |
|
|
8,419 |
|
|
227,639 |
|
|
234,412 |
|
|
0.7 |
|
|
(2.9 |
) |
|||||
Diluted earnings per share from continuing operations |
$ |
0.47 |
|
|
$ |
0.02 |
|
|
$ |
0.45 |
|
|
$ |
0.46 |
|
|
2.2 |
% |
|
(2.2 |
)% |
|
Six Months Ended |
|
|
|
|
|
|
|||||||||||||||
|
As Reported |
|
Impact from
|
|
Constant
|
|
Six Months
|
|
% Change,
|
|
% Change,
|
|||||||||||
As reported under GAAP: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net sales |
$ |
3,259,340 |
|
|
$ |
93,771 |
|
|
$ |
3,165,569 |
|
|
$ |
2,746,153 |
|
|
18.7 |
% |
|
15.3 |
% |
|
Gross profit |
1,284,310 |
|
|
51,415 |
|
|
1,232,895 |
|
|
932,030 |
|
|
37.8 |
|
|
32.3 |
|
|||||
Operating profit |
407,516 |
|
|
15,952 |
|
|
391,564 |
|
|
250,086 |
|
|
63.0 |
|
|
56.6 |
|
|||||
Diluted earnings per share from continuing operations |
$ |
0.79 |
|
|
$ |
0.04 |
|
|
$ |
0.75 |
|
|
$ |
0.40 |
|
|
97.5 |
% |
|
87.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
As adjusted:2 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net sales |
$ |
3,259,340 |
|
|
$ |
93,771 |
|
|
$ |
3,165,569 |
|
|
$ |
2,746,153 |
|
|
18.7 |
% |
|
15.3 |
% |
|
Gross profit |
1,289,017 |
|
|
51,415 |
|
|
1,237,602 |
|
|
972,259 |
|
|
32.6 |
|
|
27.3 |
|
|||||
Operating profit |
445,573 |
|
|
15,952 |
|
|
429,621 |
|
|
306,689 |
|
|
45.3 |
|
|
40.1 |
|
|||||
Diluted earnings per share from continuing operations |
$ |
0.86 |
|
|
$ |
0.04 |
|
|
$ |
0.82 |
|
|
$ |
0.53 |
|
|
62.3 |
% |
|
54.7 |
% |
1 |
Effect of the change in foreign currency exchange rates year-over-year. Calculated by applying prior period exchange rates to the current year financial results. |
|
2 |
|
Results for the quarters and six months ended |
TABLE 2-B |
||||||||||||||||||||||
|
||||||||||||||||||||||
Supplemental Financial Information |
||||||||||||||||||||||
Impact of Foreign Currency |
||||||||||||||||||||||
(in thousands, except per share data) |
||||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||||
|
Quarter Ended |
|
|
|
|
|
|
|||||||||||||||
|
As Reported |
|
Impact from
|
|
Constant
|
|
Quarter Ended
|
|
% Change,
|
|
% Change,
|
|||||||||||
As reported under GAAP: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net sales |
$ |
1,751,311 |
|
|
$ |
26,303 |
|
|
$ |
1,725,008 |
|
|
$ |
1,636,709 |
|
|
7.0 |
% |
|
5.4 |
% |
|
Gross profit |
681,629 |
|
|
14,457 |
|
|
667,172 |
|
|
604,182 |
|
|
12.8 |
|
|
10.4 |
|
|||||
Operating profit |
217,394 |
|
|
4,152 |
|
|
213,242 |
|
|
219,893 |
|
|
(1.1 |
) |
|
(3.0 |
) |
|||||
Diluted earnings per share from continuing operations |
$ |
0.42 |
|
|
$ |
0.01 |
|
|
$ |
0.41 |
|
|
$ |
0.41 |
|
|
2.4 |
% |
|
— |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
As adjusted:2 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net sales |
$ |
1,751,311 |
|
|
$ |
26,303 |
|
|
$ |
1,725,008 |
|
|
$ |
1,517,999 |
|
|
15.4 |
% |
|
13.6 |
% |
|
Gross profit |
683,529 |
|
|
14,457 |
|
|
669,072 |
|
|
581,442 |
|
|
17.6 |
|
|
15.1 |
|
|||||
Operating profit |
236,058 |
|
|
4,152 |
|
|
231,906 |
|
|
206,865 |
|
|
14.1 |
|
|
12.1 |
|
|||||
Diluted earnings per share from continuing operations |
$ |
0.47 |
|
|
$ |
0.01 |
|
|
$ |
0.46 |
|
|
$ |
0.38 |
|
|
23.7 |
% |
|
21.1 |
% |
|
Six Months Ended |
|
|
|
|
|
|
|||||||||||||||
|
As Reported |
|
Impact from
|
|
Constant
|
|
Six Months
|
|
% Change,
|
|
% Change,
|
|||||||||||
As reported under GAAP: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net sales |
$ |
3,259,340 |
|
|
$ |
48,833 |
|
|
$ |
3,210,507 |
|
|
$ |
3,086,396 |
|
|
5.6 |
% |
|
4.0 |
% |
|
Gross profit |
1,284,310 |
|
|
27,290 |
|
|
1,257,020 |
|
|
1,149,104 |
|
|
11.8 |
|
|
9.4 |
|
|||||
Operating profit |
407,516 |
|
|
8,587 |
|
|
398,929 |
|
|
359,501 |
|
|
13.4 |
|
|
11.0 |
|
|||||
Diluted earnings per share from continuing operations |
$ |
0.79 |
|
|
$ |
0.02 |
|
|
$ |
0.76 |
|
|
$ |
0.62 |
|
|
27.4 |
% |
|
22.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
As adjusted:2 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net sales |
$ |
3,259,340 |
|
|
$ |
48,833 |
|
|
$ |
3,210,507 |
|
|
$ |
2,873,582 |
|
|
13.4 |
% |
|
11.7 |
% |
|
Gross profit |
1,289,017 |
|
|
27,290 |
|
|
1,261,727 |
|
|
1,113,949 |
|
|
15.7 |
|
|
13.3 |
|
|||||
Operating profit |
445,573 |
|
|
8,587 |
|
|
436,986 |
|
|
346,726 |
|
|
28.5 |
|
|
26.0 |
|
|||||
Diluted earnings per share from continuing operations |
