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HanesBrands Announces Strong Third-Quarter 2021 Results

HanesBrands Inc. (NYSE: HBI), a global leader in iconic apparel brands, today announced results for the third quarter of 2021, with increased sales, operating profit, earnings per share and operating cash flow driven by strong point-of-sale performance and market share gains in its innerwear and activewear businesses.

“I want to thank our associates for delivering strong results in the quarter, particularly our manufacturing team, which has put us in position to meet consumer demand,” said Chief Executive Officer Steve Bratspies. “We are maintaining our fourth-quarter outlook for net sales and adjusted operating profit, driven by continued demand for our brands, our strong inventory position and our global team’s proven ability to manage ongoing macro challenges.

“We continue to make progress on our Full Potential plan as we invest in our iconic brands, build talent, enhance e-commerce capabilities and modernize our technology. We’re excited by the early results from Full Potential and are confident we can deliver the long-term plan we announced in May.”

Highlights from the quarter, as compared to 2019, include:

  • Strong revenue and profit performance that was in-line with or exceeded the high-end of the Company’s increased guidance ranges despite the unexpected lockdown in Australia that forced the closure of two-thirds of its stores for nearly the entire quarter. Stores in Australia are re-opening as the lockdowns are lifted.
  • Global Champion brand sales increased 20% with balanced growth between the U.S. and International. Performance was driven by strong consumer demand across channels in the U.S., continued growth in Europe and the ramp-up of partners in China.
  • U.S. Innerwear sales increased 25% due to the combination of strong consumer demand across the Company’s brand portfolio, which drove point-of-sale growth and increased market share gains, as well as the impact from pent-up consumer demand that is fueling category growth rates above historical levels. Performance in the quarter was driven by momentum in shapewear and innovation in bras and men’s underwear.
  • Consistent with the Company’s Full Potential plan to build its iconic brands, global media and marketing investment increased $25 million, helping drive higher point-of-sale trends and increased market share. These investments have improved Champion’s global brand awareness and consideration of the Company’s U.S. brands.
  • Full Potential plan improvements in core e-commerce capabilities delivered higher conversion rates and average order values. Total online sales grew 62%, including 50% growth on Company-owned websites. The strong online performance, both domestic and international, was driven by consumer demand for the Company’s brands across its owned websites, pure-plays and retailer-owned websites.

Third-Quarter 2021 Results

Net sales from continuing operations for the third quarter ended October 2, 2021 totaled $1.79 billion, an increase of $98 million, or 6%, including 33% growth in Champion brand sales globally. This compared with $1.69 billion for the quarter ended September 26, 2020, which included $179 million in sales of personal protective equipment (“PPE”) in response to the COVID-19 pandemic. Excluding PPE, net sales increased $276 million, or 18%, over prior year. The year-over-year growth was driven by strong consumer demand and point-of-sale trends in the U.S., Europe, Americas and certain Asia markets, including China, which more than offset headwinds from the extended government COVID-related lockdowns in Australia and Japan. Total constant currency third-quarter net sales increased 5%.

Due to the significant impact of the pandemic on prior year results, this release includes certain comparisons to the comparable 2019 periods for additional context. All 2019 results are rebased to reflect the European Innerwear business as discontinued operations as well as the exit of the C9 Champion mass program and the DKNY intimate apparel license.

Compared to third-quarter 2019, net sales from continuing operations increased $179 million, or 11%, including 20% growth in Champion brand sales globally. Total constant currency net sales increased 10%. Growth in the global innerwear and activewear businesses was driven by strong consumer demand, higher point-of-sale performance and market share gains.

For the third-quarter 2021, GAAP gross margin of 39.1% increased 530 basis points compared to prior year and 170 basis points compared to third-quarter 2019. Adjusted gross margin of 39.1% increased 250 basis points over last year and approximately 65 basis points over 2019. The margin expansion in both periods was driven by cost savings programs in the supply chain and the benefits from business mix, which more than offset higher transportation and inflation costs.

Third-quarter GAAP operating profit increased 24% to $235 million compared to prior year and decreased 10% compared to third-quarter 2019. GAAP operating margin of 13.1% increased 190 basis points compared to prior year and decreased 200 basis points compared to third quarter 2019.

Adjusted operating profit of $264 million increased $22 million, or 9%, compared to prior year and $20 million, or 8% compared to 2019. Adjusted operating margin of 14.7% increased approximately 50 basis points compared to last year as the gross margin benefits more than offset increased brand marketing investments and higher levels of inflation in distribution costs. As compared to third-quarter 2019, adjusted operating margin decreased approximately 40 basis points as higher brand marketing investments and higher levels of inflation more than offset the gross margin benefits.

The GAAP and adjusted effective tax rates for the third quarter were 7.9% and 15.0%, respectively, which compare to GAAP and adjusted effective tax rates of 16.0% and 17.1%, respectively, for the third quarter of 2020. For the third quarter of 2019, GAAP and adjusted effective tax rates were 10.5% and 10.2%, respectively.

On a GAAP basis, third-quarter income from continuing operations totaled $177 million, or $0.50 per diluted share. This compares to income from continuing operations of $118 million, or $0.34 per diluted share in the prior year period, and income from continuing operations of $189 million, or $0.52 per diluted share in third-quarter 2019.

Adjusted income from continuing operations totaled $188 million, or $0.53 per diluted share. This compares to adjusted income from continuing operations of $160 million, or $0.46 per diluted share, in the prior year period and adjusted income from continuing operations of $174 million, or $0.48 per diluted share, in third-quarter 2019.

(See the Note on Adjusted Measures and Reconciliation to GAAP Measures later in this news release for additional discussion and details of actions, which include pandemic-related and Full Potential plan charges.)

Third-Quarter 2021 Business Segment Summaries

Innerwear (vs 2020) Sales decreased $90 million, or 11% due to the overlap of last year’s $166 million of PPE sales. Men’s, Kids and Socks revenue increased mid-to-high single digits while Women’s revenue increased approximately 20%. Excluding PPE, Innerwear sales increased 12% over last year with strong point-of-sale growth across channels. Operating margin of 21.0% decreased 70 basis points compared to prior year due to fixed cost de-leverage from lower sales, higher transportation costs, increased investments in brand marketing and higher levels of inflation.

(vs 2019) Sales increased $140 million, or 25%, compared to third-quarter 2019, with double-digit growth in the Kids, Socks, Women’s and Men’s businesses. The growth was driven by the combination of strong consumer demand across the Company’s brand portfolio, which drove point-of-sale growth and increased market share gains, as well as the impact from pent-up consumer demand that is fueling category growth rates above historical levels. Year-to-date, the Company’s U.S. innerwear market share has increased approximately 140 basis points over 2019 with increased share positions in Men’s, Women’s, Kids and Socks. Operating margin in the quarter expanded approximately 10 basis points to 21.0% as the benefits from volume leverage and business mix essentially offset increased investments in brand marketing as well as higher inflation costs.

