Hanebrands Inc. reported third-quarter results that met Wall Street’s consensus estimates.
The company said net income for the three months ended Oct. 1 rose 7.2 percent to $173.9 million, or 46 cents a diluted share, from $162.2 million, or 40 cents, a year ago. Excluding pretax charges related to acquisitions and integration, adjusted EPS was 56 cents. Total revenues increased 10.7 percent to $1.76 billion from $1.59 billion. Wall Street was expecting 56 cents on revenues of $1.76 billion.
Gerald W. Evans Jr., in his first earnings report as chief executive officer, said, “Our sales initiatives have reaccelerated organic growth in several core categories, including 2 percent growth in the quarter for the innerwear segment. Our acquisitions, both past and present, are performing extremely well. Our inventory is declining, and cash flow from operations is already $300 million ahead of last year. Our business is unfolding as expected this year and we remain confident in our ability to deliver on our full-year guidance.”
For fiscal year 2016, the company expects earnings per share from continuing operations at $1.45 to $1.49, on sales projections of between $6.15 billion to $6.18 billion. That’s slightly below prior guidance of EPS between $1.44 and $1.54 and revenue expectations of between $6.15 billion and $6.25 billion.
The company said the activewear and direct-to-consumer segments are challenged, with sales at the former falling 2 percent. The decline was due primarily to the bankruptcies of several sporting goods retailers. In direct-to-consumer, which is undergoing a transition to a growth-oriented brand strategy, the decline in sales was 11 percent, while the decrease in operating profit was 52 percent.
Shares of Hanesbrands closed down 0.4 percent to $23.80. The company reported earnings after the markets closed.