• Sales slip 3% to US$1.47bn from $1.52bn
  • Q2 profit surges 35% to $128.14m
  • Reaffirms full-year guidance 
Hanes has reaffirmed its full-year guidance, expecting 8% growth year-on-year with net sales of $6.15bn to $6.25bn.

Hanes has reaffirmed its full-year guidance, expecting 8% growth year-on-year with net sales of $6.15bn to $6.25bn.

Hanesbrands, one of the world's largest underwear and activewear apparel manufacturers, has said its second-quarter results were in line with expectations but has lowered its guidance for full-year earnings per share.

The North Carolina-based company saw sales dip to US$1.47bn for the three months ended 2 July, compared to $1.52bn in the same period last year, which it blamed on comparisons with strong performance in the year-ago quarter that included expanded shelf space for product launches.

Net profit jumped 35% to $128.14m, compared to $94.9m in the prior year period. On a GAAP basis, operating profit surged 59% to $221m and earnings per share of $0.34. However, excluding acquisition and integration-related charges and other items, operating profit slipped 7% to $246m and adjusted EPS rose 2% to $0.51.

Meanwhile, segment sales in the main fell across the board with innerwear sales dropping 4.7% to $749.2m, activewear sales by 3.6% to $367.4m and direct-to-consumer sales decreasing 3.7% to $86.5m, while international sales climbed 1.9% to $269.7m.

"We are confident in our plans for the year, with our sales, operating profit and EPS performance all tracking right in line with our expectations and consistent with our full-year guidance," says Gerald W Evans Jr, Hanes COO and CEO-elect. "The second quarter, while having a tough comparison as expected to a strong year-ago quarter, came in on plan overall. Our growth initiatives for the second half are unfolding as planned and are tracking to our full-year guidance."

Hanes adds it continues to derive ongoing benefits and synergies from its Maidenform, Knights Apparel, Hanes Europe Innerwear, and Champion Japan acquisitions and integrations. Its most recent addition during the quarter was Champion Europe, while its acquisition of Pacific Brands Limited of Australia completed in mid-July.

For 2016, the company has reaffirmed its full-year guidance, expecting 8% growth year-on-year with net sales of $6.15bn to $6.25bn. However, on a GAAP basis, diluted EPS is lowered to the range of $1.44 to $1.54, compared with the previous range of $1.51 to $1.57.

Hanes adds its guidance includes expectations for the acquisitions of Champion Europe and Pacific Brands which it says will "favour" the fourth quarter, adding around 55% of the net sales contributions from these acquisitions will occur in the final three months.

FBR & Co analyst Susan Anderson notes: "Inventory is in good shape (down ex-Champion Europe sequentially) and is expected to continue to decrease for the remainder of 2016. We expect better core top-line growth in 2H as Hanes rolls out new products (Fresh IQ), continues to gain momentum in women's bras (Comfort Flex), and cycles the biggest Walmart impact in 3Q and easy compares in 4Q."

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