Activewear (vs 2020) Activewear sales grew $138 million, or 42% over prior year driven by strong double-digit growth in both the Champion and Hanes brands. The Company experienced strong point-of- sale trends across several channels in the quarter. The segment continued to benefit from pent-up consumer demand and the overlap of last year’s COVID-related headwinds. Segment operating margin of 16.5% increased approximately 740 basis points over prior period driven by fixed-cost leverage from higher sales and the benefits from business mix, which more than offset higher brand marketing investment.

(vs 2019) Activewear revenue increased $17 million, or 4%. Champion brand sales within the segment increased 14%, which more than offset declines in other brands. The Company experienced strong point-of-sale trends across the online, wholesale and distributor channels in the quarter, which was partially offset by declines in the college bookstore channel. Activewear’s operating margin decreased approximately 10 basis points compared to third-quarter 2019 as leverage from higher sales volume and benefits from business mix were essentially offset by increased investments in brand marketing.

International (vs 2020) International segment revenue increased $30 million, or 6%, compared to prior year. Excluding $13 million of PPE sales in the prior year quarter, third-quarter sales increased 9% on a reported basis and 7% on a constant currency basis. Constant currency sales grew in the Americas, Europe and China driven by strong consumer demand for the Company’s brands and the overlap of last year’s COVID-related headwinds. Constant currency sales declined in Japan and were consistent with prior year in Australia as both countries were impacted by government-mandated store closings due to the ongoing pandemic. For the quarter, the International segment’s operating margin of 16.1% decreased 385 basis points over prior year driven by de-leverage in the Japan and Australia businesses as well as increased brand marketing investment.

(vs 2019) International segment revenue increased $23 million, or more than 4%, compared to third- quarter 2019. On a constant currency basis, sales increased more than 1% with strong growth in Europe, the Americas and parts of Asia offsetting COVID-related headwinds in Japan and Australia. For the quarter, the International segment’s operating margin decreased 240 basis points compared to third-quarter 2019 driven by increased brand marketing investments as well as de-leverage in Japan and Australia.

Refinancing of Senior Secured Credit Facility and Retirement of 2025 Senior Notes

  • The Company intends to refinance its Senior Secured Credit Facility in the fourth quarter of 2021, subject to market conditions.
  • In conjunction with the refinancing, the Company intends to redeem its $700 million 5.375% 2025 Senior Notes using proceeds from the transaction and cash on hand.
  • The make-whole premium to redeem the 5.375% 2025 Senior Notes and transaction fees are estimated to result in a one-time charge of approximately $45 million, which is reflected in the Company’s fourth-quarter and full-year 2021 guidance ranges.
  • The Company estimates this transaction will result in approximately $35 million of annual savings in interest and other expense, with approximately $4 million recognized in the fourth-quarter 2021. The expected interest and other expense savings is reflected in the Company’s fourth-quarter and full-year 2021 guidance ranges.

European Innerwear Divestiture Update

A key pillar of the Full Potential plan is focusing HanesBrands’ portfolio to enable the Company to invest in the areas with the greatest potential for growth. As part of this plan, the Company previously announced its intention to sell its European Innerwear business. The Company has reached an agreement to sell this business to an affiliate of Regent, L.P., pending the completion of consultation with the European and French works councils representing employees of the European Innerwear business and customary closing conditions. Under the agreement, the purchaser will receive all the assets and operating liabilities of the European Innerwear business for a purchase price of one Euro. The transaction is expected to close in the first quarter of 2022.

“Focusing our portfolio is crucial to our long-term growth and selling our European Innerwear business represents a significant step forward in our Full Potential plan,” Bratspies said. “Our European Innerwear business has strong brands and great people, and this transaction helps position them for long-term success. I want to thank our European Innerwear associates for their commitment and all they have done for the Company over the years.”

Fourth-Quarter and Full-Year 2021 Financial Outlook

The following financial outlook is based on current market conditions and judgments of management and is subject to risks and uncertainties that may cause actual results to differ materially, many of which are further discussed in the Company’s most recent annual report on Form 10-K available at www.sec.gov and in the investors section of the Company’s website at www.Hanes.com/Investors.

For fourth-quarter 2021, which ends on January 1, 2022, the Company currently expects:

  • Net sales from continuing operations of approximately $1.71 billion to $1.78 billion, which represents approximately 3% growth over prior year at the midpoint and includes a projected benefit of approximately $6 million from changes in foreign currency exchange rates. This compares to net sales of $1.69 billion in fourth-quarter 2020, which included $28 million in PPE sales and approximately $45 million from the 53rd week.
  • Adjusting for PPE and the 53rd week in 2020, net sales at the midpoint of the guidance range are expected to increase 8% over the prior year period.
  • As compared to rebased fourth-quarter 2019, net sales at the midpoint are expected to increase 15%.
  • GAAP operating profit from continuing operations to range from approximately $182 million to $202 million.
  • Adjusted operating profit from continuing operations to range from approximately $200 million to $220 million. The midpoint of adjusted operating profit represents an operating margin of approximately 12.0% and reflects the impact of cost inflation as well as increased brand investment.
  • Charges for actions related to Full Potential of approximately $18 million.
  • Interest and other expenses of approximately $40 million, which excludes an approximate $45 million charge related to the expected refinancing of the Company’s Senior Secured Credit Facility and the make-whole premium for the planned redemption of its $700 million 5.375% 2025 Senior Notes.
  • An effective tax rate of approximately 12% on both a GAAP and adjusted basis.
  • GAAP earnings per share from continuing operations to range from approximately $0.24 to $0.29.
  • Adjusted earnings per share from continuing operations to range from approximately $0.40 to $0.45.

For fiscal-year 2021, which ends on January 1, 2022, the Company currently expects:

  • Net sales from continuing operations to total approximately $6.76 billion to $6.83 billion, which represents approximately 11% growth over prior year at the midpoint and includes a projected benefit of approximately $108 million from changes in foreign currency exchange rates. This compares to net sales of $6.13 billion in 2020, which included $820 million in sales of PPE and approximately $45 million from the 53rd week.
  • Adjusting for PPE and the 53rd week in 2020, net sales at the midpoint of the guidance range are expected to increase 29% over the prior year period.
  • As compared to rebased 2019, net sales at the midpoint are expected to increase 13%.
  • GAAP operating profit from continuing operations to range from approximately $825 million to $845 million.
  • Adjusted operating profit from continuing operations to range from approximately $910 million to $930 million. The midpoint of adjusted operating profit represents approximately 18% growth compared to prior year and 12% growth compared to 2019. The midpoint of adjusted operating profit guidance range represents an operating margin of 13.5%.
  • Full-year outlook reflects higher levels of cost inflation as compared to 2020 and 2019.
  • Incremental brand marketing investment of more than $50 million as compared to 2020.
  • Charges for actions related to Full Potential of approximately $85 million.
  • Interest and other expenses of approximately $175 million, which excludes an approximate $45 million charge related to the expected refinancing of the Company’s Senior Secured Credit Facility and the make-whole premium for the planned redemption of its $700 million 5.375% 2025 Senior Notes.
  • An effective tax rate of approximately 11% on a GAAP basis and approximately 14% on an adjusted basis.
  • GAAP earnings per share from continuing operations to range from approximately $1.53 to $1.58.
  • Adjusted earnings per share from continuing operations to range from approximately $1.79 to $1.84.
  • Cash flow from operations of approximately $550 million to $600 million.
  • Capital expenditures of approximately $75 million to $85 million.

