HanesBrands Reports Second-Quarter 2020 Financial Results

Nachrichtenquelle: Business Wire (engl.)
30.07.2020, 12:45  |  127   |   |   

HanesBrands (NYSE: HBI), a leading global marketer of branded everyday basic apparel, today announced second-quarter results with double-digit growth in diluted earnings per share despite market disruption from the COVID-19 pandemic.

The earnings growth resulted from the company’s ability to pivot to production and sales of personal protective garments (face masks and medical gowns) combined with relatively strong apparel performance in pandemic conditions, including 68% sales growth in the online channel.

In the midst of the global pandemic, HanesBrands is focused on: serving channels of trade that remain open; reopening production, distribution and selling operations in a safe and prudent manner; generating and preserving cash; and developing a product line of personal protective garments to meet emerging government, commercial and consumer demand.

Net sales for the second quarter ended June 27, 2020, were $1.74 billion compared with $1.76 billion a year ago. The company sold $752 million in protective garments globally. The year-ago quarter included net sales of $119 million from the now exited C9 Champion mass program and the DKNY intimate apparel license. Excluding the exited programs and foreign exchange rates, total constant-currency net sales for second-quarter 2020 increased 7%.

Second-quarter GAAP operating profit increased 5% to $242 million, and the quarter’s adjusted operating profit excluding actions increased 41% to $305 million.

Second-quarter GAAP EPS increased 12% to $0.46, and adjusted EPS excluding actions increased 58% to $0.60. (See the Note on Reconciliation of Select GAAP Measures to Non-GAAP Measures later in this news release for additional discussion and details of actions, which include pandemic-related charges.)

“The HanesBrands organization did a phenomenal job overcoming significant challenges in order to mitigate the effects of the global pandemic,” said Hanes Chief Executive Officer Gerald W. Evans Jr. “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.

“Despite the effects of pandemic-caused disruptions to global economies, our business is in great shape. 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.

“Our brands are strong, and we are gaining market share and building momentum. Our liquidity remains strong allowing us to maintain our quarterly cash dividend and have ample operating flexibility. While there is still near-term uncertainty concerning the ongoing economic impact of the COVID-19 pandemic, we believe we are positioned to drive growth and seize opportunities over the next several years.”

As a result of the COVID-19 pandemic and the lack of visibility to business conditions, Hanes withdrew its quarterly and full-year performance guidance on March 25, 2020. The company then modeled several different financial scenarios based on assumptions of when retailer stores and economies would begin to reopen. Under the company’s base-case scenario, stores were assumed to gradually reopen beginning in late May.

Callouts for Results and Ongoing Operations During the Pandemic

Apparel Sales and Protective Garments Contribute to Results. Apparel sales and protective garment sales both exceeded the company’s base-case scenario for the quarter. The company continues to generate significant sales growth through channels of trade that have remained open during the pandemic, including online, mass retail, dollar store, and food and drug.

On a rebased comparison to a year ago, second-quarter global online sales increased more than 70% through company e-commerce websites, retailer websites, large internet pure-plays, and business-to-business customers. Excluding sales of protective garments, approximately 30% of total sales in the quarter were through the online channel.

The company sold $752 million in personal protection garments globally to governments, large organizations, consumers and business-to-business customers. The sales of the face masks and medical gowns significantly exceeded initial expectations for the new business lines. 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 leading brands globally, including Hanes, Champion, Bonds and Dim, and protective garments represent an ongoing business opportunity. Excluding the potential for additional government contracts, the company estimates that it could sell more than $150 million of protective garments in the second half of 2020.

First-Half Operating Cash Flow Improves, Despite COVID-19 Impact. Operating cash flow of $65 million in the second quarter resulted in a first-half operating cash improvement of approximately $40 million versus a year ago. Working capital discipline, temporary cost reductions, and inventory control and production timeouts contributed to cash generation. Inventory declined 12% versus a year ago.

Second-Quarter Restructuring Charges Related to Planned Actions and Additional COVID-Related Costs. The company incurred approximately $63 million in both planned restructuring actions and additional COVID-related costs in the second quarter. The previously disclosed planned supply chain restructuring actions accounted for $11 million of second-quarter charges. The remaining $52 million of noncash pandemic-related charges incurred in the second quarter consisted of a $20 million write down of intangible assets, $11 million of bad debt expense, and approximately $21 million related to canceled orders of specialized seasonal inventory. (See the Note on Reconciliation of Select GAAP Measures to Non-GAAP Measures later in this news release for additional discussion and details.)

Second-Quarter 2020 Business Segment Summaries

International Segment. As reported, second-quarter International segment total sales declined 20% while operating profit decreased 2%. On a constant-currency basis, net sales decreased 17% and operating profit decreased 3%.

Apparel performance, excluding protective garments, exceeded the company’s base-case scenario with strong online sales growth and strong point-of-sale trends after closed company and retailer stores began to reopen. Excluding protective garment sales, segment revenue declined 44%.

Innerwear Segment. U.S. Innerwear segment results benefited from better-than-expected apparel performance and significant sales of protective garments. Second-quarter segment revenue increased 61% and operating profit increased 104%. Operating-margin enhancement resulted from fixed-cost leverage and SG&A expense control, including temporary cost reductions.

Apparel performance, excluding protective garments, significantly exceeded the company’s pandemic base-case scenario with revenue decreasing 29%. 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%.

Innerwear point-of-sale trends excluding protective garments accelerated through the quarter, turning significantly positive in May and June. Innerwear basics gained more than 300 basis points of market share in the quarter, and Innerwear intimate apparel point-of-sale trends returned to pre-COVID levels entering July.

