02/15/24
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Press Release
HanesBrands Reports Third-Quarter 2018 Financial Results
HanesBrands Reports Third-Quarter 2018 Financial Results
November 1, 2018 at 7:01 AM EDT
- 3Q net sales increase 3 percent with constant-currency organic sales up 1%; Activewear and International sales increase, while Innerwear sales decrease
-
3Q GAAP EPS was
$0.47 and pro forma adjusted EPS excluding actions was$0.55 - Company uses free-cash generation to pay down debt and improve debt leverage
-
Company issues 4Q guidance for GAAP EPS of
$0.42 to $0.46 and adjusted EPS excluding actions of$0.46 to $0.50
Third-quarter net sales increased 3 percent to
In the quarter ended
When excluding the bankruptcy charge, pro forma adjusted operating
profit excluding actions increased 6 percent to
“Our overall results were good and in line with our guidance on a pro
forma basis. We made progress on our long-term goals of continued
organic sales growth, higher profit margins, and reduced debt leverage,”
said Hanes Chief Executive Officer
There are several factors supporting a confident outlook, Evans noted. “Global Champion growth outside the mass channel, which was up 40 percent in constant currency in the quarter, is expected to remain strong,” he said. “And while we were disappointed that Innerwear sales were lower than expected in the third quarter, consumer demand was strong, and we believe that continued underlying strength supports our outlook for improvement.”
Callouts for Third-Quarter 2018 Financial Results
Continued Double-Digit Growth in Champion Drives Organic Growth.
Champion sales increased 30 percent in the third quarter on a
constant-currency basis with strong double-digit growth in
Consumer-Directed Channels Contribute to Sales Growth. Third-quarter net sales benefited from a 15 percent increase in the consumer-directed channels of online and company-owned retail stores, which accounted for 21 percent of total company sales in the quarter.
Underlying Operating Profit Margin Increases as Expected. While operating margin declined 50 basis points to 13.9 percent on a reported GAAP basis, the pro forma adjusted operating margin excluding the bankruptcy charge increased 50 basis points to 15.8 percent as a result of organic growth, pricing actions, integration synergies and new acquisition contributions that more than offset increased brand and growth investment.
Net Debt Reduced and Debt Leverage Lowered. Hanes used its
free-cash generation to pay down debt by approximately
Business Segment Summaries
Innerwear Segment Results Affected by Order Imbalance. U.S. Innerwear segment sales decreased 7 percent, while operating profit decreased 14 percent. The results were lower than expected, primarily as a result of slower replenishment orders compared with strong point-of-sale trends and higher raw material costs.
Innerwear basics sales decreased, with socks and panties sales down and men’s underwear sales up. All three categories had point-of-sale growth. Products featuring innovation now account for 20 percent of basics sales.
Innerwear intimates sales decreased, although the ongoing implementation of revitalization plans for shapewear and bras are beginning to show progress. New product designs and innovation will continue to be rolled out through the first half of 2019.
Activewear Segment Sales and Profits Increase on Champion Growth and Acquisition Benefits. U.S. Activewear segment sales and operating profit each increased 7 percent. Organic sales increased 4 percent, while the Alternative Apparel acquisition also contributed to growth.
Champion sales growth was broad-based, increasing across channels, including sporting goods retailers, mid-tier department stores, college bookstores, mass merchants, online, and company-owned stores.
Net sales for Alternative Apparel, acquired in
Strong International Segment Performance Drivers Include Organic Growth, Acquisitions and Synergies. Despite adverse currency exchange rates, International segment sales increased 11 percent and operating profit increased 27 percent. In constant currency, sales increased 15 percent and operating profit increased 31 percent.
Constant-currency organic sales increased 10 percent, primarily on the
strength of Champion growth in
The segment’s operating margin of 16.1 percent increased 200 basis points over the year-ago quarter, benefiting from organic growth, contributions from Bras N Things, and integration synergies from past acquisitions.