$ |
0.86 |
|
|
$ |
0.02 |
|
|
$ |
0.84 |
|
|
$ |
0.59 |
|
|
45.8 |
% |
|
42.4 |
% |
1 |
Effect of the change in foreign currency exchange rates year-over-year. Calculated by applying prior period exchange rates to the current year financial results. |
|
2 |
Results for the quarters and six months ended |
|
||||||||||||||||||||||
TABLE 3-A |
||||||||||||||||||||||
|
||||||||||||||||||||||
Supplemental Financial Information |
||||||||||||||||||||||
By Business Segment |
||||||||||||||||||||||
(in thousands) |
||||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||||
Quarters Ended |
Six Months Ended |
|||||||||||||||||||||
|
|
|
|
|
% Change |
|
|
|
|
|
% Change |
|||||||||||
Segment net sales: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Innerwear1 |
$ |
780,650 |
|
|
$ |
1,094,814 |
|
|
(28.7 |
)% |
|
$ |
1,351,085 |
|
|
$ |
1,517,216 |
|
|
(10.9 |
)% |
|
Activewear |
404,189 |
|
|
168,379 |
|
|
140.0 |
|
|
768,192 |
|
|
456,379 |
|
|
68.3 |
|
|||||
International |
478,923 |
|
|
251,285 |
|
|
90.6 |
|
|
985,184 |
|
|
679,515 |
|
|
45.0 |
|
|||||
Other |
87,549 |
|
|
28,605 |
|
|
206.1 |
|
|
154,879 |
|
|
93,043 |
|
|
66.5 |
|
|||||
Total net sales |
$ |
1,751,311 |
|
|
$ |
1,543,083 |
|
|
13.5 |
% |
|
$ |
3,259,340 |
|
|
$ |
2,746,153 |
|
|
18.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Segment operating profit: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Innerwear1 |
$ |
186,169 |
|
|
$ |
304,524 |
|
|
(38.9 |
)% |
|
$ |
313,586 |
|
|
$ |
386,075 |
|
|
(18.8 |
)% |
|
Activewear |
41,047 |
|
|
(5,751 |
) |
|
NM |
|
|
101,641 |
|
|
2,357 |
|
|
4,212.3 |
|
|||||
International |
61,900 |
|
|
5,162 |
|
|
1,099.1 |
|
|
149,080 |
|
|
55,907 |
|
|
166.7 |
|
|||||
Other |
9,220 |
|
|
(11,929 |
) |
|
NM |
|
|
11,106 |
|
|
(15,322 |
) |
|
NM |
|
|||||
General corporate expenses/other |
(62,278 |
) |
|
(57,594 |
) |
|
8.1 |
|
|
(129,840 |
) |
|
(122,328 |
) |
|
6.1 |
|
|||||
Total operating profit before restructuring and other action-related charges |
236,058 |
|
|
234,412 |
|
|
0.7 |
|
|
445,573 |
|
|
306,689 |
|
|
45.3 |
|
|||||
Restructuring and other action-related charges |
(18,664 |
) |
|
(32,279 |
) |
|
(42.2 |
) |
|
(38,057 |
) |
|
(56,603 |
) |
|
(32.8 |
) |
|||||
Total operating profit |
$ |
217,394 |
|
|
$ |
202,133 |
|
|
7.5 |
% |
|
$ |
407,516 |
|
|
$ |
250,086 |
|
|
63.0 |
% |
1 |
The Innerwear segment includes |
|
Quarters Ended |
|
|
|
Six Months Ended |
|
|
|||||||||||
|
|
|
|
|
Basis
|
|
|
|
|
|
Basis
|
|||||||
Segment operating margin: |
|
|
|
|
|
|
|
|
|
|
|
|||||||
Innerwear |
23.8 |
% |
|
27.8 |
% |
|
(397 |
) |
|
23.2 |
% |
|
25.4 |
% |
|
(220 |
) |
|
Activewear |
10.2 |
|
|
(3.4 |
) |
|
1,357 |
|
|
13.2 |
|
|
0.5 |
|
|
1,270 |
|
|
International |
12.9 |
|
|
2.1 |
|
|
1,087 |
|
|
15.1 |
|
|
8.2 |
|
|
690 |
|
|
Other |
10.5 |
|
|
(41.7 |
) |
|
5,223 |
|
|
7.2 |
|
|
(16.5 |
) |
|
2,370 |
|
|
General corporate expenses/other |
(3.6 |
) |
|
(3.7 |
) |
|
18 |
|
|
(4.0 |
) |
|
(4.5 |
) |
|
47 |
|
|
Total operating margin before restructuring and other action-related charges |
13.5 |
|
|
15.2 |
|
|
(171 |
) |
|
13.7 |
|
|
11.2 |
|
|
250 |
|
|
Restructuring and other action-related charges |
(1.1 |
) |
|
(2.1 |
) |
|
103 |
|
|
(1.2 |
) |
|
(2.1 |
) |
|
89 |
|
|
Total operating margin |
12.4 |
% |
|
13.1 |
% |
|
(69 |
) |
|
12.5 |
% |
|
9.1 |
% |
|
340 |
|
TABLE 3-B |
||||||||||||||||||||||
|
||||||||||||||||||||||
Supplemental Financial Information |
||||||||||||||||||||||
By Business Segment |
||||||||||||||||||||||
(in thousands) |
||||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||||
|
Quarters Ended |
|
|
|
Six Months Ended |
|
|
|||||||||||||||
|
|
|
|
|
% Change |
|
|
|
|
|
% Change |
|||||||||||
Segment net sales: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Innerwear |
$ |
780,650 |
|
|
$ |
657,477 |
|
|
18.7 |
% |
|
$ |
1,351,085 |
|
|
$ |
1,123,891 |
|
|
20.2 |
% |
|
Activewear |
404,189 |
|
|
350,694 |
|
|
15.3 |
|
|
768,192 |
|
|
671,461 |
|
|
14.4 |
|
|||||
International |
478,923 |
|
|
430,819 |
|
|
11.2 |
|
|
985,184 |
|
|
921,648 |
|
|
6.9 |
|
|||||
Other |
87,549 |
|
|
79,009 |
|
|
10.8 |
|
|
154,879 |
|
|
156,582 |
|
|
(1.1 |
) |
|||||
Total net sales |
$ |
1,751,311 |
|
|
$ |
1,517,999 |
|
|
15.4 |
% |
|
$ |
3,259,340 |
|
|
$ |
2,873,582 |
|
|