HanesBrands has updated its quarterly frequently-asked-questions document, which is available at www.Hanes.com/FAQ.

Note on Adjusted Measures and Reconciliation to GAAP Measures

To supplement financial results prepared in accordance with generally accepted accounting principles, the Company provides quarterly and full-year results concerning certain non‐GAAP financial measures, including adjusted EPS from continuing operations, adjusted income from continuing operations, adjusted income tax expense, adjusted income from continuing operations before income tax expense, adjusted operating profit (and margin), adjusted SG&A, adjusted gross profit (and margin), EBITDA and adjusted EBITDA.

Adjusted EPS from continuing operations is defined as diluted EPS from continuing operations excluding actions and the tax effect on actions. Adjusted income from continuing operations is defined as income from continuing operations excluding actions and the tax effect on actions. Adjusted income tax expense is defined as income tax expense excluding actions. Adjusted income from continuing operations before income tax is defined as income from continuing operations before income tax excluding actions. Adjusted operating profit is defined as operating profit excluding actions. Adjusted SG&A is defined as selling, general and administrative expenses excluding actions. Adjusted gross profit is defined as gross profit excluding actions.

Charges for actions taken in 2021 include professional fees, operating model charges and intangible asset impairment charges related to our Full Potential plan. While these costs are not operational in nature and are not expected to continue for any singular transaction on an ongoing basis, similar types of costs, expenses and charges have occurred in prior periods and may recur in future periods depending upon future business plans and circumstances.

Charges for actions taken in 2020 include supply chain restructuring actions, program exit costs, COVID-19 related charges, Full Potential plan charges and the write-off of a discrete tax asset related to our Bras N Things acquisition. COVID-19 related charges include intangible asset and goodwill impairment charges, bad debt expense and supply chain re-startup costs. Full Potential plan charges for 2020 include inventory write-down charges related to our SKU reduction initiative and discontinuation of our PPE business.

Charges for actions taken in 2019 primarily represented supply chain network changes, program exit costs, and overhead reduction as well as completion of outstanding acquisition integration.

HanesBrands has chosen to present these non‐GAAP measures to investors to enable additional analyses of past, present and future operating performance and as a supplemental means of evaluating operations absent the effect of the Full Potential plan and other actions, as well as the COVID-19 pandemic. HanesBrands believes these non-GAAP measures provide management and investors with valuable supplemental information for analyzing the operating performance of the Company’s ongoing business during each period presented without giving effect to costs associated with the execution of any of the aforementioned actions taken.

The Company has also chosen to present EBITDA and adjusted EBITDA to investors because it considers these measures to be an important supplemental means of evaluating operating performance. EBITDA is defined as income from continuing operations before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA excluding actions and stock compensation expense. HanesBrands believes that EBITDA and adjusted EBITDA are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the industry, and management uses EBITDA and adjusted EBITDA for planning purposes in connection with setting its capital allocation strategy. EBITDA and adjusted EBITDA should not, however, be considered as measures of discretionary cash available to invest in the growth of the business.

In addition, the Company has chosen to present certain year-over-year comparisons with respect to the Company’s rebased 2019 business, which excludes the exited C9 Champion mass program and DKNY intimate apparel license. HanesBrands believes this information is useful to management and investors to facilitate a more meaningful comparison of the results of the Company’s ongoing business.

HanesBrands is a global company that reports financial information in U.S. dollars in accordance with GAAP. As a supplement to the Company’s reported operating results, HanesBrands also presents constant-currency financial information, which is a non-GAAP financial measure that excludes the impact of translating foreign currencies into U.S. dollars. The Company uses constant-currency information to provide a framework to assess how the business performed excluding the effects of changes in the rates used to calculate foreign currency translation.

To calculate foreign currency translation on a constant currency basis, operating results for the current-year period for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the average exchange rates in effect during the comparable period of the prior year (rather than the actual exchange rates in effect during the current year period).

HanesBrands believes constant-currency information is useful to management and investors to facilitate comparison of operating results and better identify trends in the Company’s businesses.

Non‐GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as an alternative to, or substitute for, financial results prepared in accordance with GAAP. Further, the non-GAAP measures presented may be different from non-GAAP measures with similar or identical names presented by other companies.

Reconciliations of these non-GAAP measures to the most directly comparable GAAP financial measures are presented in the supplemental financial information included with this news release.

Cautionary Statement Concerning Forward-Looking Statements

This news release contains certain forward-looking statements, as defined under U.S. federal securities laws, with respect to our long-term goals and trends associated with our business, as well as guidance as to future performance. In particular, among others, statements regarding the potential impact of the COVID-19 pandemic on our business and financial performance; guidance and predictions regarding expected operating results, including related to our Full Potential plan; statements made in the Fourth Quarter and Full-year 2021 Financial Outlook section of this news release; and statements regarding the anticipated refinancing of our Senior Secured Credit Facility and sale of our European Innerwear business, are forward-looking statements. These forward-looking statements are based on our current intent, beliefs, plans and expectations. Readers are cautioned not to place any undue reliance on any forward-looking statements. Forward-looking statements necessarily involve risks and uncertainties, many of which are outside of our control, that could cause actual results to differ materially from such statements and from our historical results and experience. These risks and uncertainties include such things as: our ability to successfully execute our Full Potential plan to achieve the desired results; the potential effects of the COVID-19 pandemic, including on consumer spending, global supply chains and the financial markets; the highly competitive and evolving nature of the industry in which we compete; the rapidly changing retail environment; our reliance on a relatively small number of customers for a significant portion of our sales; any inadequacy, interruption, integration failure or security failure with respect to our information technology; the impact of significant fluctuations and volatility in various input costs, such as cotton and oil-related materials, utilities, freight and wages; our ability to attract and retain a senior management team with the core competencies needed to support growth in global markets; significant fluctuations in foreign exchange rates; legal, regulatory, political and economic risks related to our international operations; our ability to effectively manage our complex multinational tax structure; and other risks identified from time to time in our most recent Securities and Exchange Commission reports, including our annual report on Form 10-K and quarterly reports on Form 10-Q. Since it is not possible to predict or identify all of the risks, uncertainties and other factors that may affect future results, the above list should not be considered a complete list. Any forward-looking statement speaks only as of the date on which such statement is made, and HanesBrands undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, other than as required by law.

HanesBrands

HanesBrands (NYSE: HBI) makes everyday apparel that is known and loved by consumers around the world for comfort, quality and value. Among the Company’s iconic brands are Hanes, the leading basic apparel brand in the United States; Champion, an innovator at the intersection of lifestyle and athletic apparel; and Bonds, which is setting new standards for design and sustainability. HBI employs 61,000 associates in 47 countries and has built a strong reputation for workplace quality and ethical business practices. The Company, a longtime leader in sustainability, launched aggressive 2030 goals to improve the lives of people, protect the planet and produce sustainable products. HBI is building on its unmatched strengths to unlock its #FullPotential and deliver long-term growth that benefits all of its stakeholders.

TABLE 1

HANESBRANDS INC.

Condensed Consolidated Statements of Income

(in thousands, except per share data)

(Unaudited)

Quarters Ended

Nine Months Ended

October 2,
2021

September 26,
2020

% Change

October 2,
2021

September 26,
2020

% Change

Net sales

$

1,789,551

$

1,691,863

5.8

%

$

5,048,891

$

4,438,016

13.8

%

Cost of sales

1,089,890

1,120,392

3,064,920

2,934,515

Gross profit

699,661

571,471

22.4

%

1,983,971

1,503,501

32.0

%

As a % of net sales

39.1

%

33.8

%

39.3

%

33.9

%

Selling, general and administrative expenses

465,015

382,384

1,341,809

1,064,328

As a % of net sales

26.0

%

22.6

%

26.6

%

24.0

%

Operating profit

234,646

189,087

24.1

%

642,162

439,173

46.2

%

As a % of net sales

13.1

%

11.2

%

12.7

%

9.9

%

Other expenses

1,811

4,898

6,227

15,652

Interest expense, net

40,860

43,500

127,760

120,602

Income from continuing operations before income tax expense

191,975

140,689

508,175

302,919

Income tax expense

15,228

22,464

55,161

43,008

Income from continuing operations

176,747

118,225

49.5

%

453,014

259,911

74.3

%

Loss from discontinued operations, net of tax

(24,970

)

(14,947

)

(435,823

)

(3,326

)

Net income

$

151,777

$

103,278

$

17,191

$

256,585

Earnings (loss) per share - basic:

Continuing operations

$

0.50

$

0.34

$

1.29

$

0.74

Discontinued operations

(0.07

)

(0.04

)

(1.24

)

(0.01

)

Net income

$

0.43

$

0.29

$

0.05

$

0.73

Earnings (loss) per share - diluted:

Continuing operations

$

0.50

$

0.34

$

1.29

$

0.73

Discontinued operations

(0.07

)

(0.04

)

(1.24

)

(0.01

)

Net income

$

0.43

$

0.29

$

0.05

$

0.72

Weighted average shares outstanding:

Basic

351,071

350,703

351,020

353,419

Diluted

352,251

351,604

351,996

353,956

 

TABLE 2-A

HANESBRANDS INC.

Supplemental Financial Information

Impact of Foreign Currency

(in thousands, except per share data)

(Unaudited)

Quarter Ended October 2, 2021

As

Reported

Impact from

Foreign Currency1

Constant

Currency

Quarter

Ended

September 26,

2020

% Change,

As Reported

% Change,

Constant

Currency

As reported under GAAP:

Net sales

$

1,789,551

$

8,446

$

1,781,105

$

1,691,863

5.8

%

5.3

%

Gross profit

699,661

4,169

695,492

571,471

22.4

21.7

Operating profit

234,646

1,276

233,370

189,087

24.1

23.4

Diluted earnings per share from continuing operations

$

0.50

$

0.00

$

0.50

$

0.34

47.1

%

47.1

%

As adjusted:2

Net sales

$

1,789,551

$

8,446

$

1,781,105

$

1,691,863

5.8

%

5.3

%

Gross profit

699,553

4,169

695,384

619,070

13.0

12.3

Operating profit

263,742

1,276

262,466

241,344

9.3

8.8

Diluted earnings per share from continuing operations

$

0.53

$

0.00

$

0.53

$

0.46

15.2

%

15.2

%

Nine Months Ended October 2, 2021

As

Reported

Impact from

Foreign Currency1

Constant

Currency

Nine Months

Ended

September 26,

2020

% Change,

As Reported

% Change,

Constant

Currency

As reported under GAAP:

Net sales

$

5,048,891

$

102,217

$

4,946,674

$

4,438,016

13.8

%

11.5

%

Gross profit

1,983,971

55,584

1,928,387

1,503,501

32.0

28.3

Operating profit

642,162

17,228

624,934

439,173

46.2

42.3

Diluted earnings per share from continuing operations

$

1.29

$

0.04

$

1.24

$

0.73

76.7

%

69.9

%

As adjusted:2

Net sales

$

5,048,891

$

102,217

$

4,946,674

$

4,438,016

13.8

%

11.5

%

Gross profit

1,988,570

55,584

1,932,986

1,591,329

25.0

21.5

Operating profit

709,315

17,228

692,087

548,033

29.4

26.3

Diluted earnings per share from continuing operations

$

1.39

$

0.04

$

1.35

$

0.98

41.8

%

37.8

%

1

Effect of the change in foreign currency exchange rates year-over-year. Calculated by applying prior period exchange rates to the current year financial results.

2

Results for the quarters and nine months ended October 2, 2021 and September 26, 2020 reflect adjustments for restructuring and other action-related charges. See "Reconciliation of Select GAAP Measures to Non-GAAP Measures" in Tables 6-A through 6-E.

 

TABLE 2-B

HANESBRANDS INC.

Supplemental Financial Information

Impact of Foreign Currency

(in thousands, except per share data)

(Unaudited)

Quarter Ended October 2, 2021

As

Reported

Impact from

Foreign Currency1

Constant

Currency

Quarter

Ended

September 28,

2019

% Change,

As Reported

% Change,

Constant

Currency

As reported under GAAP:

Net sales

$

1,789,551

$

16,060

$

1,773,491

$

1,729,308

3.5

%

2.6

%

Gross profit

699,661

8,678

690,983

646,469

8.2

6.9

Operating profit

234,646

2,212

232,434

261,178

(10.2

)

(11.0

)

Diluted earnings per share from continuing operations

$

0.50

$

0.01

$

0.50

$

0.52

(3.8

)%

(3.8

)%

As adjusted:2

Net sales

$

1,789,551

$

16,060

$

1,773,491

$

1,610,610

11.1

%

10.1

%

Gross profit

699,553

8,678

690,875

619,487

12.9

11.5

Operating profit

263,742

2,212

261,530

243,749

8.2

7.3

Diluted earnings per share from continuing operations

$

0.53

$

0.01

$

0.53

$

0.48

10.4

%

10.4

%

Nine Months Ended October 2, 2021

As

Reported

Impact from

Foreign Currency1

Constant

Currency

Nine Months

Ended

September 28,

2019

% Change,

As Reported

% Change,

Constant

Currency

As reported under GAAP:

