02/15/24
8:30 am EST
Most Recent
Press Release
HanesBrands Reports Second-Quarter 2018 Financial Results
HanesBrands Reports Second-Quarter 2018 Financial Results
August 1, 2018 at 6:00 AM EDT
- 2Q financial results, including 4% net sales growth, in line with company guidance
- Company reaffirms full-year 2018 financial guidance
- Company confirms long-term goal for Champion brand global sales
For the quarter ended
GAAP operating profit of
GAAP diluted earnings per share for continuing operations was
Hanes has reiterated its full-year guidance and issued net sales, operating profit and EPS guidance for the third-quarter 2018. (See financial guidance section for details. See Note on Adjusted Measures and Reconciliation to GAAP Measures later in this news release for additional discussion and details.)
“Our results for the second-quarter were consistent with our guidance
and the year is unfolding as we expected,” said Hanes Chief Executive
Officer
Key Callouts for Second-Quarter 2018 Financial Results
The diversification of Hanes’ global business model continued to support the company’s execution of its Sell More, Spend Less and Generate Cash strategies in the second quarter and is expected to contribute to second-half improvement. Key callouts follow.
Growth,
Net sales for Bras N Things, acquired in
Champion sales increased in all geographies. Global Champion sales increased 18 percent in the quarter and were up 16 percent in constant currency.
Global consumer-directed sales, consisting of company retail and online channel sales, increased 20 percent in the second quarter and represented 22 percent of total sales.
Fourth-Consecutive Quarter of Organic Sales Growth.
Constant-currency organic sales, which exclude sales from acquisitions
under a year old and the effects of changes in currency exchange rates,
increased slightly, beating company projection of a slight decrease. In
addition to global Champion growth, organic growth benefited from
innerwear increases in U.S. basics, the
The company expects to deliver higher levels of organic growth in the second half as a result of continued execution of strategic growth initiatives, continued product innovation success, back-to-school alignment with key U.S. retailers, and action plans to stabilize the Innerwear segment’s U.S. intimate apparel business.
First-Half Operating Profit Affected by Inflation and Inefficiencies, but Second-Half Margin Expansion Expected. Similar to the first quarter, second-quarter operating profit was affected by input-cost inflation and expected increased expenses for investment in brand building and temporary distribution inefficiencies. Those factors offset benefits from acquisition synergies and strong International segment operating profit growth.
The company expects a return to margin expansion in the second half as a result of additional acquisition synergies and accelerated organic sales growth.
Tax Reform Effect on EPS Comparisons. U.S. tax reform, which resulted in a higher corporate tax rate for Hanes beginning in 2018, affects the year-over-year comparisons for EPS. When applying the 2018 second-quarter tax rate to 2017 second-quarter results on a pro forma basis, GAAP EPS decreased 7 percent and adjusted EPS decreased 6 percent.
Business Segment Summaries
Innerwear Segment’s Mixed Results Consistent with Expectations. U.S. Innerwear segment sales decreased 3 percent, while operating profit decreased 10 percent as a result of raw material inflation and mix of products sold.
Sales of Innerwear basics increased slightly as point-of-sale trends improved, men’s underwear sales increased, and women’s underwear returned to growth. Innovation continues to work, with strong performance of the newly launched Hanes Comfort Flex Fit men’s boxer briefs.
Innerwear Intimates sales decreased in the quarter, although progress was made on key aspects of the company’s plan to stabilize the business and then return to growth. As the company managed through retailer door closures and market trends, it successfully gained traction with bra space gains in the mass channel and new bra programs in the midtier channel. The company continues to prepare for a relaunch of its shapewear programs late in the third quarter.
Activewear Segment Sales Increase on Acquisition Benefits and Organic Growth. U.S. Activewear segment sales increased 7 percent, including a 1.5 percent increase in organic sales fueled by growth of Champion and the licensed sports apparel business. Segment operating profit decreased 3 percent due to higher raw material costs, start-up manufacturing inefficiencies, and temporary distribution costs.
The acquisition of Alternative Apparel contributed
Strong International Segment Performance Drivers Include Acquisitions, Organic Growth, and Synergies. International segment sales increased 15 percent and operating profit increased 27 percent. In constant currency, sales increased 12 percent and operating profit increased 24 percent.
