Revenue, operating profit, operating margin and EPS from continuing operations exceed
guidance
•Net sales from continuing operations of $1.75 billion, up 13% over prior year; up 15% over second-quarter 2019
•GAAP EPS from continuing operations of $0.42; adjusted EPS from continuing operations of $0.47
•Growth driven by global Champion brand and U.S. Innerwear
•Global Champion sales up more than 120% over prior year and 21% over second-quarter 2019
•Raises second-half and full-year 2021 guidance for net sales, operating profit, and EPS from continuing operations
•Issues third-quarter 2021 guidance, including net sales from continuing operations of $1.78 billion to $1.81 billion, GAAP EPS from continuing operations of $0.42 to $0.45 and Adjusted EPS from continuing operations of $0.45 to $0.48
•For reconciliations of select GAAP and Non-GAAP measures, see Table 6 of this release
WINSTON-SALEM, N.C. (Aug. 5, 2021) – HanesBrands Inc. (NYSE: HBI), a global leader in iconic apparel brands, today announced results for the second quarter of 2021, with increased sales, operating profit and cash flow driven by strong performance across its global innerwear and activewear businesses.
Net sales from continuing operations for the second quarter ended July 3, 2021, totaled $1.75 billion, an increase of $208 million, or 13%, compared with $1.54 billion for the quarter ended June 27, 2020, which included $614 million in sales of personal protective equipment (“PPE”) in response to the COVID-19 pandemic. Excluding PPE, net sales increased 88% over prior year. The growth was driven by strong point-of-sales trends, the overlap of last year’s COVID-related shutdowns and the benefit of transitory items such as government stimulus. Total constant currency second-quarter net sales increased 10%.
“Our iconic brands continue to resonate with consumers around the world, and I’m very encouraged by the progress on our Full Potential growth plan,” said Chief Executive Officer Steve Bratspies. “I’m extremely proud of the way our associates performed under challenging conditions, delivering sales, profit and earnings growth above our expectations and above the second quarter of both 2020 and 2019. We are seeing strong momentum across our business and have raised our outlook for the second half of the year.”
Due to the significant impact of the pandemic on prior year results, this release includes certain comparisons to the comparable 2019 periods for additional context. All 2019 results are rebased to reflect the European Innerwear business as discontinued operations as well as the exit of the C9 Champion mass program and the DKNY intimate apparel license.
Compared to second-quarter 2019, net sales from continuing operations increased $233 million, or 15%, and total constant currency net sales increased 14%. Double-digit growth in the global innerwear and activewear businesses was driven by strong point-of-sale performance as well as the benefit of several transitory items, including retailer inventory restocking, government stimulus and pent-up consumer demand.
For the second-quarter 2021, GAAP gross margin of 38.9% increased 560 basis points compared to prior year and 200 basis points compared to second-quarter 2019. Adjusted gross margin of 39.0% increased 450 basis points over last year and approximately 75 basis points over 2019. The expansion in both periods was driven by higher sales, product mix and the impact from foreign exchange rates, which more than offset higher expedite costs that resulted from stronger-than-expected demand.
Second-quarter GAAP operating profit increased 8% to $217 million compared to prior year and decreased 1% compared to second-quarter 2019. GAAP operating margin of 12.4% decreased 70 basis points and 100 basis points compared to the second quarter of 2020 and 2019, respectively. Adjusted operating profit of $236 million increased $2 million, or 1%, compared to prior year and $29 million, or 14% compared to 2019. Adjusted operating margin of 13.5% decreased 170 basis points compared to last year due to the overlap of last year’s PPE sales and temporary cost savings initiatives that were implemented to partially mitigate the impact of COVID-driven declines in apparel sales.
In the second quarter of 2020, the company implemented several temporary SG&A cost savings initiatives such as furloughs and salary reductions, which generated approximately 600 basis points of one-time operating margin benefit in the year-ago quarter. As compared to second-quarter 2019, adjusted operating margin decreased approximately 15 basis points as higher brand marketing investments essentially offset the fixed-cost leverage from higher sales.
The GAAP and adjusted effective tax rates for the second quarter were 14.6% and 14.2%, respectively, which compares to GAAP and adjusted effective tax rates of 12.7% and 14.1%, respectively, for the second quarter of 2020. For the second quarter of 2019, GAAP and adjusted effective tax rates were 9.4% and 9.0%, respectively.
On a GAAP basis, second-quarter income from continuing operations totaled $148 million, or $0.42 per diluted share. This compares to income from continuing operations of $137 million, or $0.39 per diluted share in the prior year period, and income from continuing operations of $150 million, or $0.41 per diluted share in second-quarter 2019.
Adjusted income from continuing operations totaled $165 million, or $0.47 per diluted share. This compares to adjusted income from continuing operations of $162 million, or $0.46 per diluted share, in the prior year period and adjusted income from continuing operations of $139 million, or $0.38 per diluted share, in second-quarter 2019.
(See the Note on Adjusted Measures and Reconciliation to GAAP Measures later in this news release for additional discussion and details of actions, which include pandemic-related and Full Potential plan charges.)
Second-Quarter 2021 Business Segment Summaries
Innerwear (vs 2020). Sales decreased $314 million, or 29% due to the overlap of last year’s $614 million of PPE sales. Basics revenue increased 48% with double-digit growth in each product category while intimates revenue increased 150% with triple-digit growth in both bras and shapewear. Excluding PPE, Innerwear sales increased 62% over last year driven by strong point-of-sale growth, the overlap of last year’s COVID-related shutdowns as well as the benefit of several transitory items, including retailer inventory restocking, government stimulus and pent-up consumer demand. Operating margin of 23.8% decreased 400 basis points compared to prior year due to fixed-cost deleverage from lower sales, higher expedite costs from stronger-than-expected demand in basics and intimates as well as increased investments in brand marketing.
(vs 2019). Sales increased $123 million, or 19%, compared to second-quarter 2019, with comparable double-digit growth in both basics and intimates. The growth was driven by strong underlying point-of-sale growth, yielding approximately 160 basis points of market share gains, as well as the benefit of certain transitory items, such as retailer inventory restocking and government stimulus, which drove category growth rates above historical levels. Operating margin expanded 150 basis points to 23.8% driven by volume leverage and sales mix, which more than offset higher expedite costs and increased investments in brand marketing.
