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Dec 31, 2022
Hanesbrands Q4 2022 Earnings Report
Hanesbrands reported fourth-quarter results at or above its guidance, taking actions to navigate the challenging environment and shifting capital allocation strategy to reduce debt. The company is focused on improving cash flow and margins, remaining confident in its Full Potential plan and long-term financial targets.
Key Takeaways
HanesBrands Inc. announced its fourth-quarter 2022 results, with net sales of $1.47 billion, GAAP EPS loss from continuing operations of $1.19, and adjusted EPS from continuing operations of $0.07. The company is shifting its capital allocation strategy to focus on debt reduction and expects to refinance its 2024 maturities in the first quarter of 2023.
Net sales from continuing operations decreased 16% to $1.47 billion.
GAAP EPS loss from continuing operations was $1.19, while adjusted EPS from continuing operations was $0.07.
The company is shifting its capital allocation strategy to focus on debt reduction by eliminating the dividend.
HanesBrands expects to generate approximately $500 million in operating cash flow in 2023 and exit the year with higher gross and operating margin run rates.
Hanesbrands
Hanesbrands
Hanesbrands Revenue by Geographic Location
Revenue by Geographic Location
International Revenue
CapyFin.com Forward Guidance
For fiscal-year 2023, HanesBrands expects net sales from continuing operations of approximately $6.05 billion to $6.20 billion, GAAP operating profit from continuing operations to range from approximately $446 million to $496 million, and adjusted earnings per share from continuing operations to range from approximately $0.31 to $0.42.
Positive Outlook
- The Company expects year-over-year improvement in gross and operating margin in the second half of 2023, particularly the fourth quarter, as lower-cost inventory currently being produced is sold.
- Expects to generate approximately $500 million in operating cash flow in 2023.
- The company's outlook assumes completion of the expected refinancing of indebtedness with 2024 maturities.
- The company anticipates exiting the year with higher gross and operating margin run rates.
- The company expects to generate cash flow from operations of approximately $500 million.
Challenges Ahead
- The Company’s outlook reflects a muted consumer demand environment given the continued macroeconomic uncertainty.
- First-half margin pressure is expected as it sells through the remainder of its higher-cost inventory.
- The accounting treatment for deferred tax assets will increase accounting tax expense and the effective tax rate in 2023.
- Net sales from continuing operations of approximately $6.05 billion to $6.20 billion, which includes a projected headwind of approximately $42 million from changes in foreign currency exchange rates.
- Adjusted interest and other expenses of approximately $300 million.