Constant-currency organic sales increased 5 percent, primarily on the
strength of Champion growth in
The segment’s operating margin of 14 percent increased nearly 140 basis points over the year-ago quarter, benefitting from organic growth and integration synergies from past acquisitions.
Long-Term Champion Outlook
“The C9 by Champion program at
The C9 program is fully booked for 2018 and the conclusion of the
contract is not expected to have a meaningful effect on the company’s
outlook for 2019. In the past 12 months, the company generated
approximately
With the brand’s forecasted growth rate, the company continues to expect
to achieve global Champion sales of more than
“Target is a great retail partner, and we look forward to continuing to drive mutual growth with our leading national apparel brands across multiple product categories,” Evans said.
2018 Financial Guidance
Hanes has reiterated full-year financial guidance for 2018, despite a strengthening U.S. dollar, and has issued third-quarter guidance for net sales, operating profit and EPS.
The company continues to expect full-year 2018 net sales of
Compared with the previous outlook for foreign exchange rates in the
second half, the company now expects the strengthening dollar to reduce
net sales growth by
With U.S. income tax reform, the company expects the 2018 full-year tax rate to be approximately 16 percent.
Third-Quarter Guidance. The company expects a return to margin expansion in the second half and an increase in the organic growth rate.
Third-quarter net sales are expected to be in the range of
GAAP operating profit is expected to be
The company expects pretax charges related to acquisition integration
and other actions in the third quarter of approximately
Hanes 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 guidance prepared in accordance with generally accepted accounting principles, the company provides quarterly and full-year results and guidance concerning certain non‐GAAP financial measures, including adjusted EPS, adjusted net income, adjusted operating profit (and margin), adjusted SG&A, adjusted gross profit (and margin), EBITDA and adjusted EBITDA.
Adjusted EPS is defined as diluted EPS from continuing operations excluding actions and the tax effect on actions. Adjusted net income is defined as net income from continuing operations excluding actions and the tax effect on actions. Adjusted operating profit is defined as operating profit excluding actions. Adjusted gross profit is defined as gross profit excluding actions. Adjusted SG&A is defined as selling, general and administrative expenses excluding actions.
Charges for actions taken year to date and for guidance for the full year primarily represent acquisition and integration costs related to Hanes Europe Innerwear, Hanes Australasia, Champion Europe, Alternative Apparel and Bras N Things, and other costs related to supply chain network changes. Acquisition and integration costs include legal fees, consulting fees, bank fees, severance costs, certain purchase accounting items, facility closures, inventory write-offs, information technology integration costs and similar charges. 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 the future depending upon acquisition activity.
Hanes 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 acquisitions and other actions. Hanes 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 and integration of any of the aforementioned actions taken.
In addition, the company has 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 earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA excluding actions and stock compensation expense. Hanes 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.
Hanes is a global company that reports financial information in U.S. dollars in accordance with GAAP. As a supplement to the company’s reported operating results, Hanes also presents constant-currency financial information, which is a non-GAAP financial measure that excludes the impact of translating foreign currencies into U.S. dollars. The company uses constant-currency information to provide a framework to assess how the business performed excluding the effects of changes in the rates used to calculate foreign currency translation.
Hanes believes this information is useful to management and investors to facilitate comparison of operating results and better identify trends in the company’s businesses.
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 U.S. dollar are translated into U.S. dollars at the average exchange rates in effect during the comparable period of the prior year (rather than the actual exchange rates in effect during the current year period).
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.