2018 Financial Guidance
Hanes has updated full-year financial guidance for 2018 to reflect
year-to-date results, the bankruptcy of
The company expects full-year 2018 net sales of
In addition to the
Compared with the company’s previous outlook for foreign exchange rates,
the company expects the strengthening dollar to have a greater negative
currency effect on net sales. For the fourth quarter, the company
expects currency exchange rates to reduce sales by
The company’s updated operating cash flow guidance also includes incremental inventory investment to support accelerating Champion growth.
Updated full-year interest expense and other guidance is
Fourth-Quarter Guidance. The company expects fourth-quarter net
sales of approximately
The company expects Innerwear sales in the quarter to be comparable to a year ago, representing a significant improvement from the third-quarter year-over-year results. The outlook is based on strong fundamentals, early-quarter order bookings, and an expectation for shipments to more closely match strong consumer purchase rates that began in the third quarter.
Strong Champion growth is expected to continue to drive increased sales in the Activewear and International segments in the fourth quarter. Based on strong order bookings through the first half of 2019, Champion growth is expected to continue at a significant double-digit rate.
Fourth-quarter GAAP operating profit is expected to be in the range of
Fourth-quarter adjusted operating profit excluding actions is expected
to be in the range of
The company expects pretax charges related to acquisition integration
and other actions in the fourth 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.
For the third-quarter 2018, Hanes has also chosen to present these
non-GAAP measures to investors on a pro forma basis, excluding the
effect of the bankruptcy of
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, second and third quarters of 2018, Hanes incurred nearly
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 regarding future impact of the
TABLE 1 | ||||||||||||||||||||||
HANESBRANDS INC. | ||||||||||||||||||||||
Condensed Consolidated Statements of Income | ||||||||||||||||||||||
(in thousands, except per-share amounts) | ||||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||||
Quarter Ended | Nine Months Ended | |||||||||||||||||||||
September 29, | September 30, | September 29, | September 30, | |||||||||||||||||||
2018 | 2017 | % Change | 2018 | 2017 | % Change | |||||||||||||||||
Net sales | $ | 1,848,707 | $ | 1,799,270 | 2.7 | % | $ | 5,035,654 | $ | 4,826,235 | 4.3 | % | ||||||||||
Cost of sales | 1,136,040 | 1,120,813 | 3,084,110 | 2,962,345 | ||||||||||||||||||
Gross profit | 712,667 | 678,457 | 5.0 | % | 1,951,544 | 1,863,890 | 4.7 | % | ||||||||||||||
As a % of net sales | 38.5 | % | 37.7 | % | 38.8 | % | 38.6 | % | ||||||||||||||
Selling, general and administrative expenses | 455,778 | 419,991 | 1,328,534 | 1,245,290 | ||||||||||||||||||
As a % of net sales | 24.7 | % | 23.3 | % | 26.4 | % | 25.8 | % | ||||||||||||||
Operating profit | 256,889 | 258,466 | (0.6 | )% | 623,010 | 618,600 | 0.7 | % | ||||||||||||||
As a % of net sales | 13.9 | % | 14.4 | % | 12.4 | % | 12.8 | % | ||||||||||||||
Other expenses | 7,285 | 7,043 | 19,616 | 20,010 | ||||||||||||||||||
Interest expense, net | 52,795 | 43,917 | 146,988 | 130,184 | ||||||||||||||||||
Income from continuing operations before income tax expense | 196,809 | 207,506 | 456,406 | 468,406 | ||||||||||||||||||
Income tax expense | 25,388 | 4,150 | 64,943 | 19,804 | ||||||||||||||||||
Income from continuing operations | 171,421 | 203,356 | (15.7 | )% | 391,463 | 448,602 | (12.7 | )% | ||||||||||||||
Loss from discontinued operations, net of tax | — | — | — | (2,097 | ) | |||||||||||||||||
Net income | $ | 171,421 | $ | 203,356 | (15.7 | )% | $ | 391,463 | $ | 446,505 | (12.3 | )% | ||||||||||
Earnings (loss) per share - basic: | ||||||||||||||||||||||
Continuing operations | $ | 0.47 | $ | 0.56 | $ | 1.08 | $ | 1.22 | ||||||||||||||
Discontinued operations | — | — | — | (0.01 | ) | |||||||||||||||||
Net income | $ | 0.47 | $ | 0.56 | (16.1 | )% | $ | 1.08 | $ | 1.21 | (10.7 | )% | ||||||||||
Earnings (loss) per share - diluted: | ||||||||||||||||||||||
Continuing operations | $ | 0.47 | $ | 0.55 | $ | 1.07 | $ | 1.21 | ||||||||||||||
Discontinued operations | — | — | — | (0.01 | ) | |||||||||||||||||
Net income | $ | 0.47 | $ | 0.55 | (14.5 | )% | $ | 1.07 | $ | 1.20 | (10.8 | )% | ||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||||
Basic | 363,510 | 366,083 | 363,338 | 368,885 | ||||||||||||||||||
Diluted | 364,638 | 368,160 | 364,527 | 370,947 | ||||||||||||||||||
TABLE 2 | ||||||||||||||||||||||
HANESBRANDS INC. | ||||||||||||||||||||||
Supplemental Financial Information | ||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
Quarter Ended | Nine Months Ended | |||||||||||||||||||||
September 29, | September 30, | September 29, | September 30, | |||||||||||||||||||
2018 | 2017 | % Change | 2018 | 2017 | % Change | |||||||||||||||||
Segment net sales: | ||||||||||||||||||||||
Innerwear | $ | 599,726 | $ | 644,059 | (6.9 | )% | $ | 1,785,498 | $ | 1,868,255 | (4.4 | )% | ||||||||||
Activewear | 554,953 | 519,496 | 6.8 | 1,306,863 | 1,226,595 | 6.5 | ||||||||||||||||
International | 619,435 | 556,730 | 11.3 | 1,735,184 | 1,509,370 | 15.0 | ||||||||||||||||
Other | 74,593 | 78,985 | (5.6 | ) | 208,109 | 222,015 | (6.3 | ) | ||||||||||||||
Total net sales | $ | 1,848,707 | $ | 1,799,270 | 2.7 | % | $ | 5,035,654 | $ | 4,826,235 | 4.3 | % | ||||||||||
Segment operating profit1: | ||||||||||||||||||||||
Innerwear | $ | 132,244 | $ | 152,983 | (13.6 | )% | $ | 392,792 | $ | 447,233 | (12.2 | )% | ||||||||||
Activewear | 93,605 | 87,497 | 7.0 | 189,400 | 189,819 | (0.2 | ) | |||||||||||||||
International | 99,624 | 78,394 | 27.1 | 253,243 | 191,203 | 32.4 | ||||||||||||||||
Other | 8,400 | 12,109 | (30.6 | ) | 18,187 | 22,453 | (19.0 | ) | ||||||||||||||
General corporate expenses/other | (56,252 | ) | (55,643 | ) | 1.1 | (165,098 | ) | (150,805 | ) | 9.5 | ||||||||||||
Acquisition, integration and other action-related charges | (20,732 | ) | (16,874 | ) | 22.9 | (65,514 | ) | (81,303 | ) | (19.4 | ) | |||||||||||
Total operating profit | $ | 256,889 | $ | 258,466 | (0.6 | )% | $ | 623,010 | $ | 618,600 | 0.7 | % | ||||||||||
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 nine months ended September 29, 2018 and a comparison to prior year: |
Quarter Ended September 29, 2018 | |||||||||||||||||||
Impact from | Organic | ||||||||||||||||||
Reported | Foreign | Constant | |||||||||||||||||