Net sales

$

5,048,891

$

64,893

$

4,983,998

$

4,815,704

4.8

%

3.5

%

Gross profit

1,983,971

35,968

1,948,003

1,795,573

10.5

8.5

Operating profit

642,162

10,799

631,363

620,679

3.5

1.7

Diluted earnings per share from continuing operations

$

1.29

$

0.03

$

1.26

$

1.13

14.2

%

11.5

%

As adjusted:2

Net sales

$

5,048,891

$

64,893

$

4,983,998

$

4,484,192

12.6

%

11.1

%

Gross profit

1,988,570

35,968

1,952,602

1,733,436

14.7

12.6

Operating profit

709,315

10,799

698,516

590,475

20.1

18.3

Diluted earnings per share from continuing operations

$

1.39

$

0.03

$

1.36

$

1.06

31.1

%

28.3

%

1

Effect of the change in foreign currency exchange rates year-over-year. Calculated by applying prior period exchange rates to the current year financial results.

2

Results for the quarters and nine months ended October 2, 2021 and September 28, 2019 reflect adjustments for restructuring and other action-related charges. Results for the quarter and nine months ended September 28, 2019 also reflect adjustments for the exited C9 Champion mass program and DKNY intimate apparel license. See "Reconciliation of Select GAAP Measures to Non-GAAP Measures" in Tables 6-A through 6-E.

 

TABLE 3-A

HANESBRANDS INC.

Supplemental Financial Information

By Business Segment

(in thousands)

(Unaudited)

Quarters Ended

Nine Months Ended

October 2,
2021

September 26,
2020

% Change

October 2,
2021

September 26,
2020

% Change

Segment net sales:

Innerwear1

$

702,617

$

792,600

(11.4

)%

$

2,053,702

$

2,309,816

(11.1

)%

Activewear

462,499

324,921

42.3

1,230,691

781,300

57.5

International2

536,483

506,203

6.0

1,521,667

1,185,718

28.3

Other

87,952

68,139

29.1

242,831

161,182

50.7

Total net sales

$

1,789,551

$

1,691,863

5.8

%

$

5,048,891

$

4,438,016

13.8

%

Segment operating profit:

Innerwear

$

147,651

$

172,000

(14.2

)%

$

461,237

$

558,075

(17.4

)%

Activewear

76,172

29,568

157.6

177,813

31,925

457.0

International

86,371

101,029

(14.5

)

235,451

156,936

50.0

Other

11,288

3,059

269.0

22,394

(12,263

)

NM

General corporate expenses/other

(57,740

)

(64,312

)

(10.2

)

(187,580

)

(186,640

)

0.5

Total operating profit before restructuring and other action-related charges

263,742

241,344

9.3

709,315

548,033

29.4

Restructuring and other action-related charges

(29,096

)

(52,257

)

(44.3

)

(67,153

)

(108,860

)

(38.3

)

Total operating profit

$

234,646

$

189,087

24.1

%

$

642,162

$

439,173

46.2

%

1

The Innerwear segment includes $166 million and $779 million of net sales of personal protective equipment in the third quarter and nine months of 2020, respectively.

2

The International segment includes $13 million of net sales of personal protective equipment in the third quarter and nine months of 2020.

 

Quarters Ended

Nine Months Ended

October 2,
2021

September 26,
2020

Basis

Points Change

October 2,
2021

September 26,
2020

Basis

Points Change

Segment operating margin:

Innerwear

21.0

%

21.7

%

(69

)

22.5

%

24.2

%

(170

)

Activewear

16.5

9.1

737

14.4

4.1

1,036

International

16.1

20.0

(386

)

15.5

13.2

224

Other

12.8

4.5

834

9.2

(7.6

)

1,683

General corporate expenses/other

(3.2

)

(3.8

)

57

(3.7

)

(4.2

)

49

Total operating margin before restructuring and other action-related charges

14.7

14.3

47

14.0

12.3

170

Restructuring and other action-related charges

(1.6

)

(3.1

)

146

(1.3

)

(2.5

)

112

Total operating margin

13.1

%

11.2

%

194

12.7

%

9.9

%

282

 

TABLE 3-B

HANESBRANDS INC.

Supplemental Financial Information

By Business Segment

(in thousands)

(Unaudited)

Quarters Ended

Nine Months Ended

October 2,

2021

September 28,

2019

Rebased1

% Change

October 2,

2021

September 28,

2019

Rebased1

% Change

Segment net sales:

Innerwear

$

702,617

$

562,285

25.0

%

$

2,053,702

$

1,686,176

21.8

%

Activewear

462,499

445,587

3.8

1,230,691

1,117,048

10.2

International

536,483

513,382

4.5

1,521,667

1,435,030

6.0

Other

87,952

89,356

(1.6

)

242,831

245,938

(1.3

)

Total net sales

$

1,789,551

$

1,610,610

11.1

%

$

5,048,891

$

4,484,192

12.6

%

Segment operating profit:

Innerwear

$

147,651

$

117,771

25.4

%

$

461,237

$

367,894

25.4

%

Activewear

76,172

73,738

3.3

177,813

143,763

23.7

International

86,371

94,908

(9.0

)

235,451

246,174

(4.4

)

Other

11,288

12,898

(12.5

)

22,394

23,327

(4.0

)

General corporate expenses/other

(57,740

)

(55,566

)

3.9

(187,580

)

(190,683

)

(1.6

)

Total operating profit before restructuring and other action-related charges

263,742

243,749

8.2

709,315

590,475

20.1

Restructuring and other action-related charges

(29,096

)

(9,843

)

195.6

(67,153

)

(43,448

)

54.6

Total operating profit

$

234,646

$

233,906

0.3

%

$

642,162

$

547,027

17.4

%

 

Quarters Ended

Nine Months Ended

October 2,

2021

September 28,

2019

Rebased1

Basis Points

Change

October 2,

2021

September 28,

2019

Rebased1

Basis Points

Change

Segment operating margin:

Innerwear

21.0

%

20.9

%

7

22.5

%

21.8

%

64

Activewear

16.5

16.5

(8

)

14.4

12.9

158

International

16.1

18.5

(239

)

15.5

17.2

(168

)

Other

12.8

14.4

(160

)

9.2

9.5

(26

)

General corporate expenses/other

(3.2

)

(3.4

)

22

(3.7

)

(4.3

)

54

Total operating margin before restructuring and other action-related charges

14.7

15.1

(40

)

14.0

13.2

88

Restructuring and other action-related charges

(1.6

)

(0.6

)

(101

)

(1.3

)

(1.0

)

(36

)

Total operating margin

13.1

%

14.5

%

(141

)

12.7

%

12.2

%

52

1

Results for the quarter and nine months ended September 28, 2019 reflect adjustments for the exited C9 Champion mass program and DKNY intimate apparel license. See “Reconciliation of Select GAAP Measures to Non-GAAP Measures” in Tables 6-A through 6-E.

 

TABLE 4

HANESBRANDS INC.

Condensed Consolidated Balance Sheets

(in thousands)

(Unaudited)

October 2,
2021

January 2,
2021

September 26,
2020

Assets

Cash and cash equivalents

$

873,628

$

900,615

$

716,921

Trade accounts receivable, net

928,039

768,221

921,434

Inventories

1,629,506

1,367,758

1,996,851

Other current assets

172,617

158,700

191,541

Current assets of discontinued operations

304,124

234,086

279,331

Total current assets

3,907,914

3,429,380

4,106,078

Property, net

440,804

477,821

484,939

Right-of-use assets

372,212

432,631

422,543

Trademarks and other identifiable intangibles, net

1,227,457

1,293,847

1,230,757

Goodwill

1,136,173

1,158,938

1,154,449

Deferred tax assets

327,196

367,976

193,015

Other noncurrent assets

51,049

64,773

93,849

Noncurrent assets of discontinued operations

494,501

482,911

Total assets

$

7,462,805

$

7,719,867

$

8,168,541

Liabilities

Accounts payable

$

1,239,960

$

891,868

$

1,088,556

Accrued liabilities

718,545

609,864

590,778

Lease liabilities

122,545

136,510

143,753

Notes payable

11

Current portion of long-term debt

37,500

263,936

Current liabilities of discontinued operations

299,498

222,183

208,506

Total current liabilities

2,418,048

2,124,361

2,031,604

Long-term debt

3,626,547

3,739,434

3,972,212

Lease liabilities - noncurrent

276,595

331,577

317,834

Pension and postretirement benefits

321,323

381,457

324,683

Other noncurrent liabilities

183,723

216,091

256,238

Noncurrent liabilities of discontinued operations

112,989

116,437

Total liabilities

6,826,236

6,905,909

7,019,008

Stockholders’ equity

Preferred stock

Common stock

3,492

3,488

3,483

Additional paid-in capital

316,112

307,883

306,157

Retained earnings

928,293

1,069,546

1,454,676

Accumulated other comprehensive loss

(611,328

)

(566,959

)

(614,783

)

Total stockholders’ equity

636,569

813,958

1,149,533

Total liabilities and stockholders’ equity

$

7,462,805

$

7,719,867

$

8,168,541

 

TABLE 5

HANESBRANDS INC.

Condensed Consolidated Statements of Cash Flows1

(in thousands)

(Unaudited)

Quarters Ended

Nine Months Ended

October 2,
2021

September 26,
2020

October 2,
2021

September 26,
2020

Operating Activities:

Net income

$

151,777

$

103,278

$

17,191

$

256,585

Adjustments to reconcile net income to net cash from operating activities:

Depreciation

19,618

22,277

63,183

67,676

Amortization of acquisition intangibles

4,718

6,304

15,696

18,503

Other amortization

2,796

2,984

8,610

8,091

Impairment of intangible assets and goodwill

163,047

20,319

Loss on classification of assets held for sale

30,562

266,742

Amortization of debt issuance costs

2,581

3,184

10,250

8,303

Other

12,336

9,411

(1,888

)

25,658

Changes in assets and liabilities:

Accounts receivable

(1,819

)

216,255

(201,925

)

(175,879

)

Inventories

(117,316

)

(197,958

)

(292,465

)

(259,367

)

Other assets

2,591

(11,789

)

7,042

(43,359

)

Accounts payable

90,716

(20,772

)

391,034

189,566

Accrued pension and postretirement benefits

(1,292

)

353

(40,468

)

(18,965

)

Accrued liabilities and other

117,852

115,488

121,327

134,091

Net cash from operating activities

315,120

249,015

527,376

231,222

Investing Activities:

Capital expenditures

(29,989

)

(2,521

)

(55,320

)

(49,033

)

Proceeds from sales of assets

24

265

2,479

331

Other

1,500

1,795

8,437

7,618

Net cash from investing activities

(28,465

)

(461

)

(44,404

)

(41,084

)

Financing Activities:

Repayments on Term Loan Facilities

(9,375

)

(315,625

)

Borrowings on Accounts Receivable Securitization Facility

227,061

Repayments on Accounts Receivable Securitization Facility

(227,061

)

Borrowings on Revolving Loan Facilities

1,638,000

Repayments on Revolving Loan Facilities

(118,189

)

(1,756,189

)

Borrowings on Senior Notes

700,000

Borrowings on International Debt

31,222

Repayments on International Debt

(36,383

)

(36,383

)

Borrowings on notes payable

66,759

49,889

109,397

166,558

Repayments on notes payable

(66,531

)

(53,735

)

(109,597

)

(166,108

)

Share repurchases

(200,269

)

Cash dividends paid

(52,380

)

(52,236

)

(157,099

)

(158,132

)

Other

(476

)

(1,223

)

(3,000

)

(15,258

)

Net cash from financing activities

(62,003

)

(211,877

)

(475,924

)

203,441

Effect of changes in foreign exchange rates on cash

(10,427

)

11,721

(27,207

)

9,052

Change in cash, cash equivalents and restricted cash

214,225

48,398

(20,159

)

402,631

Cash, cash equivalents and restricted cash at beginning of period

676,219

684,156

910,603

329,923

Cash, cash equivalents and restricted cash at end of period

890,444

732,554

890,444

732,554

Less restricted cash at end of period

1,073

1,073

Cash and cash equivalents at end of period

$

890,444

$

731,481

$

890,444

$

731,481

Balances included in the Condensed Consolidated Balance Sheets:

Cash and cash equivalents

$

873,628

$

716,921

$

873,628

$

716,921

Cash and cash equivalents included in current assets of discontinued operations

16,816

14,560

16,816

14,560

Cash and cash equivalents at end of period

$

890,444

$

731,481

$

890,444

$

731,481

1

The cash flows related to discontinued operations have not been segregated and remain included in the major classes of assets and liabilities. Accordingly, the Condensed Consolidated Statements of Cash Flows include the results of continuing and discontinued operations.

 

TABLE 6-A

HANESBRANDS INC.

Supplemental Financial Information

Reconciliation of Select GAAP Measures to Non-GAAP Measures

(in thousands, except per share data)

(Unaudited)

Quarter Ended October 2, 2021

Gross Profit

Selling, General

and

Administrative

Expenses

Operating

Profit

Income

From

Continuing

Operations

Before

Income Tax

Expense

Income Tax

Expense

Income

From

Continuing

Operations

Diluted

Earnings Per

Share From

Continuing

Operations1

As reported

$

699,661

$

(465,015

)

$

234,646

$

191,975

$

(15,228

)

$

176,747

$

0.50

As a percentage of net sales

39.1

%

26.0

%

13.1

%

Restructuring and other action-related charges:

Full Potential Plan:

Professional services

11,283

11,283

11,283

11,283

0.03

Operating model

16,000

16,000

16,000

16,000

0.05

Other

(108

)

1,921

1,813

1,813

1,813

0.01

Discrete tax benefits

(11,802

)

(11,802

)

(0.03

)

Tax effect on actions

(6,131

)

(6,131

)

(0.02

)

Total restructuring and other action-related charges

(108

)

29,204

29,096

29,096

(17,933

)

11,163

0.03

As adjusted

$

699,553

$

(435,811

)

$

263,742

$

221,071

$

(33,161

)

$

187,910

$

0.53

As a percentage of net sales

39.1

%

24.4

%

14.7

%

Nine Months Ended October 2, 2021

Gross Profit

Selling, General

and

Administrative

Expenses

Operating

Profit

Income

From

Continuing

Operations

Before

Income Tax

Expense

Income Tax

Expense

Income

From

Continuing

Operations

Diluted

Earnings Per

Share From

Continuing

Operations1

As reported

$

1,983,971

$

(1,341,809

)

$

642,162

$

508,175

$

(55,161

)

$

453,014

$

1.29

As a percentage of net sales

39.3

%

26.6

%

12.7

%

Restructuring and other action-related charges:

Full Potential Plan:

Professional services

36,793

36,793

36,793

36,793

0.10

Operating model

17,600

17,600

17,600

17,600

0.05

Impairment of intangible assets

7,302

7,302

7,302

7,302

0.02

Other

4,599

859

5,458

5,458

5,458

0.02

Discrete tax benefits

(19,097

)

(19,097

)

(0.05

)

Tax effect on actions

(12,041

)

(12,041

)

(0.03

)

Total restructuring and other action-related charges

4,599

62,554

67,153

67,153

(31,138

)

36,015

0.10

As adjusted

$

1,988,570

$

(1,279,255

)

$

709,315

$

575,328

$

(86,299

)

$

489,029

$

1.39

As a percentage of net sales

39.4

%

25.3

%

14.0

%

1

Amounts may not be additive due to rounding.

Including the favorable foreign currency impact of $1 million, global Champion sales excluding C9 Champion increased approximately 33% in the third quarter of 2021 compared to the third quarter of 2020. On a constant currency basis, global Champion sales excluding C9 Champion increased approximately 33% in the third quarter of 2021 compared to the third quarter of 2020.

Including the favorable foreign currency impact of $9 million, global Champion sales excluding C9 Champion increased approximately 20% in the third quarter of 2021 compared to the third quarter of 2019. On a constant currency basis, global Champion sales excluding C9 Champion increased approximately 19% in the third quarter of 2021 compared to the third quarter of 2019.

TABLE 6-B

HANESBRANDS INC.

Supplemental Financial Information

Reconciliation of Select GAAP Measures to Non-GAAP Measures

(in thousands, except per share data)

(Unaudited)

Quarter Ended September 26, 2020

Gross Profit

Selling, General

and

Administrative

Expenses

Operating

Profit

Income

From

Continuing

Operations

Before

Income Tax

Expense

Income Tax

Expense

Income

From

Continuing

Operations

Diluted

Earnings Per

Share From

Continuing

Operations1

As reported

$

571,471

$

(382,384

)

$

189,087

$

140,689

$

(22,464

)

$

118,225

$

0.34

As a percentage of net sales

33.8

%

22.6

%

11.2

%

Restructuring and other action-related charges:

Supply chain actions

2,098

2,098

2,098

2,098

0.01

Program exit costs

356

356

356

356

0.00

Other

(4

)

1,199

1,195

1,195

1,195

0.00

COVID-19 related charges:

Supply chain re-startup

45,149

3,459

48,608

48,608

48,608

0.14

Discrete tax benefits

(3,113

)

(3,113

)

(0.01

)

Tax effect on actions

(7,360

)

(7,360

)

(0.02

)

Total restructuring and other action-related charges

47,599

4,658

52,257

52,257

(10,473

)

41,784

0.12

As adjusted

$

619,070

$

(377,726

)

$

241,344

$

192,946

$

(32,937

)

$

160,009

$

0.46

As a percentage of net sales

36.6

%

22.3

%

14.3

%

Nine Months Ended September 26, 2020

Gross Profit

Selling, General

and

Administrative

Expenses

Operating

Profit

Income

From

Continuing

Operations

Before

Income Tax

Expense

Income Tax

Expense

Income

From

Continuing

Operations

Diluted

Earnings Per

Share From

Continuing

Operations1

As reported

$

1,503,501

$

(1,064,328

)

$

439,173

$

302,919

$

(43,008

)

$

259,911

$

0.73

As a percentage of net sales

33.9

%

24.0

%

9.9

%

Restructuring and other action-related charges:

Supply chain actions

18,800

18,800

18,800

18,800

0.05

Program exit costs

9,387

467

9,854

9,854

9,854

0.03

Other

(377

)

7,688

7,311

7,311

7,311

0.02

COVID-19 related charges:

Supply chain re-startup

45,149

3,459

48,608

48,608

48,608

0.14

Bad debt

9,418

9,418

9,418

9,418

0.03

Inventory

14,869

14,869

14,869

14,869

0.04

Discrete tax benefits

(3,113

)

(3,113

)

(0.01

)

Tax effect on actions

(17,581

)

(17,581

)

(0.05

)

Total restructuring and other action-related

charges

87,828

21,032

108,860

108,860

(20,694

)

88,166

0.25

As adjusted

$

1,591,329

$

(1,043,296

)

$

548,033

$

411,779

$

(63,702

)

$

348,077

$

0.98

As a percentage of net sales

35.9

%

23.5

%

12.3

%

1

Amounts may not be additive due to rounding.

 

TABLE 6-C

HANESBRANDS INC.

Supplemental Financial Information

Reconciliation of Select GAAP Measures to Non-GAAP Measures

(in thousands, except per share data)

(Unaudited)

Quarter Ended September 28, 2019

Net Sales

Gross Profit

Selling,

General

and

Administrative

Expenses

Operating

Profit

Income

From

Continuing

Operations

Before

Income Tax

Expense

Income

Tax Expense

Income

From

Continuing

Operations

Diluted

Earnings Per

Share From

Continuing

Operations1

As reported

$

1,729,308

$

646,469

$

(385,291

)

$

261,178

$

211,134

$

(22,129

)

$

189,005

$

0.52

Less exited programs2

(118,698

)

(36,290

)

9,018

(27,272

)

(27,272

)

3,848

(23,424

)

(0.06

)

As rebased

1,610,610

610,179

(376,273

)

233,906

183,862

(18,281

)

165,581

0.45

As a percentage of net sales

37.9

%

23.4

%

14.5

%

Restructuring and other action-related charges:

Supply chain actions

9,308

9,308

9,308

9,308

0.03

Other

535

535

535

535

0.00

Tax effect on actions

(1,389

)

