Net sales increased by 8% to US 5.73 billion for the year ended on 2 January 2016, while 2015 core sales in constant currency were essentially flat to the prior year. Fourth-quarter net sales decreased by 7%, while core sales in constant currency decreased by 5%.

Adjusted operating profit excluding actions for the year increased by 13% to US 861 million and grew by 6% in the fourth quarter. Adjusted EPS excluding actions for the year increased by 17% to US 1.66 and increased 22% in the fourth quarter to US 0.44.

Growth expectations

For 2016, Hanes expects another year of double-digit earnings growth. Guidance for adjusted EPS is US 1.85 to US 1.91, or expected growth of 11% to 15%. Net sales are expected to be US 5.8 billion to US 5.9 billion, up 1% to 3%, and expectations for adjusted operating profit of US 920 million to US 950 million would be an increase of 7% to 10%.

“We delivered our third consecutive record year in 2015, although we are disappointed with our fourth-quarter performance,” commented Hanes Chairman and CEO Richard A. Noll. “For 2016, I feel confident in our growth expectations and outlook for a fourth consecutive year with a double-digit increase in adjusted EPS.”

Acquisitions

Acquisition benefits, margin expansion and cost control contributed to record net sales, adjusted operating profit and adjusted EPS for the year, despite lower-than-expected fourth-quarter performance, the company reports.

The company continued to reap synergy benefits in 2015 from its 2013 Maidenform acquisition, while the integrations of the company’s 2014 acquisition of DBApparel (Hanes Europe Innerwear) and 2015 acquisition of licensed apparel leader Knights Apparel are underway.

Core sales

Core sales in constant currency for 2015 were comparable to 2014 levels, with Innerwear core sales down 1% and Activewear core sales down by 1%.

For the fourth quarter, net sales and core sales for both Innerwear and Activewear decreased as domestic retail traffic declined significantly as historic warm weather enveloped the eastern two-thirds of the US in November and December. Innerwear core sales in the fourth quarter decreased by 2%, while Activewear core sales in the quarter decreased by 12%.

Margin growth

In addition to adjusted operating profit growth, adjusted operating profit margins increased by 180 basis points in the fourth quarter and by 70 basis points to 15% of sales for the full year. On a GAAP basis, operating profit margin for 2015 was 10.4%.

Financial guidance

The company’s financial guidance for full-year 2016 would result in a fourth consecutive year of record net sales, adjusted operating profit and adjusted EPS. The company also expects a record year of cash flow in the range of US 750 million to US 850 million of net cash from operating activities.

The company’s expectations for 2016 net sales of US 5.8 billion to US 5.9 billion represents growth of approximately 1% to 3%. Expected adjusted operating profit of US 920 million to US 950 million represents growth of 7% to 10%.

Profit is expected to benefit from continued synergies from acquisitions, supply chain internalization, and SG&A leverage.

www.hanes.com