In the first and second quarters of 2018, Hanes incurred
For 2018 guidance, Hanes expects full-year GAAP EPS of
Webcast Conference Call
Hanes will host an Internet webcast of its second-quarter investor
conference call at
An archived replay of the conference call webcast will be available in
the investors section of the Hanes corporate website. A telephone
playback will be available from approximately
Cautionary Statement Concerning Forward-Looking Statements
This press release contains certain forward-looking statements, as
defined under U.S. federal securities laws, with respect to our
long-term goals and trends associated with our business, as well as
guidance as to future performance. In particular, among others,
statements following the heading 2018 Financial Guidance, are
forward-looking statements. These forward-looking statements are based
on our current intent, beliefs, plans and expectations. Readers are
cautioned not to place any undue reliance on any forward-looking
statements. Forward-looking statements necessarily involve risks and
uncertainties, many of which are outside of our control, that could
cause actual results to differ materially from such statements and from
our historical results and experience. These risks and uncertainties
include such things as: the highly competitive and evolving nature of
the industry in which we compete; the rapidly changing retail
environment; any inadequacy, interruption, integration failure or
security failure with respect to our information technology; the impact
of significant fluctuations and volatility in various input costs, such
as cotton and oil-related materials, utilities, freight and wages; our
ability to properly manage strategic projects; significant fluctuations
in foreign exchange rates; our ability to attract and retain a senior
management team with the core competencies needed to support our growth
in global markets; legal, regulatory, political and economic risks
related to our international operations; our ability to successfully
integrate acquired businesses; our reliance on a relatively small number
of customers for a significant portion of our sales; and other risks
identified from time to time in our most recent
TABLE 1
HANESBRANDS INC. Condensed Consolidated Statements of Income (in thousands, except per-share amounts) (Unaudited) |
||||||||||||||||||||||||||||
Quarter Ended | Six Months Ended | |||||||||||||||||||||||||||
June 30, |
July 1, 2017 |
% Change |
June 30, 2018 |
July 1, 2017 |
% Change | |||||||||||||||||||||||
Net sales | $ | 1,715,443 | $ | 1,646,610 | 4.2 | % | $ | 3,186,947 | $ | 3,026,965 | 5.3 | % | ||||||||||||||||
Cost of sales | 1,055,487 | 1,000,708 | 1,948,070 | 1,841,532 | ||||||||||||||||||||||||
Gross profit | 659,956 | 645,902 | 2.2 | % | 1,238,877 | 1,185,433 | 4.5 | % | ||||||||||||||||||||
As a % of net sales | 38.5 | % | 39.2 | % | 38.9 | % | 39.2 | % | ||||||||||||||||||||
Selling, general and administrative expenses | 439,893 | 412,197 | 872,756 | 825,299 | ||||||||||||||||||||||||
As a % of net sales | 25.6 | % | 25.0 | % | 27.4 | % | 27.3 | % | ||||||||||||||||||||
Operating profit | 220,063 | 233,705 | (5.8 | )% | 366,121 | 360,134 | 1.7 | % | ||||||||||||||||||||
As a % of net sales | 12.8 | % | 14.2 | % | 11.5 | % | 11.9 | % | ||||||||||||||||||||
Other expenses | 6,570 | 6,422 | 12,331 | 12,967 | ||||||||||||||||||||||||
Interest expense, net | 48,430 | 44,130 | 94,193 | 86,267 | ||||||||||||||||||||||||
Income from continuing operations before income tax expense | 165,063 | 183,153 | 259,597 | 260,900 | ||||||||||||||||||||||||
