Steeper prices helped Hanesbrands Inc. overcome increased cotton costs in the third quarter, turning an unexpectedly small sales gain into much better-than-projected profits — a handy trick that other apparel producers no doubt will try to replicate.
Net income increased 48.1 percent to $90.8 million, or 91 cents a diluted share, from $61.3 million, or 63 cents, a year earlier. Earnings came in 11 cents ahead of Wall Street expectations.
Sales for the three months ended Oct. 1 inched up 4.8 percent to $1.23 billion from $1.17 billion, where analysts expected the company to post nearly another $130 million in top-line growth.
The company’s gross margins expanded to 34.6 percent of sales from 31 percent a year earlier.
“Brands are more important than ever, and our price increases for cotton products are helping us mitigate the margin pressure from cotton and other cost inflation,” said William Nictakis, co-chief operating officer. “In addition to price increases in February and June, we instituted another price increase in late September for cotton-based products, and early point-of-sale performance is good.”
Still, Nictakis expressed some caution about the consumer and said the company was working on addressing weakness in its intimate apparel business, which posted sales declines given slow August sales and weaker spending trends from women over 35.
But sales gains in socks and men’s underwear — the categories that saw the biggest price increases — offset the declines in women’s intimates and pushed operating profits at the firm’s innerwear division up 43.6 percent to $79.4 million on a 0.5 percent rise in sales to $515.3 million.
The company narrowed its 2011 earnings guidance and is now looking for profits of $2.75 to $2.85 a share — allowing for a little upside to analyst estimates calling for income of $2.82.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast