HanesBrands Inc. (HBI) has reported a 31.85 percent jump in profit for the quarter ended Dec. 31, 2016. The company has earned $157.11 million, or $0.41 a share in the quarter, compared with $119.16 million, or $0.30 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $201.17 million, or $0.53 a share compared with $174.68 million or $0.44 a share, a year ago. Revenue during the quarter grew 11.76 percent to $1,575.31 million from $1,409.56 million in the previous year period. Gross margin for the quarter expanded 47 basis points over the previous year period to 38.86 percent. Total expenses were 87.07 percent of quarterly revenues, down from 88.80 percent for the same period last year. This has led to an improvement of 173 basis points in operating margin to 12.93 percent.
Operating income for the quarter was $203.68 million, compared with $157.93 million in the previous year period.
However, the adjusted operating income for the quarter stood at $250.55 million compared to $212 million in the prior year period. At the same time, adjusted operating margin improved 86 basis points in the quarter to 15.90 percent from 15.04 percent in the last year period.
"We had a strong year of sales, profit and cash flow growth with many accomplishments, including the expansion of our X-Temp product lineup, the successful launch of our Hanes FreshIQ underwear innovation, acquisition integration, and new acquisitions in Europe and Australia," said Hanes Chief Executive Officer Gerald W. Evans Jr. "Our business model allowed us to deliver benefits to shareholders, even though our record-high financial results fell short of our expectations as a result of unanticipated fourth-quarter retail weakness.
For fiscal year 2017, HanesBrands Inc. projects revenue to be in the range of $6,450 million to $6,550 million. The company projects operating income to be in the range of $845 million to $895 million and projects adjusted operating income to be in the range of $935 million to $975 million. It forecasts diluted earnings per share to be in the range of $1.70 to $1.82 and forecasts diluted earnings per share to be in the range of $1.93 to $2.03 on adjusted basis.
For the first-quarter, The company forecasts diluted earnings per share to be in the range of $0.21 to $0.24. On an adjusted basis, the company forecasts diluted earnings per share to be in the range of $0.27 to $0.29.
Operating cash flow improves significantly
HanesBrands Inc. has generated cash of $605.61 million from operating activities during the year, up 166.78 percent or $378.60 million, when compared with the last year. The company has spent $966.64 million cash to meet investing activities during the year as against cash outgo of $276.80 million in the last year.
Cash flow from financing activities was $511.05 million for the year, up 284.30 percent or $378.07 million, when compared with the last year.
Cash and cash equivalents stood at $460.24 million as on Dec. 31, 2016, up 44.20 percent or $141.08 million from $319.17 million on Jan. 02, 2016.
Working capital increases
HanesBrands Inc. has recorded an increase in the working capital over the last year. It stood at $1,695.50 million as at Dec. 31, 2016, up 19.91 percent or $281.54 million from $1,413.96 million on Jan. 02, 2016. Current ratio was at 2.06 as on Dec. 31, 2016, up from 1.94 on Jan. 02, 2016.
Days sales outstanding went up to 24 days for the quarter compared with 22 days for the same period last year.
Days inventory outstanding has decreased to 87 days for the quarter compared with 95 days for the previous year period.
Debt increases substantially
HanesBrands Inc. has witnessed an increase in total debt over the last one year. It stood at $3,697.92 million as on Dec. 31, 2016, up 53.56 percent or $1,289.77 million from $2,408.15 million on Jan. 02, 2016. Total debt was 53.53 percent of total assets as on Dec. 31, 2016, compared with 42.86 percent on Jan. 02, 2016. Debt to equity ratio was at 3.02 as on Dec. 31, 2016, up from 1.89 as on Jan. 02, 2016.
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