13.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Segment operating profit: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Innerwear |
$ |
186,169 |
|
|
$ |
146,997 |
|
|
26.6 |
% |
|
$ |
313,586 |
|
|
$ |
250,123 |
|
|
25.4 |
% |
|
Activewear |
41,047 |
|
|
45,855 |
|
|
(10.5 |
) |
|
101,641 |
|
|
70,025 |
|
|
45.1 |
|
|||||
International |
61,900 |
|
|
66,490 |
|
|
(6.9 |
) |
|
149,080 |
|
|
151,266 |
|
|
(1.4 |
) |
|||||
Other |
9,220 |
|
|
7,994 |
|
|
15.3 |
|
|
11,106 |
|
|
10,429 |
|
|
6.5 |
|
|||||
General corporate expenses/other |
(62,278 |
) |
|
(60,471 |
) |
|
3.0 |
|
|
(129,840 |
) |
|
(135,117 |
) |
|
(3.9 |
) |
|||||
Total operating profit before restructuring and other action-related charges |
236,058 |
|
|
206,865 |
|
|
14.1 |
|
|
445,573 |
|
|
346,726 |
|
|
28.5 |
|
|||||
Restructuring and other action-related charges |
(18,664 |
) |
|
(12,429 |
) |
|
50.2 |
|
|
(38,057 |
) |
|
(33,605 |
) |
|
13.2 |
|
|||||
Total operating profit |
$ |
217,394 |
|
|
$ |
194,436 |
|
|
11.8 |
% |
|
$ |
407,516 |
|
|
$ |
313,121 |
|
|
30.1 |
% |
|
Quarters Ended |
|
|
|
Six Months Ended |
|
|
|||||||||||
|
|
|
|
|
Basis
|
|
|
|
|
|
Basis Points
|
|||||||
Segment operating margin: |
|
|
|
|
|
|
|
|
|
|
|
|||||||
Innerwear |
23.8 |
% |
|
22.4 |
% |
|
149 |
|
|
23.2 |
% |
|
22.3 |
% |
|
94 |
|
|
Activewear |
10.2 |
|
|
13.1 |
|
|
(292 |
) |
|
13.2 |
|
|
10.4 |
|
|
277 |
|
|
International |
12.9 |
|
|
15.4 |
|
|
(251 |
) |
|
15.1 |
|
|
16.4 |
|
|
(131 |
) |
|
Other |
10.5 |
|
|
10.1 |
|
|
41 |
|
|
7.2 |
|
|
6.7 |
|
|
54 |
|
|
General corporate expenses/other |
(3.6 |
) |
|
(4.0 |
) |
|
43 |
|
|
(4.0 |
) |
|
(4.7 |
) |
|
72 |
|
|
Total operating margin before restructuring and other action-related charges |
13.5 |
|
|
13.6 |
|
|
(15 |
) |
|
13.7 |
|
|
12.1 |
|
|
160 |
|
|
Restructuring and other action-related charges |
(1.1 |
) |
|
(0.8 |
) |
|
(25 |
) |
|
(1.2 |
) |
|
(1.2 |
) |
|
— |
|
|
Total operating margin |
12.4 |
% |
|
12.8 |
% |
|
(40 |
) |
|
12.5 |
% |
|
10.9 |
% |
|
160 |
|
1 |
Results for the quarter and six months ended |
TABLE 4 |
||||||||||||
|
||||||||||||
Condensed Consolidated Balance Sheets |
||||||||||||
(in thousands) |
||||||||||||
(Unaudited) |
||||||||||||
|
|
|
|
|
|
|||||||
Assets |
|
|
|
|
|
|||||||
Cash and cash equivalents |
$ |
667,298 |
|
|
$ |
900,615 |
|
|
$ |
556,099 |
|
|
Trade accounts receivable, net |
960,993 |
|
|
768,221 |
|
|
1,139,130 |
|
||||
Inventories |
1,530,622 |
|
|
1,367,758 |
|
|
1,774,139 |
|
||||
Other current assets |
159,715 |
|
|
158,700 |
|
|
171,435 |
|
||||
Current assets of discontinued operations |
301,986 |
|
|
234,086 |
|
|
401,347 |
|
||||
Total current assets |
3,620,614 |
|
|
3,429,380 |
|
|
4,042,150 |
|
||||
Property, net |
446,356 |
|
|
477,821 |
|
|
496,933 |
|
||||
Right-of-use assets |
398,526 |
|
|
432,631 |
|
|
438,683 |
|
||||
Trademarks and other identifiable intangibles, net |
1,258,783 |
|
|
1,293,847 |
|
|
1,196,359 |
|
||||
|
1,148,021 |
|
|
1,158,938 |
|
|
1,144,739 |
|
||||
Deferred tax assets |
351,309 |
|
|
367,976 |
|
|
193,100 |
|
||||
Other noncurrent assets |
54,380 |
|
|
64,773 |
|
|
118,296 |
|
||||
Noncurrent assets of discontinued operations |
— |
|
|
494,501 |
|
|
493,045 |
|
||||
Total assets |
$ |
7,277,989 |
|
|
$ |
7,719,867 |
|
|
$ |
8,123,305 |
|
|
|
|
|
|
|
|
|||||||
Liabilities |
|
|
|
|
|
|||||||
Accounts payable |
$ |
1,171,645 |
|
|
$ |
891,868 |
|
|
$ |
1,101,438 |
|
|
Accrued liabilities |
628,007 |
|
|
609,864 |
|
|
452,763 |
|
||||
Lease liabilities |
129,053 |
|
|
136,510 |
|
|
147,406 |
|
||||
Notes payable |
— |
|
|
— |
|
|
13 |
|
||||
Current portion of long-term debt |
37,500 |
|
|
263,936 |
|
|
— |
|
||||
Current liabilities of discontinued operations |
289,751 |
|
|
222,183 |
|
|
310,972 |
|
||||
Total current liabilities |
2,255,956 |
|
|
2,124,361 |
|
|
2,012,592 |
|
||||
Long-term debt |
3,647,482 |
|
|
3,739,434 |
|
|
3,985,631 |
|
||||
Lease liabilities - noncurrent |
299,380 |
|
|
331,577 |
|
|
330,599 |
|
||||
Pension and postretirement benefits |
327,597 |
|
|
381,457 |
|
|
328,647 |
|
||||
Other noncurrent liabilities |
185,384 |
|
|
216,091 |
|
|
270,152 |
|
||||
Noncurrent liabilities of discontinued operations |
— |
|
|
112,989 |
|
|
116,364 |
|
||||
Total liabilities |
6,715,799 |
|
|
6,905,909 |
|
|
7,043,985 |
|
||||
|
|
|
|
|
|
|||||||
Stockholders’ equity |
|
|
|
|
|
|||||||
Preferred stock |
— |
|
|
— |