(1,389

)

0.00

Total restructuring and other action-related charges

9,308

535

9,843

9,843

(1,389

)

8,454

0.02

As adjusted

$

1,610,610

$

619,487

$

(375,738

)

$

243,749

$

193,705

$

(19,670

)

$

174,035

$

0.48

As a percentage of net sales

38.5

%

23.3

%

15.1

%

 

Nine Months Ended September 28, 2019

Net Sales

Gross Profit

Selling, General

and

Administrative

Expenses

Operating

Profit

Income

From

Continuing

Operations

Before

Income Tax

Expense

Income

Tax Expense

Income

From

Continuing

Operations

Diluted

Earnings Per

Share From

Continuing

Operations1

As reported

$

4,815,704

$

1,795,573

$

(1,174,894

)

$

620,679

$

461,418

$

(46,708

)

$

414,710

$

1.13

Less exited programs2

(331,512

)

(101,347

)

27,695

(73,652

)

(73,652

)

10,388

(63,264

)

(0.17

)

As rebased

4,484,192

1,694,226

(1,147,199

)

547,027

387,766

(36,320

)

351,446

0.96

As a percentage of net sales

37.8

%

25.6

%

12.2

%

Restructuring and other action-related charges:

Supply chain actions

39,210

39,210

39,210

39,210

0.11

Other

4,238

4,238

4,238

4,238

0.01

Tax effect on actions

(6,127

)

(6,127

)

(0.02

)

Total restructuring and other action-related charges

39,210

4,238

43,448

43,448

(6,127

)

37,321

0.10

As adjusted

$

4,484,192

$

1,733,436

$

(1,142,961

)

$

590,475

$

431,214

$

(42,447

)

$

388,767

$

1.06

As a percentage of net sales

38.7

%

25.5

%

13.2

%

1

Amounts may not be additive due to rounding.

2

Includes the results for the exited C9 Champion mass program and the DKNY intimate apparel license.

 

TABLE 6-D

HANESBRANDS INC.

Supplemental Financial Information

Reconciliation of Select GAAP Measures to Non-GAAP Measures

(in thousands, except per share data)

(Unaudited)

Quarter Ended September 28, 2019

As Reported

Less: Exited Programs1

Adjusted for Exited Programs

Less: Restructuring and other action-related charges

Rebased

Segment net sales:

Innerwear

$

578,453

$

16,168

$

562,285

$

$

562,285

Activewear

548,117

102,530

445,587

445,587

International

513,382

513,382

513,382

Other

89,356

89,356

89,356

Total net sales

$

1,729,308

$

118,698

$

1,610,610

$

$

1,610,610

Segment operating profit:

Innerwear

$

121,467

$

3,696

$

117,771

$

$

117,771

Activewear

97,314

23,576

73,738

73,738

International

94,908

94,908

94,908

Other

12,898

12,898

12,898

General corporate expenses/other

(55,566

)

(55,566

)

(55,566

)

Restructuring and other action-related charges

(9,843

)

(9,843

)

(9,843

)

Total operating profit

$

261,178

$

27,272

$

233,906

$

(9,843

)

$

243,749

Nine Months Ended September 28, 2019

As Reported

Less: Exited Programs1

Adjusted for Exited Programs

Less: Restructuring and other action-related charges

Rebased

Segment net sales:

Innerwear

$

1,733,002

$

46,826

$

1,686,176

$

$

1,686,176

Activewear

1,401,734

284,686

1,117,048

1,117,048

International

1,435,030

1,435,030

1,435,030

Other

245,938

245,938

245,938

Total net sales

$

4,815,704

$

331,512

$

4,484,192

$

$

4,484,192

Segment operating profit:

Innerwear

$

375,623

$

7,729

$

367,894

$

$

367,894

Activewear

209,686

65,923

143,763

143,763

International

246,174

246,174

246,174

Other

23,327

23,327

23,327

General corporate expenses/other

(190,683

)

(190,683

)

(190,683

)

Restructuring and other action-related charges

(43,448

)

(43,448

)

(43,448

)

Total operating profit

$

620,679

$

73,652

$

547,027

$

(43,448

)

$

590,475

1

Includes the results for the exited C9 Champion mass program and the DKNY intimate apparel license.

 

TABLE 6-E

HANESBRANDS INC.

Supplemental Financial Information

Reconciliation of Select GAAP Measures to Non-GAAP Measures

(in thousands, except per share data)

(Unaudited)

Last Twelve Months

October 2,
2021

September 26,
2020

EBITDA1:

Income from continuing operations

$

160,816

$

418,525

Interest expense, net

171,396

161,155

Income tax expense (benefit)

(97,787

)

66,536

Depreciation and amortization

116,145

111,336

Total EBITDA

350,570

757,552

Total restructuring and other action-related charges (excluding tax effect on actions)

692,489

127,927

Stock compensation expense

15,017

13,813

Total EBITDA, as adjusted

$

1,058,076

$

899,292

Net debt:

Debt (current and long-term debt)

$

3,664,047

$

3,972,212

Notes payable

11

(Less) Cash and cash equivalents

(873,628

)

(716,921

)

Net debt

$

2,790,419

$

3,255,302

Net debt/EBITDA, as adjusted

2.6

3.6

1

Earnings from continuing operations before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP financial measure.

 

Quarters Ended

Nine Months Ended

October 2,
2021

September 26,
2020

October 2,
2021

September 26,
2020

Free cash flow1:

Net cash from operating activities

$

315,120

$

249,015

$

527,376

$

231,222

Capital expenditures

(29,989

)

(2,521

)

(55,320

)

(49,033

)

Free cash flow

$

285,131

$

246,494

$

472,056

$

182,189

1

Free cash flow includes the results from continuing and discontinued operations.

 

TABLE 7

HANESBRANDS INC.

Supplemental Financial Information

Reconciliation of GAAP Outlook to Adjusted Outlook

(in thousands, except per share data)

(Unaudited)

Quarter Ended

Year Ended

January 1,
2022

January 1,
2022

Operating profit outlook, as calculated under GAAP

$182,000 to $202,000

$825,000 to $845,000

Restructuring and other action-related charges

$18,000

$85,000

Operating profit outlook, as adjusted

$200,000 to $220,000

$910,000 to $930,000

Diluted earnings per share from continuing operations, as calculated under GAAP1

$0.24 to $0.29

$1.53 to $1.58

Restructuring and other action-related charges

$0.16

$0.26

Diluted earnings per share from continuing operations, as adjusted

$0.40 to $0.45

$1.79 to $1.84

1

The company expects approximately 353 million diluted weighted average shares outstanding for the quarter ended January 1, 2022 and approximately 352 million diluted weighted average shares outstanding for the year ended January 1, 2022.

Contacts:

News Media contact: Kirk Saville (336) 979-7293
Analysts and Investors contact: T.C. Robillard (336) 519-2115

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