HanesBrands reports better Q2 results, EPS increases 58 percent
By Prachi Singh
30 Jul 2020
HanesBrands net sales for the second quarter ended June 27, 2020, were 1.74 billion dollars compared with 1.76 billion dollars a year ago. Excluding the exited programs and foreign exchange rates, the company said in a statement, total constant-currency net sales for the quarter increased 7 percent, while GAAP operating profit increased 5 percent to 242 million dollars and the quarter’s adjusted operating profit excluding actions increased 41 percent to 305 million dollars. The company added that GAAP EPS increased 12 percent to 46 cents and adjusted EPS increased 58 percent to 60 cents.
“The professionalism, ingenuity and dedication of our worldwide employees was on display in generating double-digit EPS growth, establishing a new protective garments business line from scratch, and starting the reopening of manufacturing, distribution and selling in the most safe and effective manner possible. We performed significantly better than our base-case scenario in both our apparel business and our new protective garment business. Point-of-sale trends are improving for apparel, and in the case of U.S. Innerwear basics and U.S. Champion, point-of-sale trends in May and June were higher than pre-COVID levels,” said Hanes Chief Executive Officer Gerald W. Evans Jr.
HanesBrands ecommerce sales improve 70 percent
Second-quarter global online sales increased more than 70 percent through company e-commerce websites, retailer websites, large internet pure-plays, and business-to-business customers. Excluding sales of protective garments, approximately 30 percent of total sales in the quarter were through the online channel.
The company sold 752 million dollars in personal protection garments globally to governments, large organizations, consumers and business-to-business customers. As part of the protective-garment sales in the quarter, the company delivered more than 450 million cloth face coverings and more than 20 million medical gowns to the U.S. government. The company is selling face masks to consumers under its brands, including Hanes, Champion, Bonds and Dim. Excluding the potential for additional government contracts, the company estimates that it could sell more than 150 million dollars of protective garments in the second half of 2020.
As reported, second-quarter International segment total sales declined 20 percent while operating profit decreased 2 percent. On a constant-currency basis, net sales decreased 17 percent and operating profit decreased 3 percent. Excluding protective garment sales, segment revenue declined 44 percent.
U.S. Innerwear segment revenue increased 61 percent and operating profit increased 104 percent. Apparel sales, excluding protective garments decreased by 29 percent. When year-ago results are rebased to reflect the exit of the C9 Champion mass retail program and DKNY intimates license, segment revenue decreased 27 percent.
U.S. Activewear segment sales decreased 62 percent as a result of the pandemic-related demand impacts and 98 million dollars of C9 Champion sales in mass retail in the year-ago quarter. The segment recorded an operating loss in the quarter. When the year-ago quarter is rebased for the C9 Champion program exit, sales decreased 52 percent and operating profit decreased 113 percent.