Activewear Segment. U.S. Activewear second-quarter performance exceeded the company’s base-case pandemic scenario. Segment sales decreased 62% as a result of the pandemic-related demand impacts and $98 million 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% and operating profit decreased 113%. The company maintained Champion marketing investment consistent with the year-ago quarter.

The COVID pandemic resulted in retailer door closures and lower demand for the segment’s printwear and sports apparel businesses. Point-of-sale trends for Champion accelerated as the quarter progressed, and strong positive trends continued in July. Sales through the enhanced Champion.com website increased nearly 200% in the quarter.

2020 Financial Guidance

Due to the continued uncertainty and unpredictability of the COVID-19 pandemic, HanesBrands will not provide quarterly and full-year performance guidance until visibility of the pandemic’s effect on global economies improves.

The decline in apparel sales in the second quarter was better than the company’s base-case scenario. Absent a slowdown of store reopenings or recurrence of store closures, the company anticipates sequential improvement of sales declines in the third and fourth quarters. U.S. Innerwear sales on the strength of basics could return to rebased year-ago levels by the end of the year.

The company is selling face masks to consumers under its leading brands globally. Excluding the potential for additional government contracts, the company estimates that it could sell more than $150 million of protective garments in the second half of 2020, primarily in the third quarter.

The company expects to generate positive cash flow in the second half.

The fiscal year ending Jan. 2, 2021, includes a 53rd week in the fourth quarter. The company has exited the C9 Champion mass program and DKNY license for intimate apparel. The company expects foreign currency exchange rates to reduce net sales and operating profit in 2020.

The company’s tax rate for the second quarter was 17.3%. The company expects its second-half tax rate to be approximately 17.5%.

The company repurchased approximately 14.5 million shares in the first quarter and has suspended share repurchases for the remainder of the year. The weighted average of diluted shares outstanding for the second quarter was 351 million.

Hanes has updated its quarterly frequently-asked-questions document, which is available at www.Hanes.com/faq.

Note on Adjusted Measures, Rebased Measures and Reconciliation to GAAP Measures

To supplement financial results prepared in accordance with generally accepted accounting principles, the company provides quarterly and full-year results concerning certain non‐GAAP financial measures, including adjusted EPS, adjusted net income, adjusted operating profit (and margin), adjusted SG&A, adjusted gross profit (and margin), adjusted net sales, EBITDA and adjusted EBITDA.

Adjusted EPS is defined as diluted EPS excluding actions and the tax effect on actions. Adjusted net income is defined as net income excluding actions and the tax effect on actions. Adjusted operating profit is defined as operating profit excluding actions.

Adjusted SG&A is defined as selling, general and administrative expenses excluding actions. Adjusted gross profit is defined as gross profit excluding actions. Adjusted net sales are defined as net sales excluding actions.

Charges for actions taken in 2019 primarily represented supply chain network changes, program exit costs, and overhead reduction as well as completion of outstanding acquisition integration. Charges taken in 2020 include supply chain restructuring actions, program exit costs and COVID-19 related non-cash charges. Acquisition and integration costs include legal fees, consulting fees, bank fees, severance costs, certain purchase accounting items, facility closures, inventory write-offs, information technology integration costs and similar charges. While these costs are not operational in nature and are not expected to continue for any singular transaction on an ongoing basis, similar types of costs, expenses and charges have occurred in prior periods and may recur in future periods depending upon acquisition activity.

Hanes has chosen to present these non‐GAAP measures to investors to enable additional analyses of past, present and future operating performance and as a supplemental means of evaluating operations absent the effect of acquisitions and other actions. Hanes believes these non-GAAP measures provide management and investors with valuable supplemental information for analyzing the operating performance of the company’s ongoing business during each period presented without giving effect to costs associated with the execution and integration of any of the aforementioned actions taken.

The company has also chosen to present EBITDA and adjusted EBITDA to investors because it considers these measures to be an important supplemental means of evaluating operating performance. EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA excluding actions and stock compensation expense. Hanes believes that EBITDA and adjusted EBITDA are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the industry, and management uses EBITDA and adjusted EBITDA for planning purposes in connection with setting its capital allocation strategy. EBITDA and adjusted EBITDA should not, however, be considered as measures of discretionary cash available to invest in the growth of the business.

In addition, with respect to 2020 financial performance, Hanes has chosen to present certain year-over-year comparisons with respect to the company’s rebased 2019 business, which excludes the exited C9 Champion program at mass retail and DKNY license. Hanes believes this information is useful to management and investors to facilitate a more meaningful comparison of the results of the company’s ongoing business between 2019 and 2020. The company has provided rebased 2019 quarterly income statements in Supplemental Table B dated Feb. 7, 2020, which is available online at www.hanes.com/investors.

Hanes is a global company that reports financial information in U.S. dollars in accordance with GAAP. As a supplement to the company’s reported operating results, Hanes also presents constant-currency financial information, which is a non-GAAP financial measure that excludes the impact of translating foreign currencies into U.S. dollars. The company uses constant-currency information to provide a framework to assess how the business performed excluding the effects of changes in the rates used to calculate foreign currency translation.

To calculate foreign currency translation on a constant currency basis, operating results for the current-year period for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the average exchange rates in effect during the comparable period of the prior year (rather than the actual exchange rates in effect during the current year period).

Hanes believes constant-currency information is useful to management and investors to facilitate comparison of operating results and better identify trends in the company’s businesses.

Non‐GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as an alternative to, or substitute for, financial results prepared in accordance with GAAP. Further, the non-GAAP measures presented may be different from non-GAAP measures with similar or identical names presented by other companies.

Reconciliations of these non-GAAP measures to the most directly comparable GAAP financial measures are presented in the supplemental financial information included with this news release.

Webcast Conference Call

Hanes will host an internet webcast of its second-quarter investor conference call at 8:30 a.m. EDT today, July 30, 2020. The webcast of the call, which will consist of prepared remarks followed by a question-and-answer session, may be accessed at www.Hanes.com/investors. The call is expected to conclude by 9:30 a.m.

An archived replay of the conference call webcast will be available in the investors section of the Hanes corporate website. A telephone playback will be available from approximately noon EDT today through midnight EDT Aug. 6, 2020. The replay will be available by calling toll-free (855) 859-2056 or by toll call at (404) 537-3406. The replay ID is 5907699.

Cautionary Statement Concerning Forward-Looking Statements

This press release contains certain forward-looking statements, as defined under U.S. federal securities laws, with respect to our long-term goals and trends associated with our business, as well as guidance as to future performance. In particular, among others, statements regarding the potential impact of the COVID-19 outbreak on our business and financial performance; guidance and predictions regarding expected operating results, including related to our new business line for cotton face masks and other personal protection garments; our belief that we have sufficient liquidity to fund our ongoing business operations; and statements made in 2020 Financial Guidance section of this news release, are forward-looking statements. These forward-looking statements are based on our current intent, beliefs, plans and expectations. Readers are cautioned not to place any undue reliance on any forward-looking statements. Forward-looking statements necessarily involve risks and uncertainties, many of which are outside of our control, that could cause actual results to differ materially from such statements and from our historical results and experience. These risks and uncertainties include such things as: the potential effects of the COVID-19 outbreak, including on consumer spending, global supply chains and the financial markets; the highly competitive and evolving nature of the industry in which we compete; the rapidly changing retail environment; any inadequacy, interruption, integration failure or security failure with respect to our information technology; the impact of significant fluctuations and volatility in various input costs, such as cotton and oil-related materials, utilities, freight and wages; our ability to attract and retain a senior management team with the core competencies needed to support growth in global markets; our ability to properly manage strategic projects in order to achieve the desired results; significant fluctuations in foreign exchange rates; our reliance on a relatively small number of customers for a significant portion of our sales; legal, regulatory, political and economic risks related to our international operations; our ability to effectively manage our complex multinational tax structure; the existence of a material weakness in our internal control over financial reporting; and other risks identified from time to time in our most recent Securities and Exchange Commission reports, including our annual report on Form 10-K and quarterly reports on Form 10-Q. Since it is not possible to predict or identify all of the risks, uncertainties and other factors that may affect future results, the above list should not be considered a complete list. Any forward-looking statement speaks only as of the date on which such statement is made, and HanesBrands undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, other than as required by law.

HanesBrands

HanesBrands, based in Winston-Salem, N.C., is a socially responsible leading marketer of everyday basic innerwear and activewear apparel in the Americas, Europe, Australia and Asia-Pacific. The company sells its products under some of the world’s strongest apparel brands, including Hanes, Champion, Bonds, DIM, Maidenform, Bali, Playtex, Lovable, Bras N Things, Nur Die/Nur Der, Alternative, L’eggs, JMS/Just My Size, Wonderbra, Berlei, and Gear for Sports. The company sells T-shirts, bras, panties, shapewear, underwear, socks, hosiery, and activewear produced in the company’s low-cost global supply chain. A Fortune 500 company and member of the S&P 500 stock index (NYSE: HBI), Hanes has approximately 63,000 employees in more than 40 countries. For more information, visit the company’s corporate website at www.Hanes.com/corporate and newsroom at https://newsroom.hanesbrands.com/. Connect with the company via social media: Twitter (@hanesbrands), Facebook (www.facebook.com/hanesbrandsinc), Instagram (@hanesbrands_careers), and LinkedIn (@Hanesbrandsinc).

 

TABLE 1

 

HANESBRANDS INC.

Condensed Consolidated Statements of Income and Supplemental Financial Information

(in thousands, except per-share amounts)

(Unaudited)

 

 

Quarters Ended

 

 

 

Six Months Ended

 

 

 

June 27,
2020

 

June 29,
2019

 

% Change

 

June 27,
2020

 

June 29,
2019

 

% Change

Net sales

$

1,738,779

 

 

$

1,760,927

 

 

(1.3

)%

 

$

3,055,241

 

 

$

3,348,951

 

 

(8.8

)%

Cost of sales

1,105,767

 

 

1,085,404

 

 

 

 

1,948,497

 

 

2,053,397

 

 

 

Gross profit

633,012

 

 

675,523

 

 

(6.3

)%

 

1,106,744

 

 

1,295,554

 

 

(14.6

)%

As a % of net sales

36.4

%

 

38.4

%

 

 

 

36.2

%

 

38.7

%

 

 

Selling, general and administrative expenses

391,476

 

 

445,923

 

 

 

 

831,078

 

 

916,310

 

 

 

As a % of net sales

22.5

%

 

25.3

%

 

 

 

27.2

%

 

27.4

%

 

 

Operating profit

241,536

 

 

229,600

 

 

5.2

%

 

275,666

 

 

379,244

 

 

(27.3

)%

As a % of net sales

13.9

%

 

13.0

%

 

 

 

9.0

%

 

11.3

%

 

 

Other expenses

5,050

 

 

8,249

 

 

 

 

11,540

 

 

15,700

 

 

 

Interest expense, net

41,659

 

 

46,522

 

 

 

 

78,508

 

 

94,581

 

 

 

Income before income tax expense

194,827

 

 

174,829

 

 

 

 

185,618

 

 

268,963

 

 

 

Income tax expense

33,646

 

 

25,274

 

 

 

 

32,311

 

 

38,320

 

 

 

Net income

$

161,181

 

 

$

149,555

 

 

7.8

%

 

$

153,307

 

 

$

230,643

 

 

(33.5

)%

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.46

 

 

$

0.41

 

 

 

 

$

0.43

 

 

$

0.63

 

 

 

Diluted

$

0.46

 

 

$

0.41

 

 

 

 

$

0.43

 

 

$

0.63

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

Basic

350,538

 

 

364,637

 

 

 

 

354,778

 

 

364,603

 

 

 

Diluted

350,829

 

 

365,537

 

 

 

 

355,133

 

 

365,418

 

 

 

 

The following tables present a reconciliation of reported results on a constant currency basis for the quarter and six months ended June 27, 2020 and a comparison to prior year:

 

Quarter Ended June 27, 2020

 

 

 

 

 

 

 

As Reported

 

Impact from
Foreign
Currency1

 

Constant
Currency

 

Quarter
Ended
June 29, 2019

 

% Change,
As Reported

 

% Change,
Constant
Currency

As reported under GAAP:

 

 

 

 

 

 

 

 

 

 

 

Net sales

$

1,738,779

 

 

$

(13,653

)

 

$

1,752,432

 

 

$

1,760,927

 

 

(1.3

)%

 

(0.5

)%

Gross profit

633,012

 

 

(6,298

)

 

639,310

 

 

675,523

 

 

(6.3

)

 

(5.4

)

Operating profit

241,536

 

 

111

 

 

241,425

 

 

229,600

 

 

5.2

 

 

5.2

 

Diluted earnings per share

$

0.46

 

 

$

0.00

 

 

$

0.46

 

 

$

0.41

 

 

12.2

%

 

12.2

%

 

 

 

 

 

 

 

 

 

 

 

 

As adjusted:2

 

 

 

 

 

 

 

 

 

 

 

Net sales

$

1,738,779

 

 

$

(13,653

)

 

$

1,752,432

 

 

$

1,642,217

 

 

5.9

%

 

6.7

%

Gross profit

659,546

 

 

(6,298

)

 

665,844

 

 

652,952

 

 

1.0

 

 

2.0

 

Operating profit

304,832

 

 

111

 

 

304,721

 

 

216,752

 

 

40.6

 

 

40.6

 

Diluted earnings per share

$

0.60

 

 

$

0.00

 

 

$

0.60

 

 

$

0.38

 

 

57.9

%

 

57.9

%

 

 

Six Months Ended June 27, 2020

 

 

 

 

 

 

 

As Reported

 

Impact from
Foreign
Currency1

 

Constant
Currency

 

Six Months
Ended

June 29, 2019

 

% Change,
As Reported

 

% Change,
Constant
Currency

As reported under GAAP:

 

 

 

 

 

 

 

 

 

 

 

Net sales

$

3,055,241

 

 

$

(33,854

)

 

$

3,089,095

 

 

$

3,348,951

 

 

(8.8

)%

 

(7.8

)%

Gross profit

1,106,744

 

 

(16,560

)

 

1,123,304

 

 

1,295,554

 

 

(14.6

)

 

(13.3

)

Operating profit

275,666

 

 

(774

)

 

276,440

 

 

379,244

 

 

(27.3

)

 

(27.1

)

Diluted earnings per share

$

0.43

 

 

$

0.00

 

 

$

0.43

 

 

$

0.63

 

 

(31.7

)%

 

(31.7

)%

 

 

 

 

 

 

 

 

 

 

 

 

As adjusted:2

 

 

 

 

 

 

 

 

 

 

 

Net sales

$

3,055,241

 

 

$

(33,854

)

 

$

3,089,095

 

 

$

3,136,137

 

 

(2.6

)%

 

(1.5

)%

Gross profit

1,155,091

 

 

(16,560

)

 

1,171,651

 

 

1,260,787

 

 

(8.4

)

 

(7.1

)

Operating profit

368,161

 

 

(774

)

 

368,935

 

 

366,846

 

 

0.4

 

 

0.6

 

Diluted earnings per share

$

0.65

 

 

$

0.00

 

 

$

0.65

 

 

$

0.60

 

 

8.3

%

 

8.3

%

1

Effect of the change in foreign currency exchange rates year-over-year. Calculated by applying prior period exchange rates to the current year financial results. 

2

Results for the quarters and six months ended June 27, 2020 and June 29, 2019 reflect adjustments for restructuring and other action-related charges. Results for the quarter and six months ended June 29, 2019 also reflect adjustments for the exited C9 Champion program at Target and DKNY Intimates license. See “Reconciliation of Select GAAP Measures to Non-GAAP Measures” in Table 5. 

 
 

TABLE 2

 

HANESBRANDS INC.

Supplemental Financial Information

(in thousands, except per-share amounts)

(Unaudited)

 

 

Quarters Ended

 

 

 

Six Months Ended

 

 

 

June 27,
2020

 

June 29, 2019
Rebased1

 

% Change

 

June 27,
2020

 

June 29, 2019
Rebased1

 

% Change

Segment net sales:

 

 

 

 

 

 

 

 

 

 

 

Innerwear

$

1,094,814

 

 

$

657,477

 

 

66.5

%

 

$

1,517,216

 

 

$

1,123,891

 

 

35.0

%

Activewear

168,379

 

 

350,694

 

 

(52.0

)

 

456,379

 

 

671,461

 

 

(32.0

)

International

456,875

 

 

568,863

 

 

(19.7

)

 

1,012,776

 

 

1,215,043

 

 

(16.6

)

Other

18,711

 

 

65,183

 

 

(71.3

)

 

68,870

 

 

125,742

 

 

(45.2

)

Total net sales

$

1,738,779

 

 

$

1,642,217

 

 

5.9

%

 

$

3,055,241

 

 

$

3,136,137

 

 

(2.6

)%

 

 

 

 

 

 

 

 

 

 

 

 

Segment operating profit:

 

 

 

 

 

 

 

 

 

 

 

Innerwear

$

304,524

 

 

$

146,997

 

 

107.2

%

 

$

386,075

 

 

$

250,123

 

 

54.4

%

Activewear

(5,751

)

 

45,855

 

 

(112.5

)

 

2,357

 

 

70,025

 

 

(96.6

)

International

79,124

 

 

81,078

 

 

(2.4

)

 

131,142

 

 

180,851

 

 

(27.5

)

Other

(12,270

)

 

6,032

 

 

(303.4

)

 

(18,395

)

 

6,786

 

 

(371.1

)

General corporate expenses/other

(60,795

)

 

(63,210

)

 

(3.8

)

 

(133,018

)

 

(140,939

)

 

(5.6

)

Total operating profit before restructuring and other action-related charges

304,832

 

 

216,752

 

 

40.6

 

 

368,161

 

 

366,846

 

 

0.4

 

Restructuring and other action-related charges

(63,296

)

 

(12,609

)

 

402.0

 

 

(92,495

)

 

(33,982

)

 

172.2

 

Total operating profit

$

241,536

 

 

$

204,143

 

 

18.3

%

 

$

275,666

 

 

$

332,864

 

 

(17.2

)%

 

1

Results for the quarter and six months ended June 29, 2019 reflect adjustments for the exited C9 Champion program at Target and DKNY Intimates license. See “Reconciliation of Select GAAP Measures to Non-GAAP Measures” in Table 5.

The following table presents a reconciliation of reported net sales adjusted for personal protective equipment (“PPE”) sales for the quarter and six months ended June 27, 2020 and a comparison to prior year.

 

 

Quarter Ended June 27, 2020 

 

As Reported

 

 

% Change1

 

PPE

 

Adjusted for
PPE

 

 

% Change1

Segment net sales:

 

 

 

 

 

 

 

 

 

Innerwear

$

1,094,814

 

 

66.5

%

 

$

613,516

 

 

$

481,298

 

 

(26.8

)%

Activewear

168,379

 

 

(52.0

)

 

 

 

168,379

 

 

(52.0

)

International

456,875

 

 

(19.7

)

 

138,707

 

 

318,168

 

 

(44.1

)

Other

18,711

 

 

(71.3

)

 

 

 

18,711

 

 

(71.3

)

Net sales

$

1,738,779

 

 

5.9

%

 

$

752,223

 

 

$

986,556

 

 

(39.9

)%

 

 

Six Months Ended June 27, 2020 

 

As Reported

 

 

% Change1

 

PPE

 

Adjusted for
PPE

 

 

% Change1

Segment net sales:

 

 

 

 

 

 

 

 

 

Innerwear

$

1,517,216

 

 

35.0

%

 

$

613,516

 

 

$

903,700

 

 

(19.6

)%

Activewear

456,379

 

 

(32.0

)

 

 

 

456,379

 

 

(32.0

)

International

1,012,776

 

 

(16.6

)

 

138,707

 

 

874,069

 

 

(28.1

)

Other

68,870

 

 

(45.2

)

 

 

 

68,870

 

 

(45.2

)

Net sales

$

3,055,241

 

 

(2.6

)%

 

$

752,223

 

 

$

2,303,018

 

 

(26.6

)%

 

1

The comparison to the quarter and six months ended June 29, 2019 reflects adjustments for the exited C9 Champion program at Target and DKNY Intimates license. See “Reconciliation of Select GAAP Measures to Non-GAAP Measures” in Table 5.

Including the unfavorable foreign currency impact of $0.7 million, global Champion sales outside the mass channel decreased approximately 46% in the second quarter of 2020 compared to the second quarter of 2019. On a constant currency basis, the global Champion sales decrease remained the same at approximately 46%.

 
 

TABLE 3

 

HANESBRANDS INC.

Condensed Consolidated Balance Sheets

(in thousands)

(Unaudited)

 

 

June 27,
2020

 

December 28,
2019

Assets

 

 

 

Cash and cash equivalents

$

683,114

 

 

$

328,876

 

Trade accounts receivable, net

1,196,826

 

 

815,210

 

Inventories

1,958,443

 

 

1,905,845

 

Other current assets

193,422

 

 

174,634

 

Total current assets

4,031,805

 

 

3,224,565

 

 

 

 

 

Property, net

565,849

 

 

587,896

 

Right-of-use assets

479,677

 

 

487,787

 

Trademarks and other identifiable intangibles, net

1,478,721

 

 

1,520,800

 

Goodwill

1,233,184

 

 

1,235,711

 

Deferred tax assets

200,047

 

 

203,331

 

Other noncurrent assets

123,677

 

 

93,896

 

Total assets

$

8,112,960

 

 

$

7,353,986

 

 

 

 

 

Liabilities

 

 

 

Accounts payable

$

1,152,273

 

 

$

959,006

 

