US: Price rises help HanesBrands top Q2 forecasts
- Q2 profit rose 1.6% to $86.8m
- Sales increased nearly 14% to $1.23bn
- Operating margin up 70 basis points
Strong growth in its outerwear and international business has helped HanesBrands to a 1.6% rise in second quarter profit, with product price rises helping the T-shirt and underwear maker offset higher input costs.
The Winston-Salem, North Carolina based company, whose brands include Hanes, Champion, Playtex and Wonderbra, said profit in the three months to 2 July rose to $86.8m or $0.87 per share, from $85.4m or $0.87 per share, a year ago.
Sales increased nearly 14% to $1.23bn, up from $1.075bn last time.
"We continued our strong start in 2011 and are performing in line with our growth expectations," said chairman and CEO Richard Noll. "We are leveraging this sales growth with our low-cost global supply chain and tight control of selling, general and administrative costs."
Innerwear sales rose 8%, thanks to double-digit growth in sales of socks, male underwear and women's panties. The company has already raised the price of its cotton-intensive products twice (in February and June) to try to offset rising input costs.
Outerwear sales rose 26%, with strong contributions from Gear For Sports which was acquired last November, as well as Champion activewear.
And in international markets, sales (excluding changes in currency exchange rates) rose 14% in the quarter while operating profit was up 7%, with higher demand in China, India, Japan, Korea, Mexico and Brazil.
The Direct to Consumer and Hosiery segments both swung to higher sales, with Direct up 4% and Hosiery up 6%.
Quarterly operating margin increased 70 basis points over the year-ago period, despite $51m in higher cotton and commodity costs.
Hanes said it still expects full-year earnings to rise 25-24% to between $2.70 and $2.90 per share, with net sales coming in 14-16% higher than last year at $4.9bn to $5bn. The company has locked in its cotton requirements for the full year.
Strong profitability in its core business helped apparel group Hanesbrands to lift third quarter profits by nearly half, significantly outpacing the company's 5% revenue growth....
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