US: Hanesbrands raises guidance as Q2 earnings climb
- Q2 earnings up 27.1%
- Gross margin improves 160 bps
- Sales grow 12%
Hanesbrands raised its full-year adjusted EPS guidance
Underwear maker Hanesbrands Inc has raised its full-year guidance as it revealed second-quarter earnings that beat analyst estimates.
The company posted earnings of US$154.6m, or $1.71 per share, in the three months ended 28 June. This was a 27.1% increase on profit of $121.6m in the prior year period, and beat FBR & Co analyst estimates of EPS of $1.58/$1.50.
The growth was thanks to acquisition benefits, a strong Activewear performance, and increased supply chain manufacturing efficiencies.
This resulted in an adjusted gross margin improvement of 160 basis points to 17.2%.
Sales in the quarter increased 12% to $1.34bn, boosted by the contribution of Maidenform Brands, which it acquired in October last year.
As a result, the company raised its full-year adjusted EPS guidance by $0.40 to $5.20 to $5.40, and refined its expectations for net sales for the year to around $5.07bn.
FBR & Co analyst Susan Anderson noted: "Beyond 2014, we believe that MFB/DBApparel acquisition benefits, use of free cash flow, and cotton price deflation will continue to drive shareholder value and upside. We reiterate our outperform rating for HBI and its status as our top pick."
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