• HanesBrands has reaffirmed its second-quarter 2018 and full-year 2018 guidance.
  • The underwear and activewear maker says it is poised to generate consistent growth and as much free cash flow in the next five years as the previous 11 years combined.
  • Former New Balance Athletics executive, Jonathan Ram, will join Hanes to lead its global activewear businesses, including Champion.
Hanes reaffirmed its second-quarter 2018 and full-year 2018 guidance

Hanes reaffirmed its second-quarter 2018 and full-year 2018 guidance

Underwear and activewear maker HanesBrands has reaffirmed its full-year guidance and hailed its diversified global business model that it claims has the company poised to generate consistent growth and as much free cash flow in the next five years as the previous 11 years combined.

In a statement released earlier this week ahead of its investor shareholder meeting, HanesBrands said in the four years since the company's last investor day, it has transformed itself from a US-centric business supported by a global supply chain into a worldwide basic apparel leader with commercial operations in the Americas, Europe, Asia and Australia that more fully leverage its global supply chain.

"We have expanded our brand portfolio, diversified our business internationally and across channels, and increased the leverage of our powerful global supply chain to deliver more consistent organic growth and higher cash-flow generation," said Hanes CEO Gerald Evans Jr.

Hanes also detailed plans to outline five-year base-case scenarios during the meeting, which are expected to generate consistent organic sales growth, expand margins and increase earnings per share, generate cumulative operating cash flow of around US$4.3bn and cumulative free cash flow approaching $4bn, and create shareholder value through a balanced capital allocation strategy of dividends, share repurchases and acquisitions.

Immediate priorities for the company include continuing to drive double-digit global revenue growth for Champion and the online/consumer-direct channel, returning the US innerwear business to growth, capturing the remaining synergies and ending integration charges for prior acquisitions, and reducing the company's net debt-to-EBITDA ratio.

"Over the next few years, we expect to see meaningful EPS growth from our disciplined capital allocation strategy and modest operating margin expansion," said Hanes CFO Barry Hytinen. "We are well-positioned with strong brands, a proven business model, a commitment to deleverage, strong cash generation, and a balanced capital allocation strategy."

Looking ahead, Hanes reaffirmed its second-quarter 2018 and full-year 2018 guidance. The company continues to expect second-quarter net sales are expected to be in the range of $1.7bn-$1.73bn, and full-year 2018 net sales in the range of $6.72bn-$6.82bn.

Meanwhile, the company announced former New Balance Athletics executive, Jonathan Ram, will join Hanes to lead its global activewear businesses, including Champion, as group president, global activewear, effective 21 May.

Ram most recently served as executive vice president North America at New Balance and formerly as managing director overseeing New Balance's Europe, Middle East, Africa and Mexico businesses. He will report to Hanes CEO Gerald Evans and succeeds John Marsh, who is taking a professional three-year sabbatical to serve an overseas volunteer mission for his church.