Activewear (vs 2020). Activewear sales grew $236 million, or 140% over prior year driven by growth in both the Champion and Hanes brands. The company experienced strong point-of-sale trends across several channels in the quarter. Sales also increased in the sports and college licensing business. The segment benefited from strong pent-up consumer demand as pandemic restrictions were lifted, as well as from government stimulus payments. Segment operating margin of 10.2% increased 1,360 basis points over prior period driven by fixed-cost leverage from higher sales, which more than offset higher brand marketing investment.
(vs 2019). Activewear revenue increased $53 million, or 15%, driven by growth across the online, wholesale and distributor channels, which more than offset lower sales in the sports and college licensing business. By brand, sales increased in both the Champion and Hanes brands in the quarter, with Champion sales in the segment up 20%. Activewear’s operating margin decreased approximately 290 basis points compared to second-quarter 2019 as leverage from higher sales volume was more than offset by higher expedite and distribution costs due to stronger-than-expected demand as well as increased investments in brand marketing.
International (vs 2020). International segment revenue increased $228 million, or 91%, compared to prior year. On a constant currency basis, sales increased 70% with strong growth in Australia, the Americas, Europe and Asia Pacific driven by strong consumer demand and the overlap of last year’s COVID-related shutdowns. For the quarter, the International segment’s operating margin of 12.9% increased 1,090 basis points over prior year driven by higher sales, sales mix and foreign exchange rates.
(vs 2019). International segment revenue increased $48 million, or 11%, compared to second-quarter 2019. On a constant currency basis, sales increased 5%. Constant currency sales grew in Australia, Europe and the Americas while sales in Asia Pacific declined driven by ongoing COVID-related headwinds in Japan. For the quarter, the International segment’s operating margin decreased 250 basis points compared to second-quarter 2019 levels driven by increased brand marketing investments as well as de-leverage in Asia Pacific from lower sales.
Third-Quarter, Fourth-Quarter and Full-Year 2021 Financial Outlook
The following financial outlook is based on current market conditions and judgments of management and is subject to risks and uncertainties that may cause actual results to differ materially, many of which are further discussed in the company’s most recent annual report on Form 10-K available at www.sec.gov and in the investors section of the company’s website at www.Hanes.com/Investors.
For third-quarter 2021, which ends on October 2, 2021, the company currently expects:
•Net sales from continuing operations of approximately $1.78 billion to $1.81 billion, which represents approximately 6% growth over prior year at the midpoint and includes a projected benefit of approximately $16 million from changes in foreign currency exchange rates. This compares to net sales of $1.69 billion in third-quarter 2020, which included $179 million in PPE sales.
•Excluding PPE, net sales at the midpoint of the guidance range are expected to increase 19% over the prior year period.
•As compared to rebased third-quarter 2019, net sales at the midpoint are expected to increase 11%.
•GAAP operating profit from continuing operations to range from approximately $216 million to $226 million.
•Adjusted operating profit from continuing operations to range from approximately $235 million to $245 million. The midpoint of adjusted operating profit implies an operating margin of approximately 13.4% and reflects the impact of cost inflation as well as increased brand investment. This compares to an adjusted operating margin of 14.3% in the third-quarter of 2020, which benefited from temporary COVID-driven cost reductions.
•Charges for actions related to Full Potential of approximately $19 million.
•Interest and Other expenses of approximately $45 million.
•An effective tax rate of approximately 12% on a GAAP basis and approximately 15% on an adjusted basis.
•GAAP earnings per share from continuing operations to range from $0.42 to $0.45. Adjusted earnings per share from continuing operations to range from $0.45 to $0.48.
For fourth-quarter 2021, which ends on January 1, 2022, the company currently expects:
•Net sales from continuing operations of approximately $1.71 billion to $1.78 billion, which represents approximately 3% growth over prior year at the midpoint and includes a projected benefit of approximately $6 million from changes in foreign currency exchange rates. This compares to net sales of $1.69 billion in fourth-quarter 2020, which included $28 million in PPE sales and approximately $45 million from the 53rd week.
•Adjusting for PPE and the 53rd week in 2020, net sales at the midpoint of the guidance range are expected to increase 8% over the prior year period.
•As compared to rebased fourth-quarter 2019, net sales at the midpoint are expected to increase 15%.
•GAAP operating profit from continuing operations to range from approximately $172 million to $192 million.
•Adjusted operating profit from continuing operations to range from approximately $200 million to $220 million. The midpoint of adjusted operating profit implies an operating margin of approximately 12.0% and reflects the impact of cost inflation as well as increased brand investment. This compares to an adjusted operating margin of 13.5% in the fourth-quarter of 2020.
•Charges for actions related to Full Potential of approximately $28 million.
•Interest and Other expenses of approximately $46 million.
•An effective tax rate of approximately 15% on a GAAP and adjusted basis.
•GAAP earnings per share from continuing operations to range from $0.29 to $0.34. Adjusted earnings per share from continuing operations to range from $0.37 to $0.42.
For fiscal-year 2021, which ends on January 1, 2022, the company currently expects:
•Net sales from continuing operations to total approximately $6.75 billion to $6.85 billion, which is $550 million above its prior range of $6.2 billion to $6.3 billion, and includes a projected benefit of approximately $116 million from changes in foreign currency exchange rates.
•At the midpoint, net sales guidance implies approximately 11% growth over prior year and 12% growth adjusted for the 53rd week in 2020. This compares to net sales of $6.13 billion in 2020, which included $820 million in sales of PPE and approximately $45 million from the 53rd week.
•Adjusting for PPE and the 53rd week in 2020, net sales at the midpoint of the guidance range are expected to increase 29% over the prior year period.
•As compared to rebased 2019, net sales at the midpoint are expected to increase 13%.
•GAAP operating profit from continuing operations to range from approximately $795 million to $825 million, versus the prior range of $730 million to $760 million.
•Adjusted operating profit from continuing operations to range from approximately $880 million to $910 million, which is $65 million above its prior range of $815 million to $845 million. At the midpoint, adjusted operating profit guidance implies approximately 15% growth compared to prior year and 9% growth compared to 2019. The midpoint of adjusted operating profit guidance range suggests an operating margin of 13.2%.
•Full-year outlook reflects higher levels of cost inflation as compared to 2020 and 2019. Incremental brand marketing investment of $50 million as compared to 2020.
•Charges for actions related to Full Potential of approximately $85 million, which is unchanged from its prior outlook.