Accrued liabilities

568,228

 

 

531,184

 

Lease liabilities

160,432

 

 

166,091

 

Notes payable

8,803

 

 

4,244

 

Accounts Receivable Securitization Facility

 

 

 

Current portion of long-term debt

112,512

 

 

110,914

 

Total current liabilities

2,002,248

 

 

1,771,439

 

 

 

 

 

Long-term debt

3,985,631

 

 

3,256,870

 

Lease liabilities - noncurrent

362,570

 

 

358,281

 

Pension and postretirement benefits

374,052

 

 

403,458

 

Other noncurrent liabilities

309,139

 

 

327,343

 

Total liabilities

7,033,640

 

 

6,117,391

 

 

 

 

 

Stockholders’ equity

 

 

 

Preferred stock

 

 

 

Common stock

3,481

 

 

3,624

 

Additional paid-in capital

302,522

 

 

304,395

 

Retained earnings

1,404,326

 

 

1,546,224

 

Accumulated other comprehensive loss

(631,009

)

 

(617,648

)

Total stockholders’ equity

1,079,320

 

 

1,236,595

 

Total liabilities and stockholders’ equity

$

8,112,960

 

 

$

7,353,986

 

 
 

TABLE 4

 

HANESBRANDS INC.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

 

 

Quarters Ended

 

Six Months Ended

 

June 27,
2020

 

June 29,
2019

 

June 27,
2020

 

June 29,
2019

Operating Activities:

 

 

 

 

 

 

 

Net income

$

161,181

 

 

$

149,555

 

 

$

153,307

 

 

$

230,643

 

Adjustments to reconcile net income to net cash from operating activities:

 

 

 

 

 

 

 

Depreciation

22,618

 

 

24,035

 

 

45,399

 

 

46,889

 

Amortization of acquisition intangibles

6,086

 

 

6,247

 

 

12,199

 

 

12,537

 

Other amortization

2,630

 

 

1,973

 

 

5,107

 

 

5,063

 

Impairment of intangible assets

20,319

 

 

 

 

20,319

 

 

 

Amortization of debt issuance costs

2,996

 

 

2,318

 

 

5,119

 

 

4,758

 

Stock compensation expense

4,466

 

 

2,069

 

 

9,189

 

 

7,247

 

Deferred taxes

(1,740

)

 

1,272

 

 

(2,201

)

 

(2,582

)

Other

18,779

 

 

1,228

 

 

9,259

 

 

5,475

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

Accounts receivable

(465,828

)

 

(75,167

)

 

(392,134

)

 

(137,445

)

Inventories

25,376

 

 

12,893

 

 

(61,409

)

 

(165,512

)

Other assets

(58,360

)

 

3,793

 

 

(31,570

)

 

(28,579

)

Accounts payable

223,943

 

 

25,912

 

 

210,338

 

 

7,699

 

Accrued pension and postretirement benefits

2,163

 

 

3,657

 

 

(19,318

)

 

(18,321

)

Accrued liabilities and other

100,794

 

 

(22,857

)

 

18,603

 

 

(25,235

)

Net cash from operating activities

65,423

 

 

136,928

 

 

(17,793

)

 

(57,363

)

 

 

 

 

 

 

 

 

Investing Activities:

 

 

 

 

 

 

 

Capital expenditures

(20,753

)

 

(33,016

)

 

(46,512

)

 

(58,285

)

Proceeds from sales of assets

 

 

382

 

 

66

 

 

518

 

Other

4,607

 

 

 

 

5,823

 

 

 

Net cash from investing activities

(16,146

)

 

(32,634

)

 

(40,623

)

 

(57,767

)

 

 

 

 

 

 

 

 

Financing Activities:

 

 

 

 

 

 

 

Borrowings on notes payable

54,357

 

 

79,818

 

 

116,669

 

 

162,592

 

Repayments on notes payable

(48,021

)

 

(80,944

)

 

(112,373

)

 

(163,703

)

Borrowings on Accounts Receivable Securitization Facility

 

 

16,870

 

 

227,061

 

 

123,812

 

Repayments on Accounts Receivable Securitization Facility

(152,152

)

 

(26,560

)

 

(227,061

)

 

(95,110

)

Borrowings on Revolving Loan Facilities

 

 

830,000

 

 

1,638,000

 

 

1,602,500

 

Repayments on Revolving Loan Facilities

(950,000

)

 

(742,000

)

 

(1,638,000

)

 

(1,422,500

)

Borrowings on Senior Notes

700,000

 

 

 

 

700,000

 

 

 

Repayments on Term Loan Facilities

 

 

(130,998

)

 

 

 

(141,623

)

Borrowings on International Debt

 

 

 

 

31,222

 

 

7,141

 

Repayments on International Debt

 

 

(27,941

)

 

 

 

(27,941

)

Share repurchases

 

 

 

 

(200,269

)

 

 

Cash dividends paid

(52,213

)

 

(54,228

)

 

(105,896

)

 

(108,449

)

Payments of debt issuance costs

(14,602

)

 

(106

)

 

(14,834

)

 

(768

)

Taxes paid related to net shares settlement of equity awards

(18

)

 

(251

)

 

(80

)

 

(1,157

)

Other

453

 

 

412

 

 

879

 

 

985

 

Net cash from financing activities

(462,196

)

 

(135,928

)

 

415,318

 

 

(64,221

)

Effect of changes in foreign exchange rates on cash

12,392

 

 

2,178

 

 

(2,669

)

 

4,282

 

Change in cash, cash equivalents and restricted cash

(400,527

)

 

(29,456

)

 

354,233

 

 

(175,069

)

Cash, cash equivalents and restricted cash at beginning of period

1,084,683

 

 

310,119

 

 

329,923

 

 

455,732

 

Cash, cash equivalents and restricted cash at end of period

684,156

 

 

280,663

 

 

684,156

 

 

280,663

 

Less restricted cash at end of period

1,042

 

 

22,722

 

 

1,042

 

 

22,722

 

Cash and cash equivalents per balance sheet at end of period

$

683,114

 

 

$

257,941

 

 

$

683,114

 

 

$

257,941

 

 

TABLE 5

 

HANESBRANDS INC.

