Winston-Salem - Hanesbrands has posted a 12.5 per increase in net profit for its first quarter, boosted by solid growth in its international business and contributions from recent acquisitions.
The manufacturer of everyday basic apparel posted net income of US$79.4 million, up from $70.6 million in the same period in 2016. For the quarter ended March 31, 2018, the company reported net sales growth of 7 per cent to $1.47 billion versus a guidance range of $1.42 billion to $1.44 billion.
“We are focused on delivering quarterly results consistent with the promises we make in our guidance,” said Hanes Chief Executive Officer Gerald W. Evans Jr. “We’re off to a good start. We are reaping ongoing benefits from diversifying our business through geographic expansion, Champion brand growth globally, and increased sales in the online channel. We have created powerful cash-generating global innerwear and activewear businesses that can leverage our leading market positions and brands, our robust global supply chain, and our global management expertise. This is the engine for creating shareholder value.”
Hanes said that the diversification of its global business model supported its 'Sell More, Spend Less and Generate Cash' strategies in the first quarter. The acquisitions of Bras N Things and Alternative Apparel contributed to sales growth in the quarter, while organic sales growth, driven by increased Champion and online sales, more than offset declines in the U.S. brick-and-mortar channel. International operating profit growth was offset by declines in domestic operating profit. Net sales for Bras N Things, acquired in February 2018, and Alternative Apparel, acquired in October 2017, were $32 million in the quarter.
This offset the expected 3 per cent decrease in US Innerwear segment which also saw operating profit dip 13 per cent, affected by raw material inflation and lower volume.
Innerwear Basics sales decreased less than 1 per cent, with growth in socks and children’s underwear sales offset by declines primarily in women’s underwear. The company’s latest innovation, Hanes Comfort Flex Fit men’s underwear boxer briefs, were successfully introduced in the quarter and met with good consumer reception, the company said.
International sales increased 19 per cent and operating profit increased 46 per cent, benefitting from foreign currency exchange rates, organic growth, synergies from past acquisitions, and contributions from the mid-quarter acquisition of Bras N Things.