•Interest and Other expenses of approximately $182 million.
•An effective tax rate of approximately 13% on a GAAP basis and approximately 15% on an adjusted basis.
•GAAP earnings per share from continuing operations to range from approximately $1.50 to $1.58.
•Adjusted earnings per share from continuing operations to range from approximately $1.68 to $1.76, which compares to its prior outlook of $1.51 to $1.59.
•Cash flow from operations of approximately $550 million, versus prior range of $500 million to $550 million.
•Capital expenditures of approximately $100 million
HanesBrands has updated its quarterly frequently-asked-questions document, which is available at www.Hanes.com/FAQ.
Note on Adjusted Measures and Reconciliation to GAAP Measures
To supplement financial results prepared in accordance with generally accepted accounting principles, the company provides quarterly and full-year results concerning certain non‐GAAP financial measures, including adjusted EPS from continuing operations, adjusted income from continuing operations, adjusted income tax expense, adjusted income from continuing operations before income tax expense, adjusted operating profit (and margin), adjusted SG&A, adjusted gross profit (and margin), EBITDA and adjusted EBITDA.
Adjusted EPS from continuing operations is defined as diluted EPS from continuing operations excluding actions and the tax effect on actions. Adjusted income from continuing operations is defined as income from continuing operations excluding actions and the tax effect on actions. Adjusted income tax expense is defined as income tax expense excluding actions. Adjusted income from continuing operations before income tax is defined as income from continuing operations before income tax excluding actions. Adjusted operating profit is defined as operating profit excluding actions. Adjusted SG&A is defined as selling, general and administrative expenses excluding actions. Adjusted gross profit is defined as gross profit excluding actions.
Charges for actions taken in 2021 include professional fees and intangible asset impairment charges related to our Full Potential plan. While these costs are not operational in nature and are not expected to continue for any singular transaction on an ongoing basis, similar types of costs, expenses and charges have occurred in prior periods and may recur in future periods depending upon future business plans and circumstances.
Charges for actions taken in 2020 include supply chain restructuring actions, program exit costs, COVID-19 related charges, Full Potential plan charges and the write-off of a discrete tax asset related to our Bras N Things acquisition. COVID-19 related charges include intangible asset and goodwill impairment charges, bad debt expense and supply chain re-startup costs. Full Potential plan charges for 2020 include inventory write-down charges related to our SKU reduction initiative and discontinuation of our PPE business.
Charges for actions taken in 2019 primarily represented supply chain network changes, program exit costs, and overhead reduction as well as completion of outstanding acquisition integration.
HanesBrands has chosen to present these non‐GAAP measures to investors to enable additional analyses of past, present and future operating performance and as a supplemental means of evaluating operations absent the effect of the Full Potential plan and other actions, as well as the COVID-19 pandemic. HanesBrands believes these non-GAAP measures provide management and investors with valuable supplemental information for analyzing the operating performance of the company’s ongoing business during each period presented without giving effect to costs associated with the execution of any of the aforementioned actions taken.
The company has also chosen to present EBITDA and adjusted EBITDA to investors because it considers these measures to be an important supplemental means of evaluating operating performance. EBITDA is defined as income from continuing operations before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA excluding actions and stock compensation expense. HanesBrands believes that EBITDA and adjusted EBITDA are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the industry, and management uses EBITDA and adjusted EBITDA for planning purposes in connection with setting its capital allocation strategy. EBITDA and adjusted EBITDA should not, however, be considered as measures of discretionary cash available to invest in the growth of the business.
In addition, the company has chosen to present certain year-over-year comparisons with respect to the company’s rebased 2019 business, which excludes the exited C9 Champion program and DKNY license. HanesBrands believes this information is useful to management and investors to facilitate a more meaningful comparison of the results of the company’s ongoing business.
HanesBrands is a global company that reports financial information in U.S. dollars in accordance with GAAP. As a supplement to the company’s reported operating results, HanesBrands also presents constant-currency financial information, which is a non-GAAP financial measure that excludes the impact of translating foreign currencies into U.S. dollars. The company uses constant-currency information to provide a framework to assess how the business performed excluding the effects of changes in the rates used to calculate foreign currency translation.
To calculate foreign currency translation on a constant currency basis, operating results for the current-year period for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the average exchange rates in effect during the comparable period of the prior year (rather than the actual exchange rates in effect during the current year period).
HanesBrands believes constant-currency information is useful to management and investors to facilitate comparison of operating results and better identify trends in the company’s businesses.
Non‐GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as an alternative to, or substitute for, financial results prepared in accordance with GAAP. Further, the non-GAAP measures presented may be different from non-GAAP measures with similar or identical names presented by other companies.
Reconciliations of these non-GAAP measures to the most directly comparable GAAP financial measures are presented in the supplemental financial information included with this news release.
This press release contains certain forward-looking statements, as defined under U.S. federal securities laws, with respect to our long-term goals and trends associated with our business, as well as guidance as to future performance. In particular, among others, statements regarding the potential impact of the COVID-19 pandemic on our business and financial performance; guidance and predictions regarding expected operating results, including related to our Full Potential plan; and statements made in the Third Quarter and Full-year 2021 Financial Outlook section of this news release, are forward-looking statements. These forward-looking statements are based on our current intent, beliefs, plans and expectations. Readers are cautioned not to place any undue reliance on any forward-looking statements. Forward-looking statements necessarily involve risks and uncertainties, many of which are outside of our control, that could cause actual results to differ materially from such statements and from our historical results and experience. These risks and uncertainties include such things as: our ability to successfully executive our Full Potential plan to achieve the desired results; the potential effects of the COVID-19 pandemic, including on consumer spending, global supply chains and the financial markets; the highly competitive and evolving nature of the industry in which we compete; the rapidly changing retail environment; our reliance on a relatively small number of customers for a significant portion of our sales; any inadequacy, interruption, integration failure or security failure with respect to our information technology; the impact of significant fluctuations and volatility in various input costs, such as cotton and oil-related materials, utilities, freight and wages; our ability to attract and retain a senior management team with the core competencies needed to support growth in global markets; significant fluctuations in foreign exchange rates; legal, regulatory, political and economic risks related to our international operations; our ability to effectively manage our complex multinational tax structure; and other risks identified from time to time in our most recent Securities and Exchange Commission reports, including our annual report on Form 10-K and quarterly reports on Form 10-Q. Since it is not possible to predict or identify all of the risks, uncertainties and other factors that may affect future results, the above list should not be considered a complete list. Any forward- looking statement speaks only as of the date on which such statement is made, and HanesBrands undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, other than as required by law.