Income tax expense | 24,430 | 10,989 | 39,555 | 15,654 | ||||||||||||||||||||||||
Income from continuing operations | 140,633 | 172,164 | (18.3 | )% | 220,042 | 245,246 | (10.3 | )% | ||||||||||||||||||||
Income (loss) from discontinued operations, net of tax | — | 368 | — | (2,097 | ) | |||||||||||||||||||||||
Net income | $ | 140,633 | $ | 172,532 | (18.5 | )% | $ | 220,042 | $ | 243,149 | (9.5 | )% | ||||||||||||||||
Earnings (loss) per share - basic: | ||||||||||||||||||||||||||||
Continuing operations | $ | 0.39 | $ | 0.47 | $ | 0.61 | $ | 0.66 | ||||||||||||||||||||
Discontinued operations | — | — | — | (0.01 | ) | |||||||||||||||||||||||
Net income | $ | 0.39 | $ | 0.47 | (17.0 | )% | $ | 0.61 | $ | 0.66 | (7.6 | )% | ||||||||||||||||
Earnings (loss) per share - diluted: | ||||||||||||||||||||||||||||
Continuing operations | $ | 0.39 | $ | 0.47 | $ | 0.61 | $ | 0.66 | ||||||||||||||||||||
Discontinued operations | — | — | — | (0.01 | ) | |||||||||||||||||||||||
Net income | $ | 0.39 | $ | 0.47 | (17.0 | )% | $ | 0.61 | $ | 0.65 | (6.2 | )% | ||||||||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||||||||||
Basic | 362,011 | 365,911 | 361,944 | 370,075 | ||||||||||||||||||||||||
Diluted | 363,254 | 367,992 | 363,245 | 372,147 | ||||||||||||||||||||||||
TABLE 2
HANESBRANDS INC. Supplemental Financial Information (in thousands) (Unaudited) |
||||||||||||||||||||||||||||
Quarter Ended | Six Months Ended | |||||||||||||||||||||||||||
June 30, 2018 |
July 1, 2017 |
% Change |
June 30, 2018 |
July 1, 2017 |
% Change | |||||||||||||||||||||||
Segment net sales: | ||||||||||||||||||||||||||||
Innerwear | $ | 694,694 | $ | 719,006 | (3.4 | )% | $ | 1,185,772 | $ | 1,224,196 | (3.1 | )% | ||||||||||||||||
Activewear | 405,785 | 379,756 | 6.9 | 751,910 | 707,099 | 6.3 | ||||||||||||||||||||||
International | 545,862 | 475,242 | 14.9 | 1,115,749 | 952,640 | 17.1 | ||||||||||||||||||||||
Other | 69,102 | 72,606 | (4.8 | ) | 133,516 | 143,030 | (6.7 | ) | ||||||||||||||||||||
Total net sales | $ | 1,715,443 | $ | 1,646,610 | 4.2 | % | $ | 3,186,947 | $ | 3,026,965 | 5.3 | % | ||||||||||||||||
Segment operating profit1: | ||||||||||||||||||||||||||||
Innerwear | $ | 159,129 | $ | 177,628 | (10.4 | )% | $ | 260,548 | $ | 294,250 | (11.5 | )% | ||||||||||||||||
Activewear | 57,508 | 58,972 | (2.5 | ) | 95,795 | 102,322 | (6.4 | ) | ||||||||||||||||||||
International | 76,558 | 60,147 | 27.3 | 153,619 | 112,809 | 36.2 | ||||||||||||||||||||||
Other | 7,160 | 7,716 | (7.2 | ) | 9,787 | 10,344 | (5.4 | ) | ||||||||||||||||||||
General corporate expenses/other | (55,127 | ) | (44,696 | ) | 23.3 | (108,846 | ) | (95,162 | ) | 14.4 | ||||||||||||||||||
Acquisition, integration and other action-related charges | (25,165 | ) | (26,062 | ) | (3.4 | ) | (44,782 | ) | (64,429 | ) | (30.5 | ) | ||||||||||||||||
Total operating profit | $ | 220,063 | $ | 233,705 | (5.8 | )% | $ | 366,121 | $ | 360,134 | 1.7 | % | ||||||||||||||||
¹ | In the first quarter of 2018, HanesBrands eliminated the allocation of certain corporate overhead selling, general and administrative expenses related to the legal, human resources, information technology, finance and real estate departments to the segments, in order to reflect the manner in which the business is managed and results are reviewed by the chief executive officer, who is HanesBrands’ chief operating decision maker. Prior year segment operating profit disclosures have been revised to conform to the current year presentation. | |