|
|
— |
|
||||
Common stock |
3,491 |
|
|
3,488 |
|
|
3,481 |
|
||||
Additional paid-in capital |
310,148 |
|
|
307,883 |
|
|
302,522 |
|
||||
Retained earnings |
829,479 |
|
|
1,069,546 |
|
|
1,404,326 |
|
||||
Accumulated other comprehensive loss |
(580,928 |
) |
|
(566,959 |
) |
|
(631,009 |
) |
||||
Total stockholders’ equity |
562,190 |
|
|
813,958 |
|
|
1,079,320 |
|
||||
Total liabilities and stockholders’ equity |
$ |
7,277,989 |
|
|
$ |
7,719,867 |
|
|
$ |
8,123,305 |
|
TABLE 5 |
|||||||||||||||||
|
|||||||||||||||||
Condensed Consolidated Statements of Cash Flows1 |
|||||||||||||||||
(in thousands) |
|||||||||||||||||
(Unaudited) |
|||||||||||||||||
|
Quarters Ended |
|
Six Months Ended |
||||||||||||||
|
|
|
|
|
|
|
|
||||||||||
Operating Activities: |
|
|
|
|
|
|
|
||||||||||
Net income (loss) |
$ |
128,676 |
|
|
$ |
161,181 |
|
|
|
$ |
(134,586 |
) |
|
$ |
153,307 |
|
|
Adjustments to reconcile net income (loss) to net cash from operating activities: |
|
|
|
|
|
|
|
||||||||||
Depreciation |
19,423 |
|
|
22,618 |
|
|
|
43,565 |
|
|
45,399 |
|
|||||
Amortization of acquisition intangibles |
4,799 |
|
|
6,086 |
|
|
|
10,978 |
|
|
12,199 |
|
|||||
Other amortization |
2,794 |
|
|
2,630 |
|
|
|
5,814 |
|
|
5,107 |
|
|||||
Impairment of intangible assets and goodwill |
— |
|
|
20,319 |
|
|
|
163,047 |
|
|
20,319 |
|
|||||
Loss on classification of assets held for sale |
9,828 |
|
|
— |
|
|
|
236,180 |
|
|
— |
|
|||||
Amortization of debt issuance costs |
3,089 |
|
|
2,996 |
|
|
|
7,669 |
|
|
5,119 |
|
|||||
Other |
(8,389 |
) |
|
21,505 |
|
|
|
(14,224 |
) |
|
16,247 |
|
|||||
Changes in assets and liabilities: |
|
|
|
|
|
|
|
||||||||||
Accounts receivable |
(136,151 |
) |
|
(465,828 |
) |
|
|
(200,106 |
) |
|
(392,134 |
) |
|||||
Inventories |
(52,368 |
) |
|
25,376 |
|
|
|
(175,149 |
) |
|
(61,409 |
) |
|||||
Other assets |
(5,155 |
) |
|
(58,360 |
) |
|
|
4,451 |
|
|
(31,570 |
) |
|||||
Accounts payable |
191,121 |
|
|
223,943 |
|
|
|
300,318 |
|
|
210,338 |
|
|||||
Accrued pension and postretirement benefits |
(419 |
) |
|
2,163 |
|
|
|
(39,176 |
) |
|
(19,318 |
) |
|||||
Accrued liabilities and other |
38,062 |
|
|
100,794 |
|
|
|
3,475 |
|
|
18,603 |
|
|||||
Net cash from operating activities |
195,310 |
|
|
65,423 |
|
|
|
212,256 |
|
|
(17,793 |
) |
|||||
|
|
|
|
|
|
|
|
||||||||||
Investing Activities: |
|
|
|
|
|
|
|
||||||||||
Capital expenditures |
(7,527 |
) |
|
(20,753 |
) |
|
|
(25,331 |
) |
|
(46,512 |
) |
|||||
Proceeds from sales of assets |
49 |
|
|
— |
|
|
|
2,455 |
|
|
66 |
|
|||||
Other |
5,143 |
|
|
4,607 |
|
|
|
6,937 |
|
|
5,823 |
|
|||||
Net cash from investing activities |
(2,335 |
) |
|
(16,146 |
) |
|
|
(15,939 |
) |
|
(40,623 |
) |
|||||
|
|
|
|
|
|
|
|
||||||||||
Financing Activities: |
|
|
|
|
|
|
|
||||||||||
Repayments on Term Loan Facilities |
(6,250 |
) |
|
— |
|
|
|
(306,250 |
) |
|
— |
|
|||||
Borrowings on Accounts Receivable Securitization Facility |
— |
|
|
— |
|
|
|
— |
|
|
227,061 |
|
|||||
Repayments on Accounts Receivable Securitization Facility |
— |
|
|
(152,152 |
) |
|
|
— |
|
|
(227,061 |
) |
|||||
Borrowings on Revolving Loan Facilities |
— |
|
|
— |
|
|
|
— |
|
|
1,638,000 |
|
|||||
Repayments on Revolving Loan Facilities |
— |
|
|
(950,000 |
) |
|
|
— |
|
|
(1,638,000 |
) |
|||||
Borrowings on Senior Notes |
— |
|
|
700,000 |
|
|
|
— |
|
|
700,000 |
|
|||||
Borrowings on International Debt |
— |
|
|
— |
|
|
|
— |
|
|
31,222 |
|
|||||
Borrowings on notes payable |
21,532 |
|
|
54,357 |
|
|
|
42,638 |
|
|
116,669 |
|
|||||
Repayments on notes payable |
(22,790 |
) |
|
(48,021 |
) |
|
|
(43,066 |
) |
|
(112,373 |
) |
|||||
Share repurchases |
— |
|
|
— |
|
|
|
— |
|
|
(200,269 |
) |
|||||
Cash dividends paid |
(52,368 |
) |
|
(52,213 |
) |
|
|
(104,719 |
) |
|
(105,896 |
) |
|||||
Other |
378 |
|
|
(14,167 |
) |
|
|
(2,524 |
) |
|
(14,035 |
) |
|||||
Net cash from financing activities |
(59,498 |
) |
|
(462,196 |
) |
|
|
(413,921 |
) |
|
415,318 |
|
|||||
Effect of changes in foreign exchange rates on cash |
882 |
|
|
12,392 |
|
|
|
(16,780 |
) |
|
(2,669 |
) |
|||||
Change in cash, cash equivalents and restricted cash |
134,359 |
|
|
(400,527 |
) |
|
|
(234,384 |
) |
|
354,233 |
|
|||||
Cash, cash equivalents and restricted cash at beginning of period |
541,860 |
|
|
1,084,683 |
|
|
|
910,603 |
|
|
329,923 |
|
|||||
