HanesBrands, for the fourth quarter ended December 28, 2019, reported net sales of 1.75 billion dollars, decrease of 1 percent while constant-currency organic sales increased slightly. For the full year, net sales increased 2 percent to 6.97 billion dollars. The company said in a statement that fourth-quarter GAAP EPS and adjusted EPS excluding actions were each 51 cents, increases of 24 percent and 13 percent, respectively. For the full year, GAAP EPS increased 11 percent to 1.64 dollars and adjusted EPS excluding actions increased 5 percent to 1.76 dollars.
“HanesBrands delivered a solid fourth quarter right in line with our guidance and concluded a very successful year with record operating cash flow, significantly reduced debt, continued organic revenue growth, and strong underlying business fundamentals,” said Hanes Chief Executive Officer Gerald W. Evans Jr.
Highlights of HanesBrands’ Q4 and FY19 results
Global Champion sales, the company said, excluding C9 Champion in the US mass channel, totalled 1.9 billion dollars in constant currency in 2019, an increase of 40 percent over last year as a result of expanded product offerings and increased distribution. With balanced growth in the fourth quarter, Champion sales increased 22 percent both domestically and internationally. Total International constant currency organic sales increased 10 percent in the fourth quarter and 12 percent for 2019. In the quarter, sales increased in all International regions, including the Americas, Asia, Australia and Europe.
Consumer-directed sales in constant currency increased 17 percent in the fourth quarter and 16 percent for the full year, while International segment sales increased 7 percent while operating profit decreased 2 percent. On a constant-currency basis, net sales increased 10 percent and operating profit increased 1 percent. Innerwear segment sales decreased 4 percent in the fourth quarter while operating profit increased 5 percent. Segment operating profit margin of 24.6 percent increased 210 basis points. Sales of Innerwear basics decreased 5 percent, while sales of Innerwear intimates decreased 2 percent.
US Activewear segment fourth-quarter sales decreased 7 percent, while segment operating profit in the quarter decreased 8 percent. Champion sales, excluding C9 Champion in the mass channel, increased more than 14 percent in the quarter, while C9 Champion sales decreased 26 percent as that program continued to wind down to conclusion in January 2020.
The Hanes board of directors has declared a regular quarterly cash dividend of 15 cents per share and approved a new share repurchase authorization of up to 40 million shares.
Hanes announces expectations for 2020
The company expects 2020 net sales of 6.675 billion dollars to 6.775 billion dollars, GAAP operating profit of 850 million dollars to 880 million dollars, adjusted operating profit excluding actions of 900 million dollars to 930 million dollars, GAAP EPS of 1.60 dollars to 1.68 dollars, and adjusted EPS excluding actions of 1.72 dollars to 1.80 dollars.
The company added that when comparing the midpoint of 2020 guidance to 2019 results rebased to account for the exits of the C9 Champion and DKNY programs, full-year net sales are expected to increase 3 percent, adjusted operating profit is expected to increase 7 percent, and adjusted EPS is expected to increase 15 percent.
For the first quarter, net sales are expected to be approximately 1.466 billion dollars to 1.496 billion dollars, GAAP operating profit is expected to be 118 million dollars to 128 million dollars, and adjusted operating profit is expected to be 145 million dollars to 155 million dollars and GAAP EPS is expected to be 17 cents to 20 cents, and adjusted EPS is expected to be 23 cents to 26 cents.
For the first-quarter 2020, the midpoint of guidance represents a net sales decrease of 7 percent compared with 2019, GAAP operating profit and adjusted operating profit declines of approximately 18 percent and 12 percent, respectively, and GAAP and adjusted EPS declines of approximately 14 percent and 7 percent, respectively.