The following tables present a reconciliation of total reported net sales to organic constant currency net sales for the quarter and six months ended June 30, 2018 and a comparison to prior year: |
Quarter Ended June 30, 2018 | ||||||||||||||||||||||||
Reported |
Acquisitions1 |
Impact from |
Organic |
% Change |
||||||||||||||||||||
Segment net sales: | ||||||||||||||||||||||||
Innerwear | $ | 694,694 | $ | — | $ | — | $ | 694,694 | (3.4 | )% | ||||||||||||||
Activewear | 405,785 | 20,317 | — | 385,468 | 1.5 | |||||||||||||||||||
International | 545,862 | 31,450 | 15,547 | 498,865 | 5.0 | |||||||||||||||||||
Other | 69,102 | — | — | 69,102 | (4.8 | ) | ||||||||||||||||||
Total | $ | 1,715,443 | $ | 51,767 | $ | 15,547 | $ | 1,648,129 | 0.1 | % | ||||||||||||||
Six Months Ended June 30, 2018 | ||||||||||||||||||||||||
Reported |
Acquisitions1 |
Impact from |
Organic |
% Change |
||||||||||||||||||||
Segment net sales: | ||||||||||||||||||||||||
Innerwear | $ | 1,185,772 | $ | — | $ | — | $ | 1,185,772 | (3.1 | )% | ||||||||||||||
Activewear | 751,910 | 35,947 | — | 715,963 | 1.3 | |||||||||||||||||||
International | 1,115,749 | 47,587 | 60,406 | 1,007,756 | 5.8 | |||||||||||||||||||
Other | 133,516 | — | — | 133,516 | (6.7 | ) | ||||||||||||||||||
Total | $ | 3,186,947 | $ | 83,534 | $ | 60,406 | $ | 3,043,007 | 0.5 | % | ||||||||||||||
1 |
Net sales derived from businesses acquired within the past twelve months. | |
2 |
Effect of the change in foreign currency exchange rates year-over-year. Calculated by applying prior period exchange rates to the current year net sales. This calculation excludes entities acquired within the past twelve months. | |
TABLE 3
HANESBRANDS INC. Condensed Consolidated Balance Sheets (in thousands) (Unaudited) |
|||||||||
June 30, |
December 30, |
||||||||
Assets | |||||||||
Cash and cash equivalents | $ | 397,971 | $ | 421,566 | |||||
Trade accounts receivable, net | 973,807 | 903,318 | |||||||
Inventories | 2,112,211 | 1,874,990 | |||||||
Other current assets | 132,757 | 186,496 | |||||||
Total current assets | 3,616,746 | 3,386,370 | |||||||
Property, net | 617,302 | 623,991 | |||||||
Trademarks and other identifiable intangibles, net | 1,610,567 | 1,402,857 | |||||||
Goodwill | 1,259,010 | 1,167,007 | |||||||
Deferred tax assets | 218,269 | 234,932 | |||||||
Other noncurrent assets | 105,992 | 79,618 | |||||||
Total assets | $ | 7,427,886 | $ | 6,894,775 | |||||
Liabilities | |||||||||
Accounts payable and accrued liabilities | $ | 1,441,536 | $ | 1,517,283 | |||||
Notes payable | 14,540 | 11,873 | |||||||
Accounts Receivable Securitization Facility | 153,386 | 125,209 | |||||||
Current portion of long-term debt | 181,349 | 124,380 | |||||||
Total current liabilities | 1,790,811 | 1,778,745 | |||||||
Long-term debt | 4,149,201 | 3,702,054 | |||||||
Pension and postretirement benefits | 388,256 | 405,238 | |||||||
Other noncurrent liabilities | 332,427 | 322,536 | |||||||
Total liabilities | 6,660,695 | 6,208,573 | |||||||
Equity | 767,191 | 686,202 | |||||||
Total liabilities and equity | $ | 7,427,886 | $ | 6,894,775 | |||||
TABLE 4
HANESBRANDS INC. Condensed Consolidated Statements of Cash Flows (in thousands) (Unaudited) |
||||||||||
Six Months Ended | ||||||||||
June 30, 2018 |
July 1, 2017 |
|||||||||
Operating Activities: | ||||||||||
Net income | $ | 220,042 | $ | 243,149 | ||||||
Depreciation and amortization | 65,493 | 58,095 | ||||||||
Stock compensation expense | 3,033 | 4,388 | ||||||||
Other noncash items | (2,082 | ) | 13,539 | |||||||
Changes in assets and liabilities, net | (350,884 | ) | (284,921 | ) | ||||||
Net cash from operating activities | (64,398 | ) | 34,250 | |||||||