Cash, cash equivalents and restricted cash at end of period |
676,219 |
|
|
684,156 |
|
|
|
676,219 |
|
|
684,156 |
|
|||||
Less restricted cash at end of period |
— |
|
|
1,042 |
|
|
|
— |
|
|
1,042 |
|
|||||
Cash and cash equivalents at end of period |
$ |
676,219 |
|
|
$ |
683,114 |
|
|
|
$ |
676,219 |
|
|
$ |
683,114 |
|
|
|
|
|
|
|
|
|
|
||||||||||
Balances included in the Condensed Consolidated Balance Sheets: |
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents |
$ |
667,298 |
|
|
$ |
556,099 |
|
|
|
$ |
667,298 |
|
|
$ |
556,099 |
|
|
Cash and cash equivalents included in current assets of discontinued operations |
8,921 |
|
|
127,015 |
|
|
|
8,921 |
|
|
127,015 |
|
|||||
Cash and cash equivalents at end of period |
$ |
676,219 |
|
|
$ |
683,114 |
|
|
|
$ |
676,219 |
|
|
$ |
683,114 |
|
1 |
The cash flows related to discontinued operations have not been segregated and remain included in the major classes of assets and liabilities. Accordingly, the Condensed Consolidated Statements of Cash Flows include the results of continuing and discontinued operations. |
TABLE 6-A | ||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||
Supplemental Financial Information |
||||||||||||||||||||||||||||
Reconciliation of Select GAAP Measures to Non-GAAP Measures |
||||||||||||||||||||||||||||
(in thousands, except per share data) |
||||||||||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||||||||||
|
Quarter Ended |
|||||||||||||||||||||||||||
|
Gross Profit |
|
Selling, General
|
|
Operating
|
|
Income From
|
|
Income Tax
|
|
Income From
|
|
Diluted
|
|||||||||||||||
As reported |
$ |
681,629 |
|
|
$ |
(464,235 |
) |
|
$ |
217,394 |
|
|
$ |
173,099 |
|
|
$ |
(25,236 |
) |
|
$ |
147,863 |
|
|
$ |
0.42 |
|
|
As a percentage of net sales |
38.9 |
% |
|
26.5 |
% |
|
12.4 |
% |
|
|
|
|
|
|
|
|
||||||||||||
Restructuring and other action-related charges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Full Potential Plan: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Professional services |
— |
|
|
13,804 |
|
|
13,804 |
|
|
13,804 |
|
|
— |
|
|
13,804 |
|
|
0.04 |
|
||||||||
Other |
1,900 |
|
|
2,960 |
|
|
4,860 |
|
|
4,860 |
|
|
— |
|
|
4,860 |
|
|
0.01 |
|
||||||||
Tax effect on actions |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(1,903 |
) |
|
(1,903 |
) |
|
(0.01 |
) |
||||||||
Total restructuring and other action-related charges |
1,900 |
|
|
16,764 |
|
|
18,664 |
|
|
18,664 |
|
|
(1,903 |
) |
|
16,761 |
|
|
0.05 |
|
||||||||
As adjusted |
$ |
683,529 |
|
|
$ |
(447,471 |
) |
|
$ |
236,058 |
|
|
$ |
191,763 |
|
|
$ |
(27,139 |
) |
|
$ |
164,624 |
|
|
$ |
0.47 |
|
|
As a percentage of net sales |
39.0 |
% |
|
25.6 |
% |
|
13.5 |
% |
|
|
|
|
|
|
|
|
|
Six Months Ended |
||||||||||||||||||||||||||||
|
Gross Profit |
|
Selling, General
|
|
Operating
|
|
Income
|
|
Income Tax
|
|
Income
|
|
Diluted
|
||||||||||||||||
As reported |
$ |
1,284,310 |
|
$ |
(876,794 |
) |
|
$ |
407,516 |
|
|
$ |
316,200 |
|
|
$ |
(39,933 |
) |
|
$ |
276,267 |
|
|
$ |
0.79 |
|
|||
As a percentage of net sales |
39.4 |
% |
|
26.9 |
% |
|
12.5 |
% |
|
|
|
|
|
|
|
|
|||||||||||||
Restructuring and other action-related charges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Full Potential Plan: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Professional services |
— |
|
|
25,510 |
|
|
25,510 |
|
|
25,510 |
|
|
— |
|
|
25,510 |
|
|
0.07 |
|
|||||||||
Impairment of intangible assets |
— |
|
|
7,302 |
|
|
7,302 |
|
|
7,302 |
|
|
— |
|
|
7,302 |
|
|
0.02 |
|
|||||||||
Other |
4,707 |
|
|
538 |
|
|
5,245 |
|
|
5,245 |
|
|
— |
|
|
5,245 |
|
|
0.01 |
|
|||||||||
Discrete tax benefit |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(7,295 |
) |
|
(7,295 |
) |
|
(0.02 |
) |
|||||||||
Tax effect on actions |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(5,910 |
) |
|
(5,910 |
) |
|
(0.02 |
) |
|||||||||
Total restructuring and other action-related charges |
4,707 |
|
|
33,350 |
|
|
38,057 |
|
|
38,057 |
|
|
(13,205 |
) |
|
24,852 |
|
|
0.07 |
|
|||||||||
As adjusted |
$ |
1,289,017 |
|
|
$ |
(843,444 |
) |
|
$ |
445,573 |
|
|
$ |
354,257 |
|
|
$ |
(53,138 |
) |
|
$ |
301,119 |
|
|
$ |
0.86 |
|
||
As a percentage of net sales |
39.5 |
% |
|
25.9 |
% |
|
13.7 |
% |
|
|
|
|
|
|
|
|
|||||||||||||
1 |
Amounts may not be additive due to rounding. |
Including the favorable foreign currency impact of |
