Sales gains in nearly every segment and better margins combined to swing Hanesbrands Inc. into the black in the first quarter.
In the three months ended April 3, the Winston-Salem, N.C.-based basics maker posted net income of $36.5 million, or 37 cents a diluted share, versus a year-ago loss of $19.3 million, or 20 cents a share, including $18.7 million in pretax restructuring costs.
Sales in the quarter improved 8.2 percent to $927.8 million from $857.8 million in the comparable period.
The results topped expectations of analysts polled by Yahoo Finance, who had anticipated earnings per share of 23 cents on revenues of $911.1 million, on average.
On an evening conference call, Richard Noll, chairman and chief executive officer, said the company had seen positive sell-through rates since the holidays.
“While consumers are still value-conscious, we are also seeing their willingness to trade up products and channels,” Noll said. “This behavior has been consistent across all our product categories in the U.S. Additionally, domestic retailers seem increasingly optimistic and are raising both inventory and pre-booked order levels.”
The company’s top-line growth was aided by increased sales in all divisions save hosiery, which fell 4.9 percent to $47.9 million. Innerwear sales gained 7.9 percent to $450.8 million, outerwear grew 11.2 percent to $241.8 million and international sales rose 16.9 percent to $102.8 million.
A 520 basis point improvement in gross margin to 35.3 percent of sales contributed to the first-quarter net income gain.
For the whole of fiscal 2010, the company expects to see net sales rise between 6 and 8 percent to between $1.94 billion and $1.98 billion, and to register EPS between $2.15 and $2.27. The consensus estimate among analysts was for EPS of $2.17.
Shares of Hanesbrands closed up 2.5 percent to $29.84 in trading Wednesday, ahead of its earnings announcement.
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