The company raised its full-year adjusted EPS guidance for the third time this year based on quarterly results.

“Our business continues to perform very well, particularly in an uncertain consumer environment,” said Richard A. Noll, Hanes Chairman and Chief Executive Officer. “We have delivered more earnings in the first three quarters of 2014 than we did all of last year. Our Innovate-to-Elevate strategy, global self-owned supply chain, and acquisitions continue to generate shareholder value and give us confidence in our potential for many years to come.”

Key accomplishments

For the third quarter ended on 27 September 2014, net sales increased by 17% to US 1.40 billion, adjusted operating profit excluding actions increased by 23% to US 217 million, and adjusted diluted EPS excluding actions increased by 41% to US 1.73.

The company completed the integration of Maidenform within one year of the acquisition closing. The company remains on schedule for capturing synergies from the acquisition and integration, including ramp up of internalized production of select Maidenform intimate apparel styles in Hanes’ self-owned supply chain.

Hanes also closed on the acquisition of DBApparel, a leading marketer of intimate apparel and underwear in Europe, from Sun Capital Partners, this summer. Hanes has begun cross-company integration planning for DBA and expects to create significant synergies by applying Hanes’ Innovate-to-Elevate strategy in Europe.

Innerwear Segment

Innerwear net sales increased by 16% in the third quarter, as a result of the Maidenform acquisition, while the company’s base business was up slightly compared with the last year. Operating profit increased by 29% on acquisition benefits.

Sales in the quarter were affected by a continued uneven and challenging retail environment. Sales growth of at least mid-single digits in socks, boys’ underwear, and panties were offset by softness in other Innerwear categories.

Innovation platforms, including ComfortBlend and X-Temp underwear and Flexible Fit bras, continued to outperform their respective categories.

Activewear Segment

Activewear sales increased by 5%, while operating profit declined by 1% versus a strong third quarter last year.

The segment’s operating profit margin was 16.1% in the third quarter, and the year-to-date operating margin of 14.1% is 95 basis points better than a year ago. Retail Activewear sales increased by 1%, while Gear for Sports sales increased by double digits.

International Segment

The acquisitions of Maidenform and DBApparel contributed to International sales growth of 63% and operating profit growth of 74% in the third quarter. On a constant-currency basis, base International net sales decreased by 3% in the quarter and operating profit decreased by 1%.

Net sales for the Direct to Consumer segment increased by 13%, and operating profit increased by 6% in the third quarter.

Guidance for 2014

Based on third-quarter results, Hanes has increased its 2014 outlook for full-year adjusted EPS and other financial measures. The company’s previous guidance for the 53-week year was updated in September 2014, at the time the DBApparel acquisition completion was announced.

Hanes’ guidance range for net sales remains approximately US 5.350 billion to US 5.375 billion. The company has increased guidance for adjusted operating profit to a range of US 750 million to US 770 million, up from the previous guidance range of US 735 million to US 755 million.

www.hanes.com