Including the favorable foreign currency impact of |
TABLE 6-B | ||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||
Supplemental Financial Information |
||||||||||||||||||||||||||||
Reconciliation of Select GAAP Measures to Non-GAAP Measures |
||||||||||||||||||||||||||||
(in thousands, except per share data) |
||||||||||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||||||||||
|
Quarter Ended |
|||||||||||||||||||||||||||
|
Gross Profit |
|
Selling, General
|
|
Operating
|
|
Income
|
|
Income Tax
|
|
Income
|
|
Diluted
|
|||||||||||||||
As reported |
$ |
513,862 |
|
|
$ |
(311,729 |
) |
|
$ |
202,133 |
|
|
$ |
156,405 |
|
|
$ |
(19,837 |
) |
|
$ |
136,568 |
|
|
$ |
0.39 |
|
|
As a percentage of net sales |
33.3 |
% |
|
20.2 |
% |
|
13.1 |
% |
|
|
|
|
|
|
|
|
||||||||||||
Restructuring and other action-related charges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Supply chain actions |
2,637 |
|
|
— |
|
|
2,637 |
|
|
2,637 |
|
|
— |
|
|
2,637 |
|
|
0.01 |
|
||||||||
Program exit costs |
1,285 |
|
|
— |
|
|
1,285 |
|
|
1,285 |
|
|
— |
|
|
1,285 |
|
|
0.00 |
|
||||||||
Other |
(373 |
) |
|
4,443 |
|
|
4,070 |
|
|
4,070 |
|
|
— |
|
|
4,070 |
|
|
0.01 |
|
||||||||
COVID-19 related charges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Bad debt |
— |
|
|
9,418 |
|
|
9,418 |
|
|
9,418 |
|
|
— |
|
|
9,418 |
|
|
0.03 |
|
||||||||
Inventory |
14,869 |
|
|
— |
|
|
14,869 |
|
|
14,869 |
|
|
— |
|
|
14,869 |
|
|
0.04 |
|
||||||||
Tax effect on actions |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(6,695 |
) |
|
(6,695 |
) |
|
(0.02 |
) |
||||||||
Total restructuring and other action-related charges |
18,418 |
|
|
13,861 |
|
|
32,279 |
|
|
32,279 |
|
|
(6,695 |
) |
|
25,584 |
|
|
0.07 |
|
||||||||
As adjusted |
$ |
532,280 |
|
|
$ |
(297,868 |
) |
|
$ |
234,412 |
|
|
$ |
188,684 |
|
|
$ |
(26,532 |
) |
|
$ |
162,152 |
|
|
$ |
0.46 |
|
|
As a percentage of net sales |
34.5 |
% |
|
19.3 |
% |
|
15.2 |
% |
|
|
|
|
|
|
|
|
|
Six Months Ended |
||||||||||||||||||||||||||||
|
Gross Profit |
|
Selling, General
|
|
Operating
|
|
Income
|
|
Income Tax
|
|
Income
|
|
Diluted
|
||||||||||||||||
As reported |
$ |
932,030 |
|
|
|
$ |
(681,944 |
) |
|
$ |
250,086 |
|
|
$ |
162,230 |
|
|
$ |
(20,544 |
) |
|
$ |
141,686 |
|
|
$ |
0.40 |
|
|
As a percentage of net sales |
33.9 |
|
% |
|
24.8 |
% |
|
9.1 |
% |
|
|
|
|
|
|
|
|
||||||||||||
Restructuring and other action-related charges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Supply chain actions |
16,702 |
|
|
|
— |
|
|
16,702 |
|
|
16,702 |
|
|
— |
|
|
16,702 |
|
|
0.05 |
|
||||||||
Program exit costs |
9,031 |
|
|
|
467 |
|
|
9,498 |
|
|
9,498 |
|
|
— |
|
|
9,498 |
|
|
0.03 |
|
||||||||
Other |
(373 |
) |
|
|
6,489 |
|
|
6,116 |
|
|
6,116 |
|
|
— |
|
|
6,116 |
|
|
0.02 |
|
||||||||
COVID-19 related charges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Bad debt |
— |
|
|
|
9,418 |
|
|
9,418 |
|
|
9,418 |
|
|
— |
|
|
9,418 |
|
|
0.03 |
|
||||||||
Inventory |
14,869 |
|
|
|
— |
|
|
14,869 |
|
|
14,869 |
|
|
— |
|
|
14,869 |
|
|
0.04 |
|
||||||||
Tax effect on actions |
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
(10,221 |
) |
|
(10,221 |
) |
|
(0.03 |
) |
||||||||
Total restructuring and other action-related charges |
40,229 |
|
|
|
16,374 |
|
|
56,603 |
|
|
56,603 |
|
|
(10,221 |
) |
|
46,382 |
|
|
0.13 |
|
||||||||
As adjusted |
$ |
972,259 |
|
|
|
$ |
(665,570 |
) |
|
$ |
306,689 |
|
|
$ |
218,833 |
|
|
$ |
(30,765 |
) |
|
$ |
188,068 |
|
|
$ |
0.53 |
|
|
As a percentage of net sales |
35.4 |
|
% |
|
24.2 |
% |
|
11.2 |
% |
|
|
|
|
|
|
|
|
1 |
Amounts may not be additive due to rounding. |
TABLE 6-C | |||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
Supplemental Financial Information |
|||||||||||||||||||||||||||||||||
Reconciliation of Select GAAP Measures to Non-GAAP Measures |
|||||||||||||||||||||||||||||||||
(in thousands, except per share data) |
|||||||||||||||||||||||||||||||||
(Unaudited) |
|||||||||||||||||||||||||||||||||
|
Quarter Ended |
||||||||||||||||||||||||||||||||
|
|
|
Gross Profit |
|
Selling, General
|
|
Operating
|
Income
|
|
Income Tax
|
|
Income
|
|
Diluted
|
|||||||||||||||||||
As reported |
$ |
1,636,709 |
|
|
$ |
604,182 |
|
|
$ |
(384,289 |
) |
|
$ |
219,893 |
|
$ |
165,645 |
|
|
$ |
(15,595 |
) |
|
|
$ |
150,050 |
|
|
$ |
0.41 |
|
||