Supplemental Financial Information

Reconciliation of Select GAAP Measures to Non-GAAP Measures

(in thousands, except per-share amounts)

(Unaudited)

 

 

Quarters Ended

 

Six Months Ended

 

June 27,
2020

 

June 29,
2019

 

June 27,
2020

 

June 29,
2019

Net sales, as reported under GAAP

$

1,738,779

 

 

$

1,760,927

 

 

$

3,055,241

 

 

$

3,348,951

 

Net sales from exited programs

 

 

(118,710

)

 

 

 

(212,814

)

Net sales, rebased

$

1,738,779

 

 

$

1,642,217

 

 

$

3,055,241

 

 

$

3,136,137

 

 

 

 

 

 

 

 

 

Gross profit, as reported under GAAP

$

633,012

 

 

$

675,523

 

 

$

1,106,744

 

 

$

1,295,554

 

Restructuring and other action-related charges

26,534

 

 

12,598

 

 

48,347

 

 

30,290

 

Gross profit on exited programs

 

 

(35,169

)

 

 

 

(65,057

)

Adjusted gross profit, rebased

$

659,546

 

 

$

652,952

 

 

$

1,155,091

 

 

$

1,260,787

 

As a % of net sales, rebased

37.9

%

 

39.8

%

 

37.8

%

 

40.2

%

 

 

 

 

 

 

 

 

Selling, general and administrative expenses, as reported under GAAP

$

391,476

 

 

$

445,923

 

 

$

831,078

 

 

$

916,310

 

Restructuring and other action-related charges

(36,762

)

 

(11

)

 

(44,148

)

 

(3,692

)

Selling, general and administrative expenses related to exited programs

 

 

(9,712

)

 

 

 

(18,677

)

Adjusted selling, general and administrative expenses, rebased

$

354,714

 

 

$

436,200

 

 

$

786,930

 

 

$

893,941

 

As a % of net sales, rebased

20.4

%

 

26.6

%

 

25.8

%

 

28.5

%

 

 

 

 

 

 

 

 

Operating profit, as reported under GAAP

$

241,536

 

 

$

229,600

 

 

$

275,666

 

 

$

379,244

 

Restructuring and other action-related charges included in gross profit

26,534

 

 

12,598

 

 

48,347

 

 

30,290

 

Restructuring and other action-related charges included in SG&A

36,762

 

 

11

 

 

44,148

 

 

3,692

 

Gross profit on exited programs

 

 

(35,169

)

 

 

 

(65,057

)

Selling, general and administrative expenses related to exited programs

 

 

9,712

 

 

 

 

18,677

 

Adjusted operating profit, rebased

$

304,832

 

 

$

216,752

 

 

$

368,161

 

 

$

366,846

 

As a % of net sales, rebased

17.5

%

 

13.2

%

 

12.1

%

 

11.7

%

 

 

 

 

 

 

 

 

Net income, as reported under GAAP

$

161,181

 

 

$

149,555

 

 

$

153,307

 

 

$

230,643

 

Restructuring and other action-related charges included in gross profit

26,534

 

 

12,598

 

 

48,347

 

 

30,290

 

Restructuring and other action-related charges included in SG&A

36,762

 

 

11

 

 

44,148

 

 

3,692

 

Gross profit on exited programs

 

 

(35,169

)

 

 

 

(65,057

)

Selling, general and administrative expenses related to exited programs

 

 

9,712

 

 

 

 

18,677

 

Tax effect on actions

(12,415

)

 

1,812

 

 

(16,649

)

 

1,749

 

Adjusted net income, rebased

$

212,062

 

 

$

138,519

 

 

$

229,153

 

 

$

219,994

 

 

 

 

 

 

 

 

 

Diluted earnings per share, as reported under GAAP

$

0.46

 

 

$

0.41

 

 

$

0.43

 

 

$

0.63

 

Restructuring and other action-related charges

0.15

 

 

0.03

 

 

0.21

 

 

0.08

 

Exited programs

 

 

(0.06

)

 

 

 

(0.11

)

Adjusted diluted earnings per share, rebased

$

0.60

 

 

$

0.38

 

 

$

0.65

 

 

$

0.60

 

 
 

 

Quarter Ended June 29, 2019

 

As Reported

 

Less: Exited
Programs

 

Adjusted for
Exited
Programs

 

Less:
Restructuring
and other
action-related
charges
 

 

Rebased

Segment net sales:

 

 

 

 

 

 

 

 

 

Innerwear

$

678,604

 

 

$

21,127

 

 

$

657,477

 

 

$

 

 

$

657,477

 

Activewear

448,277

 

 

97,583

 

 

350,694

 

 

 

 

350,694

 

International

568,863

 

 

 

 

568,863

 

 

 

 

568,863

 

Other

65,183

 

 

 

 

65,183

 

 

 

 

65,183

 

Total net sales

$

1,760,927

 

 

$

118,710

 

 

$

1,642,217

 

