Hanes(US:HBI) ZACKS·2024-08-08 14:56Core Viewpoint - Hanesbrands Inc. (HBI) reported mixed second-quarter 2024 results, with a decline in net sales year over year and a miss on the Zacks Consensus Estimate, while adjusted earnings improved and surpassed expectations. Management has lowered its net sales and earnings outlook for 2024 due to challenges in the consumer and apparel market [1]. Financial Performance - Adjusted earnings from continuing operations were 15 cents per share, exceeding the Zacks Consensus Estimate of 10 cents and up from 2 cents per share in the year-ago quarter [2]. - Net sales from continuing operations fell nearly 4% to $995 million, below the Zacks Consensus Estimate of $1,350.6 million, impacted by a 130 basis points decline from the U.S. Hosiery divestiture and 150 basis points from unfavorable currency rates. On a constant-currency basis, organic net sales decreased nearly 1% [3]. - Adjusted gross profit was $396 million, an 11% increase year over year, with an adjusted gross margin of 39.8%, up nearly 525 basis points, exceeding expectations due to reduced input costs and cost-saving measures [4]. - Adjusted SG&A expenses were $270 million, flat year over year, but as a percentage of net sales, they increased by 100 basis points to 27.1%, primarily due to higher brand marketing investments [5]. - Adjusted operating profit rose 46% year over year to $126 million, with an adjusted operating margin of 12.7%, up 430 basis points [6]. Segment Analysis - The U.S. segment's net sales dropped 1% year over year, but the company gained 40 basis points of innerwear market share through increased marketing and innovations, resulting in an operating margin of 21.4%, up almost 470 basis points [8]. - International segment net sales fell about 4% on a reported basis, including a $15 million impact from unfavorable foreign exchange rates. However, on a constant-currency basis, international sales rose 2%, with growth in the Americas and Asia [9]. Guidance - For 2024, net sales from continuing operations are projected to be between $3.59 billion and $3.63 billion, reflecting an anticipated decline of nearly 4% year over year on a reported basis and approximately 2% on an organic basis at constant currency [12]. - Adjusted operating profit is expected to be between $395 million and $415 million, with adjusted earnings per share projected at 31-37 cents, down from earlier expectations [13]. - For the third quarter of 2024, net sales are anticipated to be between $920 million and $950 million, suggesting a nearly 3% year-over-year decline on a reported basis [14]. Other Financial Details - The company ended the quarter with cash and cash equivalents of $213.8 million, long-term debt of $3,224.2 million, and total stockholders' equity of $64.4 million, with over $1 billion available under its credit facility [10]. - The company generated $78 million in net cash from operating activities and reported free cash flow of $71 million in the second quarter [10]. Stock Performance - HBI's shares have gained 11.1% over the past three months, contrasting with a 16.1% decline in the industry [15].