US: Cost cuts push Hanesbrands Q2 profits up 125%
Apparel maker Hanesbrands, the company behind brands such as Champion, Wonderbra, Playtex and Bali, saw its second quarter profit more than double, despite a 4.4% reduction in sales.
The company, which specialises in T-shirts and intimate apparel, posted a profit of $57.3m, a 125% jump over last year's $25.4m for the three months to 28 June. Diluted earnings per share soared by 130% to US$0.60.
EPS for the first half was up 149% to $0.97. Second quarter net sales fell 4.4% to $1.07bn, while operating profit for the period was up 28% to $113.1m.
First half operating profit was up 28% to $200.9m.
Hanesbrands said the sales decline reflected the "challenging" sales environment and later back-to-school shipments.
Intimate apparel was particularly affected by soft sales, but international sales were up 20% in the quarter.
"We were pleased with continued earnings per share growth as a result of executing our improvement strategies, despite operating in a tough economic environment," said Hanesbrands CEO Richard A Noll.
"Most of our business improvement initiatives are working, but we are continuing to address sales declines, which were primarily centred around intimate apparel product categories."
The company said its profitability had benefited from cost reduction efforts, including operating fewer and larger facilities in lower-cost countries, distribution centre streamlining and organisation consolidation.
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