Hanesbrands Q1 2023 Earnings Report
Key Takeaways
HanesBrands Inc. announced first-quarter 2023 results, reporting net sales, operating profit, and EPS from continuing operations within its guidance range. The company generated positive cash flow and sequentially reduced inventory during the quarter. It also provided second-quarter 2023 guidance and reiterated its full-year outlook, including the expectation to exit the year with lower inventory, lower debt, and meaningfully higher gross and operating margin run-rates.
Generated positive free cash flow and sequentially reduced inventory.
Expanded innovation globally with the launch of Bonds Whoopsies toddler training underwear in Australia and expanded distribution of Hanes Originals in the U.S.
Successfully refinanced its 2024 maturities with a $900 million senior secured term loan B facility due in 2030 and $600 million of senior unsecured notes due in 2031.
Net sales from continuing operations were $1.39 billion, a decrease of 12% compared to last year.
Hanesbrands
Hanesbrands
Hanesbrands Revenue by Segment
Hanesbrands Revenue by Geographic Location
Forward Guidance
For second-quarter 2023, Hanesbrands expects net sales of approximately $1.42 billion to $1.47 billion, GAAP operating profit of approximately $55 million to $75 million, and GAAP loss per share from continuing operations to range from approximately $0.09 to $0.04.
Positive Outlook
- The Company is providing guidance on tax expense due to the expected fluctuation of its quarterly tax rate, stemming from the deferred tax reserve matter previously disclosed in the fourth quarter of 2022.
- Importantly, the reserve does not impact cash taxes.
- Some portion of the reserve may reverse in future periods.
- Cash flow from operations outlook, as calculated under GAAP $500,000
- Capital expenditures outlook $70,000
Challenges Ahead
- A muted consumer demand environment given the continued macroeconomic uncertainty
- First-half margin pressure as it continues to sell through its higher-cost inventory
- Year-over-year improvement in second-half margins, particularly the fourth quarter, as lower-cost inventory currently being produced is sold and it anniversaries last year’s manufacturing time-out costs related to its inventory reduction initiative in 2022.
- GAAP loss per share from continuing operations to range from approximately $0.09 to $0.04.
- Fully diluted shares outstanding of approximately 351 million.
Revenue & Expenses
Visualization of income flow from segment revenue to net income