Investing Activities: | ||||||||||
Purchases/sales of property and equipment, net, and other | (38,800 | ) | (26,460 | ) | ||||||
Acquisition of business, net of cash acquired | (334,916 | ) | (524 | ) | ||||||
Disposition of businesses | — | 40,285 | ||||||||
Net cash from investing activities | (373,716 | ) | 13,301 | |||||||
Financing Activities: | ||||||||||
Cash dividends paid | (108,115 | ) | (110,529 | ) | ||||||
Share repurchases | — | (299,919 | ) | |||||||
Net borrowings on notes payable, debt and other | 525,998 | 355,237 | ||||||||
Net cash from financing activities | 417,883 | (55,211 | ) | |||||||
Effect of changes in foreign currency exchange rates on cash | 20,176 | (3,170 | ) | |||||||
Change in cash, cash equivalents and restricted cash | (55 | ) | (10,830 | ) | ||||||
Cash and cash equivalents at beginning of year | 421,566 | 460,245 | ||||||||
Cash, cash equivalents and restricted cash at end of period | 421,511 | 449,415 | ||||||||
Less restricted cash at end of period | 23,540 | — | ||||||||
Cash and cash equivalents per balance sheet at end of period | $ | 397,971 | $ | 449,415 | ||||||
TABLE 5
HANESBRANDS INC. Supplemental Financial Information Reconciliation of Select GAAP Measures to Non-GAAP Measures (in thousands, except per-share amounts) (Unaudited) |
||||||||||||||||||||
Quarter Ended | Six Months Ended | |||||||||||||||||||
June 30, |
July 1, 2017 |
June 30, 2018 |
July 1, 2017 |
|||||||||||||||||
Gross profit, as reported under GAAP | $ | 659,956 | $ | 645,902 | $ | 1,238,877 | $ | 1,185,433 | ||||||||||||
Acquisition, integration and other action-related charges | 11,083 | 4,284 | 21,836 | 19,759 | ||||||||||||||||
Gross profit, as adjusted | $ | 671,039 | $ | 650,186 | $ | 1,260,713 | $ | 1,205,192 | ||||||||||||
As a % of net sales | 39.1 | % | 39.5 | % | 39.6 | % | 39.8 | % | ||||||||||||
Selling, general and administrative expenses, as reported under GAAP | $ | 439,893 | $ | 412,197 | $ | 872,756 | $ | 825,299 | ||||||||||||
Acquisition, integration and other action-related charges | (14,082 | ) | (21,778 | ) | (22,946 | ) | (44,670 | ) | ||||||||||||
Selling, general and administrative expenses, as adjusted | $ | 425,811 | $ | 390,419 | $ | 849,810 | $ | 780,629 | ||||||||||||
As a % of net sales | 24.8 | % | 23.7 | % | 26.7 | % | 25.8 | % | ||||||||||||
Operating profit, as reported under GAAP | $ | 220,063 | $ | 233,705 | $ | 366,121 | $ | 360,134 | ||||||||||||
Acquisition, integration and other action-related charges included in gross profit | 11,083 | 4,284 | 21,836 | 19,759 | ||||||||||||||||
Acquisition, integration and other action-related charges included in SG&A | 14,082 | 21,778 | 22,946 | 44,670 | ||||||||||||||||
Operating profit, as adjusted | $ | 245,228 | $ | 259,767 | $ | 410,903 | $ | 424,563 | ||||||||||||
As a % of net sales | 14.3 | % | 15.8 | % | 12.9 | % | 14.0 | % | ||||||||||||
Net income from continuing operations, as reported under GAAP | $ | 140,633 | $ | 172,164 | $ | 220,042 | $ | 245,246 | ||||||||||||
Acquisition, integration and other action-related charges included in gross profit | 11,083 | 4,284 | 21,836 | 19,759 | ||||||||||||||||
Acquisition, integration and other action-related charges included in SG&A | 14,082 | 21,778 | 22,946 | 44,670 | ||||||||||||||||
Debt refinance charges included in other expenses | 14 | — | (36 | ) | — | |||||||||||||||
Tax effect on actions | (3,726 | ) | (1,564 | ) | (6,857 | ) | (3,866 | ) | ||||||||||||
Net income from continuing operations, as adjusted | $ | 162,086 | $ | 196,662 | $ | 257,931 | $ | 305,809 | ||||||||||||