Net Sales |
Acquisitions(1) |
Currency(2) |
Currency | % Change | |||||||||||||||
Segment net sales: | |||||||||||||||||||
Innerwear | $ | 599,726 | $ | — | $ | — | $ | 599,726 | (6.9 | )% | |||||||||
Activewear | 554,953 | 16,093 | — | 538,860 | 3.7 | ||||||||||||||
International | 619,435 | 32,000 | (21,957 | ) | 609,392 | 9.5 | |||||||||||||
Other | 74,593 | — | — | 74,593 | (5.6 | ) | |||||||||||||
Total | $ | 1,848,707 | $ | 48,093 | $ | (21,957 | ) | $ | 1,822,571 | 1.3 | % | ||||||||
Nine Months Ended September 29, 2018 | |||||||||||||||||||
Impact from | Organic | ||||||||||||||||||
Reported | Foreign | Constant | |||||||||||||||||
Net Sales |
Acquisitions(1) |
Currency(2) |
Currency | % Change | |||||||||||||||
Segment net sales: | |||||||||||||||||||
Innerwear | $ | 1,785,498 | $ | — | $ | — | $ | 1,785,498 | (4.4 | )% | |||||||||
Activewear | 1,306,863 | 52,040 | — | 1,254,823 | 2.3 | ||||||||||||||
International | 1,735,184 | 79,587 | 38,449 | 1,617,148 | 7.1 | ||||||||||||||
Other | 208,109 | — | — | 208,109 | (6.3 | ) | |||||||||||||
Total | $ | 5,035,654 | $ | 131,627 | $ | 38,449 | $ | 4,865,578 | 0.8 | % | |||||||||
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) | |||||||
September 29, | December 30, | ||||||
2018 | 2017 | ||||||
Assets | |||||||
Cash and cash equivalents | $ | 398,499 | $ | 421,566 | |||
Trade accounts receivable, net | 1,044,516 | 903,318 | |||||
Inventories | 2,139,281 | 1,874,990 | |||||
Other current assets | 154,909 | 186,496 | |||||
Total current assets | 3,737,205 | 3,386,370 | |||||
Property, net | 607,649 | 623,991 | |||||
Trademarks and other identifiable intangibles, net | 1,586,148 | 1,402,857 | |||||
Goodwill | 1,252,524 | 1,167,007 | |||||
Deferred tax assets | 191,649 | 234,932 | |||||
Other noncurrent assets | 80,331 | 79,618 | |||||
Total assets | $ | 7,455,506 | $ | 6,894,775 | |||
Liabilities | |||||||
Accounts payable and accrued liabilities | $ | 1,506,878 | $ | 1,517,283 | |||
Notes payable | 14,051 | 11,873 | |||||
Accounts Receivable Securitization Facility | 221,979 | 125,209 | |||||
Current portion of long-term debt | 284,220 | 124,380 | |||||
Total current liabilities | 2,027,128 | 1,778,745 | |||||
Long-term debt | 3,863,580 | 3,702,054 | |||||
Pension and postretirement benefits | 386,647 | 405,238 | |||||
Other noncurrent liabilities | 307,563 | 322,536 | |||||
Total liabilities | 6,584,918 | 6,208,573 | |||||
Equity | 870,588 | 686,202 | |||||
Total liabilities and equity | $ | 7,455,506 | $ | 6,894,775 | |||
TABLE 4 | ||||||||
HANESBRANDS INC. | ||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||
(in thousands) | ||||||||
(Unaudited) | ||||||||
Nine Months Ended | ||||||||
September 29, | September 30, | |||||||
2018 | 2017 | |||||||
Operating Activities: | ||||||||
Net income | $ | 391,463 | $ | 446,505 | ||||
Depreciation and amortization | 99,314 | 89,762 | ||||||
Stock compensation expense | 4,621 | 6,351 | ||||||
Other noncash items | 2,781 | (2,648 | ) | |||||
Changes in assets and liabilities, net | (356,890 | ) | (208,880 | ) | ||||
Net cash from operating activities | 141,289 | 331,090 | ||||||
Investing Activities: | ||||||||
Purchases/sales of property and equipment, net, and other | (61,693 | ) | (56,020 | ) | ||||
Acquisition of business, net of cash acquired | (334,916 | ) | (524 | ) | ||||