HanesBrands
HanesBrands (NYSE: HBI) makes everyday apparel that is known and loved by consumers around the world for comfort, quality and value. Among the company’s iconic brands are Hanes, the leading basic apparel brand in the United States; Champion, an innovator at the intersection of lifestyle and athletic apparel; and Bonds, which is setting new standards for design and sustainability. HBI employs 61,000 associates in 47 countries and has built a strong reputation for workplace quality and ethical business practices. The company, a longtime leader in sustainability, launched aggressive 2030 goals to improve the lives of people, protect the planet and produce sustainable products. HBI is building on its unmatched strengths to unlock its #FullPotential and deliver long-term growth that benefits all of its stakeholders.
# # #
TABLE 1
HANESBRANDS INC.
Condensed Consolidated Statements of Income
(in thousands, except per share data)
(Unaudited)
Quarters Ended
Six Months Ended
July 3, 2021
June 27, 2020
% Change
July 3, 2021
June 27, 2020
% Change
Net sales
$
1,751,311
$
1,543,083
13.5
%
$
3,259,340
$
2,746,153
18.7
%
Cost of sales
1,069,682
1,029,221
1,975,030
1,814,123
Gross profit
681,629
513,862
32.6
%
1,284,310
932,030
37.8
%
As a % of net sales
38.9
%
33.3
%
39.4
%
33.9
%
Selling, general and administrative expenses
464,235
311,729
876,794
681,944
As a % of net sales
26.5
%
20.2
%
26.9
%
24.8
%
Operating profit
217,394
202,133
7.5
%
407,516
250,086
63.0
%
As a % of net sales
12.4
%
13.1
%
12.5
%
9.1
%
Other expenses
1,855
4,653
4,416
10,754
Interest expense, net
42,440
41,075
86,900
77,102
Income from continuing operations before income tax expense
173,099
156,405
316,200
162,230
Income tax expense
25,236
19,837
39,933
20,544
Income from continuing operations
147,863
136,568
8.3
%
276,267
141,686
95.0
%
Income (loss) from discontinued operations, net of tax
(19,187)
24,613
(410,853)
11,621
Net income (loss)
$
128,676
$
161,181
$
(134,586)
$
153,307
Earnings (loss) per share - basic:
Continuing operations
$
0.42
$
0.39
$
0.79
$
0.40
Discontinued operations
(0.05)
0.07
(1.17)
0.03
Net income (loss)
$
0.37
$
0.46
$
(0.38)
$
0.43
Earnings (loss) per share - diluted:
Continuing operations
$
0.42
$
0.39
$
0.79
$
0.40
Discontinued operations
(0.05)
0.07
(1.17)
0.03
Net income (loss)
$
0.37
$
0.46
$
(0.38)
$
0.43
Weighted average shares outstanding:
Basic
350,987
350,538
350,995
354,778
Diluted
352,052
350,829
351,869
355,133
TABLE 2-A
HANESBRANDS INC.
Supplemental Financial Information
Impact of Foreign Currency
(in thousands, except per share data)
(Unaudited)
Quarter Ended July 3, 2021
As Reported
Impact from Foreign Currency1
Constant Currency
Quarter Ended June 27, 2020
% Change, As Reported
% Change, Constant Currency
As reported under GAAP:
Net sales
$
1,751,311
$
50,698
$
1,700,613
$
1,543,083
13.5
%
10.2
%
Gross profit
681,629
27,233
654,396
513,862
32.6
27.3
Operating profit
217,394
8,419
208,975
202,133
7.5
3.4
Diluted earnings per share from continuing operations
$
0.42
$
0.02
$
0.40
$
0.39
7.7
%
2.6
%
As adjusted:2
Net sales
$
1,751,311
$
50,698
$
1,700,613
$
1,543,083
13.5
%
10.2
%
Gross profit
683,529
27,233
656,296
532,280
28.4
23.3
Operating profit
236,058
8,419
227,639
234,412
0.7
(2.9)
Diluted earnings per share from continuing operations
$
0.47
$
0.02
$
0.45
$
0.46
2.2
%
(2.2)
%
Six Months Ended July 3, 2021
As Reported
Impact from Foreign Currency1
Constant Currency
Six Months Ended June 27, 2020
% Change, As Reported
% Change, Constant Currency
As reported under GAAP:
Net sales
$
3,259,340
$
93,771
$
3,165,569
$
2,746,153
18.7
%
15.3
%
Gross profit
1,284,310
51,415
1,232,895
932,030
37.8
32.3
Operating profit
407,516
15,952
391,564
250,086
63.0
56.6
Diluted earnings per share from continuing operations
$
0.79
$
0.04
$
0.75
$
0.40
97.5
%
87.5
%
As adjusted:2
Net sales
$
3,259,340
$
93,771
$
3,165,569
$
2,746,153
18.7
%
15.3
%
Gross profit
1,289,017
51,415
1,237,602
972,259
32.6
27.3
Operating profit
445,573
15,952
429,621
306,689
45.3
40.1
Diluted earnings per share from continuing operations
$
0.86
$
0.04
$
0.82
$
0.53
62.3
%
54.7
%
1
Effect of the change in foreign currency exchange rates year-over-year. Calculated by applying prior period exchange rates to the current year financial results.
2
Results for the quarters and six months ended July 3, 2021 and June 27, 2020 reflect adjustments for restructuring and other action-related charges. See "Reconciliation of Select GAAP Measures to Non-GAAP Measures" in Tables 6-A through 6-E.
TABLE 2-B
HANESBRANDS INC.