Diluted earnings per share from continuing operations, as reported under GAAP | $ | 0.39 | $ | 0.47 | $ | 0.61 | $ | 0.66 | ||||||||||||
Acquisition and other related charges | 0.06 | 0.07 | 0.10 | 0.16 | ||||||||||||||||
Diluted earnings per share from continuing operations, as adjusted | $ | 0.45 | $ | 0.53 | $ | 0.71 | $ | 0.82 | ||||||||||||
Quarter Ended | Six Months Ended | |||||||||||||||||||
June 30, 2018 |
July 1, 2017 |
June 30, 2018 |
July 1, 2017 |
|||||||||||||||||
Action and other related charges by category: | ||||||||||||||||||||
Hanes Europe Innerwear | $ | 8,455 | $ | 10,514 | $ | 17,031 | $ | 30,392 | ||||||||||||
Hanes Australasia | 6,647 | 5,970 | 12,739 | 17,978 | ||||||||||||||||
Champion Europe | 1,078 | 4,399 | 2,958 | 5,567 | ||||||||||||||||
Bras N Things | 2,031 | — | 3,276 | — | ||||||||||||||||
Smaller acquisitions and other action-related costs | 6,954 | 5,179 | 8,778 | 10,492 | ||||||||||||||||
Debt refinance charges | 14 | — | (36 | ) | — | |||||||||||||||
Tax effect on actions | (3,726 | ) | (1,564 | ) | (6,857 | ) | (3,866 | ) | ||||||||||||
Total action and other related charges | $ | 21,453 | $ | 24,498 | $ | 37,889 | $ | 60,563 | ||||||||||||
Last Twelve Months | ||||||||||||||||||||
June 30, 2018 |
July 1, 2017 |
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EBITDA1: | ||||||||||||||||||||
Net income from continuing operations | $ | 38,787 | $ | 573,761 | ||||||||||||||||
Interest expense, net | 182,361 | 170,853 | ||||||||||||||||||
Income tax expense | 497,180 | 31,803 | ||||||||||||||||||
Depreciation and amortization | 129,885 | 114,443 | ||||||||||||||||||
Total EBITDA | 848,213 | 890,860 | ||||||||||||||||||
Total action and other related charges (excluding tax effect on actions) | 178,221 | 153,884 | ||||||||||||||||||
Stock compensation expense | 22,227 | 28,186 | ||||||||||||||||||
Total EBITDA, as adjusted | $ | 1,048,661 | $ | 1,072,930 | ||||||||||||||||
Net debt: | ||||||||||||||||||||
Debt (current and long term debt and Accounts Receivable Securitization Facility) | $ | 4,483,936 | $ | 4,153,573 | ||||||||||||||||
Notes payable | 14,540 | 72,157 | ||||||||||||||||||
(Less) Cash and cash equivalents | (397,971 | ) | (449,415 | ) | ||||||||||||||||
Net debt | $ | 4,100,505 | $ | 3,776,315 | ||||||||||||||||
Net debt/EBITDA, as adjusted | 3.9 | 3.5 | ||||||||||||||||||
1 |
Earnings from continuing operations before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP financial measure. | |
TABLE 6
HANESBRANDS INC. Supplemental Financial Information Reconciliation of GAAP Outlook to Adjusted Outlook (in thousands, except per-share amounts) (Unaudited) |
||||||
Quarter Ended | Year Ended | |||||
September 29, 2018 |
December 29, 2018 |
|||||
Operating profit outlook, as calculated under GAAP | $265,000 to $280,000 | $870,000 to $905,000 | ||||
Acquisition, integration and other action-related charges | $20,000 | $80,000 | ||||
Operating profit outlook, as adjusted | $285,000 to $300,000 | $950,000 to $985,000 | ||||
Diluted earnings per share from continuing operations, as calculated under GAAP | $0.49 to $0.52 | $1.54 to $1.62 | ||||
Acquisition, integration and other action-related charges | $0.05 | $0.18 | ||||
Diluted earnings per share from continuing operations, as adjusted | $0.54 to $0.57 | $1.72 to $1.80 | ||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20180801005276/en/
Source:
HanesBrands
News Media:
Matt Hall, 336-519-3386
or
Analysts
and Investors:
T.C. Robillard, 336-519-2115
Data Provided by Refinitiv. Minimum 15 minutes delayed.