HanesBrands Q1 Profit Down 19%, But Beats View, Lifts 2014 Earnings Outlook

(RTTNews) - Apparel marketer HanesBrands Inc. (HBI) on Thursday reported a 19 percent decline in profit for the first quarter from last year as higher sales were offset by acquisition and integration charges.

However, adjusted earnings per share beat analysts' expectations, while revenues missed their estimates. Looking ahead to fiscal 2014, the company raised its earnings outlook, but maintained its forecast for sales.

Winston-Salem, North Carolina-based HanesBrands' first-quarter net income was $41.56 million or $0.41 per share, down from $51.38 million or $0.51 per share in the previous-year quarter. The latest quarter's results include charges of $0.35 per share related to the acquisition of Maidenform Brands, Inc. and other actions.

Adjusted earnings for the quarter was $0.76 per share, compared to $0.51 per share in the year-ago period. On average, 13 analysts polled by Thomson Reuters expected the company to report earnings of $0.58 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter grew 12 percent to $1.06 billion from $945.46 million in the same period last year, reflecting the acquisition of Maidenform and Activewear segment growth. Analysts had a consensus revenue estimate of $1.08 billion.

The company noted that excluding the Maidenform acquisition, net sales on a constant currency basis were flat despite the difficult retail environment exacerbated by extreme weather.

Gross margin for the quarter was 33.7 percent, down from 34.6 percent in the year-ago quarter. Operating margin declined to 6.8 percent from 9.0 percent in the prior-year quarter.

Looking ahead to fiscal 2014, HanesBrands raised its outlook for adjusted earnings to a range of $4.80 to $5.00 per share from the prior range of $4.60 to $4.80 per share. However, the company affirmed its outlook for net sales of slightly less than $5.1 billion.

Analysts currently expects earnings of $4.73 per share for the year on revenues of $5.08 billion.

The company expects its acquisition of Maidenform to contribute about $500 million in sales and about $30 million of operating profit in 2014.

HBI closed Wednesday's trading at $75.43, up $1.01 or 1.36 percent on a volume of 1.05 million shares. In after-hours, the stock further gained $3.07 or 4.07 percent to $78.50.