Supplemental Financial Information
Impact of Foreign Currency
(in thousands, except per share data)
(Unaudited)
Quarter Ended July 3, 2021
As Reported
Impact from Foreign Currency1
Constant Currency
Quarter Ended June 29, 2019
% Change, As Reported
% Change, Constant Currency
As reported under GAAP:
Net sales
$
1,751,311
$
26,303
$
1,725,008
$
1,636,709
7.0
%
5.4
%
Gross profit
681,629
14,457
667,172
604,182
12.8
10.4
Operating profit
217,394
4,152
213,242
219,893
(1.1)
(3.0)
Diluted earnings per share from continuing operations
$
0.42
$
0.01
$
0.41
$
0.41
2.4
%
—
%
As adjusted:2
Net sales
$
1,751,311
$
26,303
$
1,725,008
$
1,517,999
15.4
%
13.6
%
Gross profit
683,529
14,457
669,072
581,442
17.6
15.1
Operating profit
236,058
4,152
231,906
206,865
14.1
12.1
Diluted earnings per share from continuing operations
$
0.47
$
0.01
$
0.46
$
0.38
23.7
%
21.1
%
Six Months Ended July 3, 2021
As Reported
Impact from Foreign Currency1
Constant Currency
Six Months Ended June 29, 2019
% Change, As Reported
% Change, Constant Currency
As reported under GAAP:
Net sales
$
3,259,340
$
48,833
$
3,210,507
$
3,086,396
5.6
%
4.0
%
Gross profit
1,284,310
27,290
1,257,020
1,149,104
11.8
9.4
Operating profit
407,516
8,587
398,929
359,501
13.4
11.0
Diluted earnings per share from continuing operations
$
0.79
$
0.02
$
0.76
$
0.62
27.4
%
22.6
%
As adjusted:2
Net sales
$
3,259,340
$
48,833
$
3,210,507
$
2,873,582
13.4
%
11.7
%
Gross profit
1,289,017
27,290
1,261,727
1,113,949
15.7
13.3
Operating profit
445,573
8,587
436,986
346,726
28.5
26.0
Diluted earnings per share from continuing operations
$
0.86
$
0.02
$
0.84
$
0.59
45.8
%
42.4
%
1
Effect of the change in foreign currency exchange rates year-over-year. Calculated by applying prior period exchange rates to the current year financial results.
2
Results for the quarters and six months ended July 3, 2021 and June 29, 2019 reflect adjustments for restructuring and other action-related charges. Results for the quarter and six months ended June 29, 2019 also reflect adjustments for the exited C9 Champion mass program and DKNY intimate apparel license. See "Reconciliation of Select GAAP Measures to Non-GAAP Measures" in Tables 6-A through 6-E.
TABLE 3-A
HANESBRANDS INC.
Supplemental Financial Information
By Business Segment
(in thousands)
(Unaudited)
Quarters Ended
Six Months Ended
July 3, 2021
June 27, 2020
% Change
July 3, 2021
June 27, 2020
% Change
Segment net sales:
Innerwear1
$
780,650
$
1,094,814
(28.7)
%
$
1,351,085
$
1,517,216
(10.9)
%
Activewear
404,189
168,379
140.0
768,192
456,379
68.3
International
478,923
251,285
90.6
985,184
679,515
45.0
Other
87,549
28,605
206.1
154,879
93,043
66.5
Total net sales
$
1,751,311
$
1,543,083
13.5
%
$
3,259,340
$
2,746,153
18.7
%
Segment operating profit:
Innerwear1
$
186,169
$
304,524
(38.9)
%
$
313,586
$
386,075
(18.8)
%
Activewear
41,047
(5,751)
NM
101,641
2,357
4,212.3
International
61,900
5,162
1,099.1
149,080
55,907
166.7
Other
9,220
(11,929)
NM
11,106
(15,322)
NM
General corporate expenses/other
(62,278)
(57,594)
8.1
(129,840)
(122,328)
6.1
Total operating profit before restructuring and other action-related charges
236,058
234,412
0.7
445,573
306,689
45.3
Restructuring and other action-related charges
(18,664)
(32,279)
(42.2)
(38,057)
(56,603)
(32.8)
Total operating profit
$
217,394
$
202,133
7.5
%
$
407,516
$
250,086
63.0
%
1
The Innerwear segment includes $614 million of net sales of personal protective equipment in the second quarter and six months of 2020.
Quarters Ended
Six Months Ended
July 3, 2021
June 27, 2020
Basis Points Change
July 3, 2021
June 27, 2020
Basis Points Change
Segment operating margin:
Innerwear
23.8
%
27.8
%
(397)
23.2
%
25.4
%
(220)
Activewear
10.2
(3.4)
1,357
13.2
0.5
1,270
International
12.9
2.1
1,087
15.1
8.2
690
Other
10.5
(41.7)
5,223
7.2
(16.5)
2,370
General corporate expenses/other
(3.6)
(3.7)
18
(4.0)
(4.5)
47
Total operating margin before restructuring and other action-related charges
13.5
15.2
(171)
13.7
11.2
250
Restructuring and other action-related charges
(1.1)
(2.1)
103
(1.2)
(2.1)
89
Total operating margin
12.4
%
13.1
%
(69)
12.5
%
9.1
%
340
TABLE 3-B
HANESBRANDS INC.
Supplemental Financial Information
By Business Segment
(in thousands)
(Unaudited)
Quarters Ended
Six Months Ended
July 3, 2021
June 29, 2019 Rebased1
% Change
July 3, 2021
June 29, 2019 Rebased1
% Change
Segment net sales:
Innerwear
$
780,650
$
657,477
18.7
%
$
1,351,085
$
1,123,891
20.2
%
Activewear
404,189
350,694
15.3
768,192
671,461
14.4
International
478,923
430,819
11.2
985,184
921,648
6.9
Other
87,549
79,009
10.8
154,879
156,582
(1.1)
Total net sales
$
1,751,311
$
1,517,999
15.4
%
$
3,259,340
$
2,873,582
13.4
%
Segment operating profit:
Innerwear
$
186,169
$
146,997
26.6
%
$
313,586
$
250,123
25.4
%
Activewear
41,047
45,855
(10.5)
101,641
70,025
45.1
International
61,900
66,490
(6.9)
149,080
151,266
(1.4)
Other
9,220
7,994
15.3
11,106
10,429
6.5
General corporate expenses/other
(62,278)
(60,471)
3.0
(129,840)
(135,117)
(3.9)
Total operating profit before restructuring and other action-related charges
236,058
206,865
14.1
445,573
346,726
28.5
Restructuring and other action-related charges
(18,664)
(12,429)
50.2
(38,057)
(33,605)
13.2
Total operating profit
$
217,394
$
194,436
11.8
%
$
407,516
$
313,121
30.1
%
Quarters Ended
Six Months Ended
July 3, 2021
June 29, 2019 Rebased1
Basis Points Change
July 3, 2021
June 29, 2019 Rebased1
Basis Points Change
Segment operating margin:
Innerwear
23.8
%
22.4
%
149
23.2
%
22.3
%
94
Activewear
10.2
13.1
(292)
13.2
10.4
277
International
12.9
15.4
(251)
15.1
16.4
(131)
Other
10.5
10.1
41
7.2
6.7
54
General corporate expenses/other
(3.6)
(4.0)
43
(4.0)
(4.7)
72
Total operating margin before restructuring and other action-related charges
13.5
13.6
(15)
13.7
12.1
160
Restructuring and other action-related charges
(1.1)
(0.8)
(25)
(1.2)
(1.2)
—
Total operating margin
12.4
%
12.8
%
(40)
12.5
%
10.9
%
160
1
Results for the quarter and six months ended June 29, 2019 reflect adjustments for the exited C9 Champion mass program and DKNY intimate apparel license. See “Reconciliation of Select GAAP Measures to Non-GAAP Measures” in Tables 6-A through 6-E.