Disposition of businesses | — | 40,285 | ||||||
Net cash from investing activities | (396,609 | ) | (16,259 | ) | ||||
Financing Activities: | ||||||||
Cash dividends paid | (162,200 | ) | (165,211 | ) | ||||
Share repurchases | — | (299,919 | ) | |||||
Net borrowings on notes payable, debt and other | 416,782 | 97,532 | ||||||
Net cash from financing activities | 254,582 | (367,598 | ) | |||||
Effect of changes in foreign currency exchange rates on cash | 879 | (7,433 | ) | |||||
Change in cash, cash equivalents and restricted cash | 141 | (60,200 | ) | |||||
Cash and cash equivalents at beginning of year | 421,566 | 460,245 | ||||||
Cash, cash equivalents and restricted cash at end of period | 421,707 | 400,045 | ||||||
Less restricted cash at end of period | 23,208 | — | ||||||
Cash and cash equivalents per balance sheet at end of period | $ | 398,499 | $ | 400,045 | ||||
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 September 29, 2018 | ||||||||||||||||||||||||||||||
Acquisition, | ||||||||||||||||||||||||||||||
Integration | Adjusted | |||||||||||||||||||||||||||||
and Other | Sears | Results | ||||||||||||||||||||||||||||
Action- | Bankruptcy | Excluding | ||||||||||||||||||||||||||||
Reported |
% |
related | Adjusted |
% |
Related | Sears |
% |
|||||||||||||||||||||||
GAAP |
Change |
Charges | Results |
Change |
Charges | Bankruptcy |
Change |
|||||||||||||||||||||||
Gross profit | 712,667 | 5.0 | % | 11,760 | 724,427 | 6.4 | % | — | 724,427 | 6.4 | % | |||||||||||||||||||
As a % of net sales | 38.5 | % | 39.2 | % | 39.2 | % | ||||||||||||||||||||||||
— | ||||||||||||||||||||||||||||||
Selling, general and administrative expenses | 455,778 | (8,972 | ) | 446,806 | (14,113 | ) | 432,693 | |||||||||||||||||||||||
As a % of net sales | 24.7 | % | 24.2 | % | 23.4 | % | ||||||||||||||||||||||||
Operating profit | 256,889 | (0.6 | )% | 20,732 | 277,621 | 0.8 | % | 14,113 | 291,734 | 6.0 | % | |||||||||||||||||||
As a % of net sales | 13.9 | % | 15.0 | % | 15.8 | % | ||||||||||||||||||||||||
Interest and other expenses | 60,080 | — | 60,080 | — | 60,080 | |||||||||||||||||||||||||
Income tax expense | 25,388 | 3,089 | 28,477 | 1,821 | 30,298 | |||||||||||||||||||||||||
Diluted earnings per share from continuing operations | $ | 0.47 | (14.5 | )% | $ | 0.05 | $ | 0.52 | (13.3 | )% | $ | 0.03 | $ | 0.55 | (8.3 | )% | ||||||||||||||
Nine Months Ended September 29, 2018 | ||||||||||||||||||||||||||||||
Acquisition, | ||||||||||||||||||||||||||||||
Integration | Adjusted | |||||||||||||||||||||||||||||
and Other | Sears | Results | ||||||||||||||||||||||||||||
Action- | Bankruptcy | Excluding | ||||||||||||||||||||||||||||
Reported |
% |
related | Adjusted |
% |
Related | Sears |
% |
|||||||||||||||||||||||
GAAP |
Change |
Charges | Results |
Change |
Charges | Bankruptcy |
Change |
|||||||||||||||||||||||
Gross profit | 1,951,544 | 4.7 | % | 33,596 | 1,985,140 | 5.3 | % | — | 1,985,140 | 5.3 | % | |||||||||||||||||||
As a % of net sales | 38.8 | % | 39.4 | % | 39.4 | % | ||||||||||||||||||||||||
Selling, general and administrative expenses | 1,328,534 | (31,918 | ) | 1,296,616 | (14,113 | ) | 1,282,503 | |||||||||||||||||||||||
As a % of net sales | 26.4 | % | 25.7 | % | 25.5 | % | ||||||||||||||||||||||||
