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Jun 27, 2020
Hanesbrands Q2 2020 Earnings Report
Reported double-digit growth in diluted earnings per share despite market disruption from the COVID-19 pandemic.
Key Takeaways
Hanesbrands reported second-quarter results with double-digit growth in diluted earnings per share despite market disruption from the COVID-19 pandemic. The earnings growth resulted from the company’s ability to pivot to production and sales of personal protective garments combined with relatively strong apparel performance in pandemic conditions, including 68% sales growth in the online channel.
2Q GAAP EPS increased 12% to $0.46; Adjusted EPS increased 58% to $0.60
2Q net sales of $1.74 billion driven by better-than-base-case-scenario apparel sales, including increasing point-of-sale trends and market-share gains, and better-than-expected new personal protective garments business
2Q net cash from operations of $65 million; year-to-date operating cash flow $40 million better than a year ago
Quarter-end liquidity of approximately $1.8 billion provides continued balance sheet strength and operational flexibility
Revenue by Geographic Location
Forward Guidance
Due to the continued uncertainty and unpredictability of the COVID-19 pandemic, HanesBrands will not provide quarterly and full-year performance guidance until visibility of the pandemic’s effect on global economies improves.
Positive Outlook
- The decline in apparel sales in the second quarter was better than the company’s base-case scenario.
- Absent a slowdown of store reopenings or recurrence of store closures, the company anticipates sequential improvement of sales declines in the third and fourth quarters.
- U.S. Innerwear sales on the strength of basics could return to rebased year-ago levels by the end of the year.
- Excluding the potential for additional government contracts, the company estimates that it could sell more than $150 million of protective garments in the second half of 2020, primarily in the third quarter.
- The company expects to generate positive cash flow in the second half.
Challenges Ahead
- Due to the continued uncertainty and unpredictability of the COVID-19 pandemic, HanesBrands will not provide quarterly and full-year performance guidance until visibility of the pandemic’s effect on global economies improves.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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