TABLE 4
HANESBRANDS INC.
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
July 3, 2021
January 2, 2021
June 27, 2020
Assets
Cash and cash equivalents
$
667,298
$
900,615
$
556,099
Trade accounts receivable, net
960,993
768,221
1,139,130
Inventories
1,530,622
1,367,758
1,774,139
Other current assets
159,715
158,700
171,435
Current assets of discontinued operations
301,986
234,086
401,347
Total current assets
3,620,614
3,429,380
4,042,150
Property, net
446,356
477,821
496,933
Right-of-use assets
398,526
432,631
438,683
Trademarks and other identifiable intangibles, net
1,258,783
1,293,847
1,196,359
Goodwill
1,148,021
1,158,938
1,144,739
Deferred tax assets
351,309
367,976
193,100
Other noncurrent assets
54,380
64,773
118,296
Noncurrent assets of discontinued operations
—
494,501
493,045
Total assets
$
7,277,989
$
7,719,867
$
8,123,305
Liabilities
Accounts payable
$
1,171,645
$
891,868
$
1,101,438
Accrued liabilities
628,007
609,864
452,763
Lease liabilities
129,053
136,510
147,406
Notes payable
—
—
13
Current portion of long-term debt
37,500
263,936
—
Current liabilities of discontinued operations
289,751
222,183
310,972
Total current liabilities
2,255,956
2,124,361
2,012,592
Long-term debt
3,647,482
3,739,434
3,985,631
Lease liabilities - noncurrent
299,380
331,577
330,599
Pension and postretirement benefits
327,597
381,457
328,647
Other noncurrent liabilities
185,384
216,091
270,152
Noncurrent liabilities of discontinued operations
—
112,989
116,364
Total liabilities
6,715,799
6,905,909
7,043,985
Stockholders’ equity
Preferred stock
—
—
—
Common stock
3,491
3,488
3,481
Additional paid-in capital
310,148
307,883
302,522
Retained earnings
829,479
1,069,546
1,404,326
Accumulated other comprehensive loss
(580,928)
(566,959)
(631,009)
Total stockholders’ equity
562,190
813,958
1,079,320
Total liabilities and stockholders’ equity
$
7,277,989
$
7,719,867
$
8,123,305
TABLE 5
HANESBRANDS INC.
Condensed Consolidated Statements of Cash Flows1
(in thousands)
(Unaudited)
Quarters Ended
Six Months Ended
July 3, 2021
June 27, 2020
July 3, 2021
June 27, 2020
Operating Activities:
Net income (loss)
$
128,676
$
161,181
$
(134,586)
$
153,307
Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation
19,423
22,618
43,565
45,399
Amortization of acquisition intangibles
4,799
6,086
10,978
12,199
Other amortization
2,794
2,630
5,814
5,107
Impairment of intangible assets and goodwill
—
20,319
163,047
20,319
Loss on classification of assets held for sale
9,828
—
236,180
—
Amortization of debt issuance costs
3,089
2,996
7,669
5,119
Other
(8,389)
21,505
(14,224)
16,247
Changes in assets and liabilities:
Accounts receivable
(136,151)
(465,828)
(200,106)
(392,134)
Inventories
(52,368)
25,376
(175,149)
(61,409)
Other assets
(5,155)
(58,360)
4,451
(31,570)
Accounts payable
191,121
223,943
300,318
210,338
Accrued pension and postretirement benefits
(419)
2,163
(39,176)
(19,318)
Accrued liabilities and other
38,062
100,794
3,475
18,603
Net cash from operating activities
195,310
65,423
212,256
(17,793)
Investing Activities:
Capital expenditures
(7,527)
(20,753)
(25,331)
(46,512)
Proceeds from sales of assets
49
—
2,455
66
Other
5,143
4,607
6,937
5,823
Net cash from investing activities
(2,335)
(16,146)
(15,939)
(40,623)
Financing Activities:
Repayments on Term Loan Facilities
(6,250)
—
(306,250)
—
Borrowings on Accounts Receivable Securitization Facility
—
—
—
227,061
Repayments on Accounts Receivable Securitization Facility
—
(152,152)
—
(227,061)
Borrowings on Revolving Loan Facilities
—
—
—
1,638,000
Repayments on Revolving Loan Facilities
—
(950,000)
—
(1,638,000)
Borrowings on Senior Notes
—
700,000
—
700,000
Borrowings on International Debt
—
—
—
31,222
Borrowings on notes payable
21,532
54,357
42,638
116,669
Repayments on notes payable
(22,790)
(48,021)
(43,066)
(112,373)
Share repurchases
—
—
—
(200,269)
Cash dividends paid
(52,368)
(52,213)
(104,719)
(105,896)
Other
378
(14,167)
(2,524)
(14,035)
Net cash from financing activities
(59,498)
(462,196)
(413,921)
415,318
Effect of changes in foreign exchange rates on cash
882
12,392
(16,780)
(2,669)
Change in cash, cash equivalents and restricted cash
134,359
(400,527)
(234,384)
354,233
Cash, cash equivalents and restricted cash at beginning of period
541,860
1,084,683
910,603
329,923
Cash, cash equivalents and restricted cash at end of period
676,219
684,156
676,219
684,156
Less restricted cash at end of period
—
1,042
—
1,042
Cash and cash equivalents at end of period
$
676,219
$
683,114
$
676,219
$
683,114
Balances included in the Condensed Consolidated Balance Sheets:
Cash and cash equivalents
$
667,298
$
556,099
$
667,298
$
556,099
Cash and cash equivalents included in current assets of discontinued operations
8,921
127,015
8,921
127,015
Cash and cash equivalents at end of period
$
676,219
$
683,114
$
676,219
$
683,114
1
The cash flows related to discontinued operations have not been segregated and remain included in the major classes of assets and liabilities. Accordingly, the Condensed Consolidated Statements of Cash Flows include the results of continuing and discontinued operations.