Less exited programs2 |
(118,710 |
) |
|
(35,169 |
) |
|
9,712 |
|
|
(25,457 |
) |
(25,457 |
) |
|
3,590 |
|
|
|
(21,867 |
) |
|
(0.06 |
) |
||||||||||
As rebased |
1,517,999 |
|
|
569,013 |
|
|
(374,577 |
) |
|
194,436 |
|
140,188 |
|
|
(12,005 |
) |
|
|
128,183 |
|
|
0.35 |
|
||||||||||
As a percentage of net sales |
|
|
37.5 |
% |
|
|
24.7 |
% |
|
|
12.8 |
% |
|
|
|
|
|
|
|
||||||||||||||
Restructuring and other action-related charges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Supply chain actions |
— |
|
|
12,429 |
|
|
— |
|
|
12,429 |
|
12,429 |
|
|
— |
|
|
|
12,429 |
|
|
0.03 |
|
||||||||||
Tax effect on actions |
— |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
|
(1,753 |
) |
|
|
(1,753 |
) |
|
0.00 |
|
||||||||||
Total restructuring and other action-related charges |
— |
|
|
12,429 |
|
|
— |
|
|
12,429 |
|
12,429 |
|
|
(1,753 |
) |
|
|
10,676 |
|
|
0.03 |
|
||||||||||
As adjusted |
$ |
1,517,999 |
|
|
$ |
581,442 |
|
|
$ |
(374,577 |
) |
|
$ |
206,865 |
|
$ |
152,617 |
|
|
$ |
(13,758 |
) |
|
|
$ |
138,859 |
|
|
$ |
0.38 |
|
||
As a percentage of net sales |
|
|
|
38.3 |
% |
|
|
24.7 |
% |
|
13.6 |
% |
|
|
|
|
|
|
|
|
Six Months Ended |
||||||||||||||||||||||||||||||||
|
|
|
Gross Profit |
|
Selling, General
|
|
Operating
|
|
Income
|
|
Income Tax
|
|
Income
|
|
Diluted
|
||||||||||||||||||
As reported |
$ |
3,086,396 |
|
|
|
$ |
1,149,104 |
|
$ |
(789,603 |
) |
|
$ |
359,501 |
|
$ |
250,284 |
|
|
$ |
(24,579 |
) |
|
$ |
225,705 |
|
|
$ |
0.62 |
|
|||
Less exited programs2 |
(212,814 |
) |
|
|
(65,057 |
) |
|
18,677 |
|
(46,380 |
) |
|
(46,380 |
) |
|
6,540 |
|
|
(39,840 |
) |
|
(0.11 |
) |
||||||||||
As rebased |
2,873,582 |
|
|
|
1,084,047 |
|
(770,926 |
) |
|
313,121 |
|
203,904 |
|
|
(18,039 |
) |
|
185,865 |
|
|
0.51 |
|
|||||||||||
As a percentage of net sales |
|
|
37.7 |
% |
|
26.8 |
% |
|
10.9 |
% |
|
|
|
|
|
|
|
|
|||||||||||||||
Restructuring and other action-related charges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Supply chain actions |
— |
|
|
|
29,902 |
|
— |
|
29,902 |
|
29,902 |
|
|
— |
|
|
29,902 |
|
|
0.08 |
|
||||||||||||
Other restructuring costs |
— |
|
|
|
— |
|
3,703 |
|
3,703 |
|
3,703 |
|
|
— |
|
|
3,703 |
|
|
0.01 |
|
||||||||||||
Tax effect on actions |
— |
|
|
|
— |
|
— |
|
— |
|
|
— |
|
|
(4,738 |
) |
|
(4,738 |
) |
|
(0.01 |
) |
|||||||||||
Total restructuring and other action-related charges |
— |
|
|
|
29,902 |
|
3,703 |
|
33,605 |
|
33,605 |
|
|
(4,738 |
) |
|
28,867 |
|
|
0.08 |
|
||||||||||||
As adjusted |
$ |
2,873,582 |
|
|
|
$ |
1,113,949 |
|
$ |
(767,223 |
) |
|
$ |
346,726 |
|
$ |
237,509 |
|
|
$ |
(22,777 |
) |
|
$ |
214,732 |
|
|
$ |
0.59 |
|
|||
As a percentage of net sales |
|
|
38.8 |
% |
|
26.7 |
% |
|
12.1 |
% |
|
|
|
|
|
|
|
|
|||||||||||||||
1 |
Amounts may not be additive due to rounding. |
|
2 |
Includes the results for the exited C9 Champion mass program and the |
TABLE 6-D |
||||||||||||||||||||
|
||||||||||||||||||||
Supplemental Financial Information |
||||||||||||||||||||
Reconciliation of Select GAAP Measures to Non-GAAP Measures |
||||||||||||||||||||
(in thousands, except per share data) |
||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||
|
Quarter Ended |
|||||||||||||||||||
|
As Reported |
|
Less:Exited
|
|
Adjusted for
|
|
Less:
|
|
Rebased |
|||||||||||
Segment net sales: |
|
|
|
|
|
|
|
|
|
|||||||||||
Innerwear |
$ |
678,604 |
|
|
$ |
21,127 |
|
|
$ |
657,477 |
|
|
$ |
— |
|
|
$ |
657,477 |
|
|
Activewear |
448,277 |
|
|
97,583 |
|
|
350,694 |
|
|
— |
|
|
350,694 |
|
||||||
International |
430,819 |
|
|
— |
|
|
430,819 |
|
|
— |
|
|
430,819 |
|
||||||
Other |
79,009 |
|
|
— |
|
|
79,009 |
|
|
— |
|
|
79,009 |
|
||||||
Total net sales |
$ |
1,636,709 |
|
|
$ |
118,710 |
|
|
$ |
1,517,999 |
|
|
$ |
— |
|
|
$ |
1,517,999 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Segment operating profit: |
|
|
|
|
|
|
|
|
|
|||||||||||
Innerwear |
$ |
149,530 |
|
|
$ |
2,533 |
|
|
$ |
146,997 |
|
|
$ |
— |
|
|
$ |
146,997 |
|
|
Activewear |
68,779 |
|
|
22,924 |
|
|
45,855 |
|
|
— |
|
|
45,855 |
|
||||||
International |
66,490 |
|
|
— |
|
|
66,490 |
|
|
— |
|
|
66,490 |
|
||||||
Other |
7,994 |
|
|
— |
|
|
7,994 |
|
|
— |
|
|
7,994 |
|
||||||
General corporate expenses/other |
(60,471 |
) |
|
— |
|
|
(60,471 |
) |
|
— |
|
|
(60,471 |
) |
||||||
Restructuring and other action-related charges |