Operating profit | 623,010 | 0.7 | % | 65,514 | 688,524 | (1.6 | )% | 14,113 | 702,637 | 0.4 | % | |||||||||||||||||||
As a % of net sales | 12.4 | % | 13.7 | % | 14.0 | % | ||||||||||||||||||||||||
Interest and other expenses | 166,604 | 36 | 166,640 | — | 166,640 | |||||||||||||||||||||||||
Income tax expense | 64,943 | 9,946 | 74,889 | 1,821 | 76,710 | |||||||||||||||||||||||||
Diluted earnings per share from continuing operations | $ | 1.07 | (11.6 | )% | $ | 0.15 | $ | 1.23 | (13.4 | )% | $ | 0.03 | $ | 1.26 | (11.3 | )% | ||||||||||||||
Quarter Ended | Nine Months Ended | |||||||||||||||||
September 29, | September 30, | September 29, | September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||
Action and other related charges by category: | ||||||||||||||||||
Hanes Europe Innerwear | $ | 7,076 | $ | 8,136 | $ | 24,107 | $ | 38,528 | ||||||||||
Hanes Australasia | 1,444 | 9,383 | 14,183 | 27,361 | ||||||||||||||
Champion Europe | 350 | 2,528 | 3,308 | 8,096 | ||||||||||||||
Bras N Things | 2,065 | — | 5,341 | — | ||||||||||||||
Smaller acquisitions and other action-related costs | 9,797 | (3,173 | ) | 18,575 | 7,318 | |||||||||||||
Debt refinance charges | — | — | (36 | ) | — | |||||||||||||
Tax effect on actions | (3,089 | ) | (338 | ) | (9,946 | ) | (4,204 | ) | ||||||||||
Total action and other related charges | $ | 17,643 | $ | 16,536 | $ | 55,532 | $ | 77,099 | ||||||||||
Last Twelve Months | ||||||||||||||||||
September 29, | September 30, | |||||||||||||||||
2018 | 2017 | |||||||||||||||||
EBITDA1: | ||||||||||||||||||
Net income from continuing operations | $ | 6,852 | $ | 604,327 | ||||||||||||||
Interest expense, net | 191,239 | 171,337 | ||||||||||||||||
Income tax expense | 518,418 | 25,383 | ||||||||||||||||
Depreciation and amortization | 132,039 | 119,222 | ||||||||||||||||
Total EBITDA | 848,548 | 920,269 | ||||||||||||||||
Total action and other related charges (excluding tax effect on actions) | 182,079 | 175,462 | ||||||||||||||||
Stock compensation expense | 21,852 | 21,839 | ||||||||||||||||
Total EBITDA, as adjusted | $ | 1,052,479 | $ | 1,117,570 | ||||||||||||||
Net debt: | ||||||||||||||||||
Debt (current and long term debt and Accounts Receivable Securitization Facility) | $ | 4,369,779 | $ | 3,971,937 | ||||||||||||||
Notes payable | 14,051 | 23,969 | ||||||||||||||||
(Less) Cash and cash equivalents | (398,499 | ) | (400,045 | ) | ||||||||||||||
Net debt | $ | 3,985,331 | $ | 3,595,861 | ||||||||||||||
Net debt/EBITDA, as adjusted | 3.8 | 3.2 | ||||||||||||||||
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 | |||
December 29, | December 29, | |||
2018 | 2018 | |||
Operating profit outlook, as calculated under GAAP | $236,000 to $251,000 | $860,000 to $875,000 | ||
Acquisition, integration and other action-related charges | $15,000 | $80,000 | ||
Operating profit outlook, as adjusted | $251,000 to $266,000 | $940,000 to $955,000 | ||
Diluted earnings per share from continuing operations, as calculated under GAAP | $0.42 to $0.46 | $1.50 to $1.54 | ||
Acquisition, integration and other action-related charges | $0.04 | $0.19 | ||
Diluted earnings per share from continuing operations, as adjusted | $0.46 to $0.50 | $1.69 to $1.73 | ||
View source version on businesswire.com: https://www.businesswire.com/news/home/20181101005517/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.