TABLE 6-A
HANESBRANDS INC.
Supplemental Financial Information
Reconciliation of Select GAAP Measures to Non-GAAP Measures
(in thousands, except per share data)
(Unaudited)
Quarter Ended July 3, 2021
Gross Profit
Selling, General and Administrative Expenses
Operating Profit
Income From Continuing Operations Before Income Tax Expense
Income Tax Expense
Income From Continuing Operations
Diluted Earnings Per Share From Continuing Operations1
As reported
$
681,629
$
(464,235)
$
217,394
$
173,099
$
(25,236)
$
147,863
$
0.42
As a percentage of net sales
38.9
%
26.5
%
12.4
%
Restructuring and other action-related charges:
Full Potential Plan:
Professional services
—
13,804
13,804
13,804
—
13,804
0.04
Other
1,900
2,960
4,860
4,860
—
4,860
0.01
Tax effect on actions
—
—
—
—
(1,903)
(1,903)
(0.01)
Total restructuring and other action-related charges
1,900
16,764
18,664
18,664
(1,903)
16,761
0.05
As adjusted
$
683,529
$
(447,471)
$
236,058
$
191,763
$
(27,139)
$
164,624
$
0.47
As a percentage of net sales
39.0
%
25.6
%
13.5
%
Six Months Ended July 3, 2021
Gross Profit
Selling, General and Administrative Expenses
Operating Profit
Income From Continuing Operations Before Income Tax Expense
Income Tax Expense
Income From Continuing Operations
Diluted Earnings Per Share From Continuing Operations1
As reported
$
1,284,310
$
(876,794)
$
407,516
$
316,200
$
(39,933)
$
276,267
$
0.79
As a percentage of net sales
39.4
%
26.9
%
12.5
%
Restructuring and other action-related charges:
Full Potential Plan:
Professional services
—
25,510
25,510
25,510
—
25,510
0.07
Impairment of intangible assets
—
7,302
7,302
7,302
—
7,302
0.02
Other
4,707
538
5,245
5,245
—
5,245
0.01
Discrete tax benefit
—
—
—
—
(7,295)
(7,295)
(0.02)
Tax effect on actions
—
—
—
—
(5,910)
(5,910)
(0.02)
Total restructuring and other action-related charges
4,707
33,350
38,057
38,057
(13,205)
24,852
0.07
As adjusted
$
1,289,017
$
(843,444)
$
445,573
$
354,257
$
(53,138)
$
301,119
$
0.86
As a percentage of net sales
39.5
%
25.9
%
13.7
%
1
Amounts may not be additive due to rounding.
Including the favorable foreign currency impact of $12 million, global Champion sales excluding C9 Champion increased approximately 122% in the second quarter of 2021 compared to the second quarter of 2020. On a constant currency basis, global Champion sales excluding C9 Champion increased approximately 116% in the second quarter of 2021 compared to the second quarter of 2020.
Including the favorable foreign currency impact of $10 million, global Champion sales excluding C9 Champion increased approximately 21% in the second quarter of 2021 compared to the second quarter of 2019. On a constant currency basis, global Champion sales excluding C9 Champion increased approximately 18% in the second quarter of 2021 compared to the second quarter of 2019.
TABLE 6-B
HANESBRANDS INC.
Supplemental Financial Information
Reconciliation of Select GAAP Measures to Non-GAAP Measures
(in thousands, except per share data)
(Unaudited)
Quarter Ended June 27, 2020
Gross Profit
Selling, General and Administrative Expenses
Operating Profit
Income From Continuing Operations Before Income Tax Expense
Income Tax Expense
Income From Continuing Operations
Diluted Earnings Per Share From Continuing Operations1
As reported
$
513,862
$
(311,729)
$
202,133
$
156,405
$
(19,837)
$
136,568
$
0.39
As a percentage of net sales
33.3
%
20.2
%
13.1
%
Restructuring and other action-related charges:
Supply chain actions
2,637
—
2,637
2,637
—
2,637
0.01
Program exit costs
1,285
—
1,285
1,285
—
1,285
0.00
Other
(373)
4,443
4,070
4,070
—
4,070
0.01
COVID-19 related charges:
Bad debt
—
9,418
9,418
9,418
—
9,418
0.03
Inventory
14,869
—
14,869
14,869
—
14,869
0.04
Tax effect on actions
—
—
—
—
(6,695)
(6,695)
(0.02)
Total restructuring and other action-related charges
18,418
13,861
32,279
32,279
(6,695)
25,584
0.07
As adjusted
$
532,280
$
(297,868)
$
234,412
$
188,684
$
(26,532)
$
162,152
$
0.46
As a percentage of net sales
34.5
%
19.3
%
15.2
%
Six Months Ended June 27, 2020
Gross Profit
Selling, General and Administrative Expenses
Operating Profit
Income From Continuing Operations Before Income Tax Expense
Income Tax Expense
Income From Continuing Operations
Diluted Earnings Per Share From Continuing Operations1
As reported
$
932,030
$
(681,944)
$
250,086
$
162,230
$
(20,544)
$
141,686
$
0.40
As a percentage of net sales
33.9
%
24.8
%
9.1
%
Restructuring and other action-related charges:
Supply chain actions
16,702
—
16,702
16,702
—
16,702
0.05
Program exit costs
9,031
467
9,498
9,498
—
9,498
0.03
Other
(373)
6,489
6,116
6,116
—
6,116
0.02
COVID-19 related charges:
Bad debt
—
9,418
9,418
9,418
—
9,418
0.03
Inventory
14,869
—
14,869
14,869
—
14,869
0.04
Tax effect on actions
—
—
—
—
(10,221)
(10,221)
(0.03)
Total restructuring and other action-related charges
40,229
16,374
56,603
56,603
(10,221)
46,382
0.13
As adjusted
$
972,259
$
(665,570)
$
306,689
$
218,833
$
(30,765)
$
188,068
$
0.53
As a percentage of net sales
35.4
%
24.2
%
11.2
%
1
Amounts may not be additive due to rounding.