(12,429 |
) |
|
— |
|
|
(12,429 |
) |
|
(12,429 |
) |
|
— |
|
||||||
Total operating profit |
$ |
219,893 |
|
|
$ |
25,457 |
|
|
$ |
194,436 |
|
|
$ |
(12,429 |
) |
|
$ |
206,865 |
|
|
Six Months Ended |
||||||||||||||||||
|
As Reported |
|
Less: Exited
|
|
Adjusted for
|
|
Less:
|
|
Rebased |
||||||||||
Segment net sales: |
|
|
|
|
|
|
|
|
|
||||||||||
Innerwear |
$ |
1,154,549 |
|
|
$ |
30,658 |
|
|
$ |
1,123,891 |
|
|
$ |
— |
|
|
$ |
1,123,891 |
|
Activewear |
853,617 |
|
|
182,156 |
|
|
671,461 |
|
|
— |
|
|
671,461 |
|
|||||
International |
921,648 |
|
|
— |
|
|
921,648 |
|
|
— |
|
|
921,648 |
|
|||||
Other |
156,582 |
|
|
— |
|
|
156,582 |
|
|
— |
|
|
156,582 |
|
|||||
Total net sales |
$ |
3,086,396 |
|
|
$ |
212,814 |
|
|
$ |
2,873,582 |
|
|
$ |
— |
|
|
$ |
2,873,582 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Segment operating profit: |
|
|
|
|
|
|
|
|
|
||||||||||
Innerwear |
$ |
254,156 |
|
|
$ |
4,033 |
|
|
$ |
250,123 |
|
|
$ |
— |
|
|
$ |
250,123 |
|
Activewear |
112,372 |
|
|
42,347 |
|
|
70,025 |
|
|
— |
|
|
70,025 |
|
|||||
International |
151,266 |
|
|
— |
|
|
151,266 |
|
|
— |
|
|
151,266 |
|
|||||
Other |
10,429 |
|
|
— |
|
|
10,429 |
|
|
— |
|
|
10,429 |
|
|||||
General corporate expenses/other |
(135,117 |
) |
|
— |
|
|
(135,117 |
) |
|
— |
|
|
(135,117 |
) |
|||||
Restructuring and other action-related charges |
(33,605 |
) |
|
— |
|
|
(33,605 |
) |
|
(33,605 |
) |
|
— |
|
|||||
Total operating profit |
$ |
359,501 |
|
|
$ |
46,380 |
|
|
$ |
313,121 |
|
|
$ |
(33,605 |
) |
|
$ |
346,726 |
|
1 |
Includes the results for the exited C9 Champion mass program and the |
TABLE 6-E |
||||||||
|
||||||||
Supplemental Financial Information |
||||||||
Reconciliation of Select GAAP Measures to Non-GAAP Measures |
||||||||
(in thousands, except per share data) |
||||||||
(Unaudited) |
||||||||
|
Last Twelve Months |
|||||||
|
|
|
|
|||||
EBITDA1: |
|
|
|
|||||
Income from continuing operations |
$ |
102,294 |
|
|
$ |
489,305 |
|
|
Interest expense, net |
174,036 |
|
|
159,927 |
|
|||
Income tax expense (benefit) |
(90,551 |
) |
|
66,201 |
|
|||
Depreciation and amortization |
116,442 |
|
|
113,251 |
|
|||
Total EBITDA |
302,221 |
|
|
828,684 |
|
|||
Total restructuring and other action-related charges (excluding tax effect on actions) |
715,650 |
|
|
85,513 |
|
|||
Stock compensation expense |
13,491 |
|
|
10,692 |
|
|||
Total EBITDA, as adjusted |
$ |
1,031,362 |
|
|
$ |
924,889 |
|
|
|
|
|
|
|||||
Net debt: |
|
|
|
|||||
Debt (current and long-term debt) |
$ |
3,684,982 |
|
|
$ |
3,985,631 |
|
|
Notes payable |
— |
|
|
13 |
|
|||
(Less) Cash and cash equivalents |
(667,298 |
) |
|
(556,099 |
) |
|||
Net debt |
$ |
3,017,684 |
|
|
$ |
3,429,545 |
|
|
|
|
|
|
|||||
Net debt/EBITDA, as adjusted |
2.9 |
|
|
3.7 |
|
1 |
Earnings from continuing operations before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP financial measure. |
|
Quarters Ended |
|
Six Months Ended |
|||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Free cash flow1: |
|
|
|
|
|
|
|
|||||||||
Net cash from operating activities |
$ |
195,310 |
|
|
$ |
65,423 |
|
|
$ |
212,256 |
|
|
$ |
(17,793 |
) |
|
Capital expenditures |
(7,527 |
) |
|
(20,753 |
) |
|
(25,331 |
) |
|
(46,512 |
) |
|||||
Free cash flow |
$ |
187,783 |
|
|
$ |
44,670 |
|
|
$ |
186,925 |
|
|
$ |
(64,305 |
) |
1 |
Free cash flow includes the results from continuing and discontinued operations. |
TABLE 7 |
|||||
|
|||||
Supplemental Financial Information |
|||||
Reconciliation of GAAP Outlook to Adjusted Outlook |
|||||
(in thousands, except per share data) |
|||||
(Unaudited) |
|||||
|
Quarter Ended |
|
Quarter Ended |
|
Year Ended |
|
|
|
|
|
|
Operating profit outlook, as calculated under GAAP |
|
|
|
|
|
Restructuring and other action-related charges |
|
|
|
|
|
Operating profit outlook, as adjusted |
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share from continuing operations, as calculated under GAAP1 |
|
|
|
|
|
Restructuring and other action-related charges |
|
|
|
|
|
Diluted earnings per share from continuing operations, as adjusted |
|
|
|
|
|
1 |
The company expects approximately 353 million diluted weighted average shares outstanding for the quarters ended |
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Source: HanesBrands
Data Provided by Refinitiv. Minimum 15 minutes delayed.