 

$

 

 

$

1,642,217

 

 

 

 

 

 

 

 

 

 

 

Segment operating profit:

 

 

 

 

 

 

 

 

 

Innerwear

$

149,530

 

 

$

2,533

 

 

$

146,997

 

 

$

 

 

$

146,997

 

Activewear

68,779

 

 

22,924

 

 

45,855

 

 

 

 

45,855

 

International

81,078

 

 

 

 

81,078

 

 

 

 

81,078

 

Other

6,032

 

 

 

 

6,032

 

 

 

 

6,032

 

General corporate expenses/other

(63,210

)

 

 

 

(63,210

)

 

 

 

(63,210

)

Restructuring and other action-related charges

(12,609

)

 

 

 

(12,609

)

 

(12,609

)

 

 

Total operating profit

$

229,600

 

 

$

25,457

 

 

$

204,143

 

 

$

(12,609

)

 

$

216,752

 

 
 

 

Six Months Ended June 29, 2019

 

As Reported

 

Less: Exited
Programs

 

Adjusted for
Exited Programs

 

Less:
Restructuring
and other
action-related
charges
 

 

Rebased

Segment net sales:

 

 

 

 

 

 

 

 

 

Innerwear

$

1,154,549

 

 

$

30,658

 

 

$

1,123,891

 

 

$

 

 

$

1,123,891

 

Activewear

853,617

 

 

182,156

 

 

671,461

 

 

 

 

671,461

 

International

1,215,043

 

 

 

 

1,215,043

 

 

 

 

1,215,043

 

Other

125,742

 

 

 

 

125,742

 

 

 

 

125,742

 

Total net sales

$

3,348,951

 

 

$

212,814

 

 

$

3,136,137

 

 

$

 

 

$

3,136,137

 

 

 

 

 

 

 

 

 

 

 

Segment operating profit:

 

 

 

 

 

 

 

 

 

Innerwear

$

254,156

 

 

$

4,033

 

 

$

250,123

 

 

$

 

 

$

250,123

 

Activewear

112,372

 

 

42,347

 

 

70,025

 

 

 

 

70,025

 

International

180,851

 

 

 

 

180,851

 

 

 

 

180,851

 

Other

6,786

 

 

 

 

6,786

 

 

 

 

6,786

 

General corporate expenses/other

(140,939

)

 

 

 

(140,939

)

 

 

 

(140,939

)

Restructuring and other action-related charges

(33,982

)

 

 

 

(33,982

)

 

(33,982

)

 

 

Total operating profit

$

379,244

 

 

$

46,380

 

 

$

332,864

 

 

$

(33,982

)

 

$

366,846

 

 
 

 

Quarters Ended

 

Six Months Ended

 

June 27,
2020

 

June 29,
2019

 

June 27,
2020

 

June 29,
2019

Restructuring and other action-related charges by category:

 

 

 

 

 

 

 

Supply chain actions - 2019

$

1,896

 

 

$

12,598

 

 

$

5,698

 

 

$

30,290

 

Supply chain actions - 2020

3,241

 

 

 

 

13,504

 

 

 

Program exit costs

1,285

 

 

 

 

9,500

 

 

 

Other restructuring costs

4,695

 

 

11

 

 

11,614

 

 

3,692

 

COVID-19 related charges:

 

 

 

 

 

 

 

Bad debt

11,375

 

 

 

 

11,375

 

 

 

Inventory

20,485

 

 

 

 

20,485

 

 

 

Intangible assets

20,319

 

 

 

 

20,319

 

 

 

Tax effect on actions

(12,415

)

 

(1,778

)

 

(16,649

)

 

(4,791

)

Total restructuring and other action-related charges

$

50,881

 

 

$

10,831

 

 

$

75,846

 

 

$

29,191

 

 
 

 

Last Twelve Months

 

June 27,
2020

 

June 29,
2019

EBITDA1:

 

 

 

Net income

$

523,384

 

 

$

551,480

 

Interest expense, net

162,506

 

 

195,063

 

Income tax expense

72,998

 

 

103,117

 

Depreciation and amortization

129,183

 

 

130,792

 

Total EBITDA

888,071

 

 

980,452

 

Total restructuring and other action-related charges (excluding tax effect on actions)

121,999

 

 

69,398

 

Stock compensation expense

11,219

 

 

25,630

 

Total EBITDA, as adjusted

$

1,021,289

 

 

$

1,075,480

 

 

 

 

 

Net debt:

 

 

 

Debt (current and long-term debt and Accounts Receivable Securitization Facility)

$

4,098,143

 

 

$

4,017,566

 

Notes payable

8,803

 

 

4,695

 

(Less) Cash and cash equivalents

(683,114

)

 

(257,941

)

Net debt

$

3,423,832

 

 

$

3,764,320

 

 

 

 

 

Net debt/EBITDA, as adjusted

3.4

 

 

3.5

 

 

1

Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP financial measure.

 

Quarters Ended

 

Six Months Ended

 

June 27,
2020

 

June 29,
2019

 

June 27,
2020

 

June 29,
2019

Free cash flow:

 

 

 

 

 

 

 

Net cash from operating activities

$

65,423

 

 

$

136,928

 

 

$

(17,793

)

 

$

(57,363

)

Capital expenditures

(20,753

)

 

(33,016

)

 

(46,512

)

 

(58,285

)

Free cash flow

$

44,670

 

 

$

103,912

 

 

$

(64,305

)

 

$

(115,648

)

 

Hanesbrands Aktie jetzt ab 0€ handeln - auf Smartbroker.de



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