TABLE 6-C
HANESBRANDS INC.
Supplemental Financial Information
Reconciliation of Select GAAP Measures to Non-GAAP Measures
(in thousands, except per share data)
(Unaudited)
Quarter Ended June 29, 2019
Net Sales
Gross Profit
Selling, General and Administrative Expenses
Operating Profit
Income From Continuing Operations Before Income Tax Expense
Income Tax Expense
Income From Continuing Operations
Diluted Earnings Per Share From Continuing Operations1
As reported
$
1,636,709
$
604,182
$
(384,289)
$
219,893
$
165,645
$
(15,595)
$
150,050
$
0.41
Less exited programs2
(118,710)
(35,169)
9,712
(25,457)
(25,457)
3,590
(21,867)
(0.06)
As rebased
1,517,999
569,013
(374,577)
194,436
140,188
(12,005)
128,183
0.35
As a percentage of net sales
37.5
%
24.7
%
12.8
%
Restructuring and other action-related charges:
Supply chain actions
—
12,429
—
12,429
12,429
—
12,429
0.03
Tax effect on actions
—
—
—
—
—
(1,753)
(1,753)
0.00
Total restructuring and other action-related charges
—
12,429
—
12,429
12,429
(1,753)
10,676
0.03
As adjusted
$
1,517,999
$
581,442
$
(374,577)
$
206,865
$
152,617
$
(13,758)
$
138,859
$
0.38
As a percentage of net sales
38.3
%
24.7
%
13.6
%
Six Months Ended June 29, 2019
Net Sales
Gross Profit
Selling, General and Administrative Expenses
Operating Profit
Income From Continuing Operations Before Income Tax Expense
Income Tax Expense
Income From Continuing Operations
Diluted Earnings Per Share From Continuing Operations1
As reported
$
3,086,396
$
1,149,104
$
(789,603)
$
359,501
$
250,284
$
(24,579)
$
225,705
$
0.62
Less exited programs2
(212,814)
(65,057)
18,677
(46,380)
(46,380)
6,540
(39,840)
(0.11)
As rebased
2,873,582
1,084,047
(770,926)
313,121
203,904
(18,039)
185,865
0.51
As a percentage of net sales
37.7
%
26.8
%
10.9
%
Restructuring and other action-related charges:
Supply chain actions
—
29,902
—
29,902
29,902
—
29,902
0.08
Other restructuring costs
—
—
3,703
3,703
3,703
—
3,703
0.01
Tax effect on actions
—
—
—
—
—
(4,738)
(4,738)
(0.01)
Total restructuring and other action-related charges
—
29,902
3,703
33,605
33,605
(4,738)
28,867
0.08
As adjusted
$
2,873,582
$
1,113,949
$
(767,223)
$
346,726
$
237,509
$
(22,777)
$
214,732
$
0.59
As a percentage of net sales
38.8
%
26.7
%
12.1
%
1
Amounts may not be additive due to rounding.
2
Includes the results for the exited C9 Champion mass program and the DKNY intimate apparel license.
TABLE 6-D
HANESBRANDS INC.
Supplemental Financial Information
Reconciliation of Select GAAP Measures to Non-GAAP Measures
(in thousands, except per share data)
(Unaudited)
Quarter Ended June 29, 2019
As Reported
Less: Exited Programs1
Adjusted for Exited Programs
Less: Restructuring and other action-related charges
Rebased
Segment net sales:
Innerwear
$
678,604
$
21,127
$
657,477
$
—
$
657,477
Activewear
448,277
97,583
350,694
—
350,694
International
430,819
—
430,819
—
430,819
Other
79,009
—
79,009
—
79,009
Total net sales
$
1,636,709
$
118,710
$
1,517,999
$
—
$
1,517,999
Segment operating profit:
Innerwear
$
149,530
$
2,533
$
146,997
$
—
$
146,997
Activewear
68,779
22,924
45,855
—
45,855
International
66,490
—
66,490
—
66,490
Other
7,994
—
7,994
—
7,994
General corporate expenses/other
(60,471)
—
(60,471)
—
(60,471)
Restructuring and other action-related charges
(12,429)
—
(12,429)
(12,429)
—
Total operating profit
$
219,893
$
25,457
$
194,436
$
(12,429)
$
206,865
Six Months Ended June 29, 2019
As Reported
Less: Exited Programs1
Adjusted for Exited Programs
Less: Restructuring and other action-related charges
Rebased
Segment net sales:
Innerwear
$
1,154,549
$
30,658
$
1,123,891
$
—
$
1,123,891
Activewear
853,617
182,156
671,461
—
671,461
International
921,648
—
921,648
—
921,648
Other
156,582
—
156,582
—
156,582
Total net sales
$
3,086,396
$
212,814
$
2,873,582
$
—
$
2,873,582
Segment operating profit:
Innerwear
$
254,156
$
4,033
$
250,123
$
—
$
250,123
Activewear
112,372
42,347
70,025
—
70,025
International
151,266
—
151,266
—
151,266
Other
10,429
—
10,429
—
10,429
General corporate expenses/other
(135,117)
—
(135,117)
—
(135,117)
Restructuring and other action-related charges
(33,605)
—
(33,605)
(33,605)
—
Total operating profit
$
359,501
$
46,380
$
313,121
$
(33,605)
$
346,726
1
Includes the results for the exited C9 Champion mass program and the DKNY intimate apparel license.
TABLE 6-E
HANESBRANDS INC.
Supplemental Financial Information
Reconciliation of Select GAAP Measures to Non-GAAP Measures
(in thousands, except per share data)
(Unaudited)
Last Twelve Months
July 3, 2021
June 27, 2020
EBITDA1:
Income from continuing operations
$
102,294
$
489,305
Interest expense, net
174,036
159,927
Income tax expense (benefit)
(90,551)
66,201
Depreciation and amortization
116,442
113,251
Total EBITDA
302,221
828,684
Total restructuring and other action-related charges (excluding tax effect on actions)
715,650
85,513
Stock compensation expense
13,491
10,692
Total EBITDA, as adjusted
$
1,031,362
$
924,889
Net debt:
Debt (current and long-term debt)
$
3,684,982
$
3,985,631
Notes payable
—
13
(Less) Cash and cash equivalents
(667,298)
(556,099)
Net debt
$
3,017,684
$
3,429,545
Net debt/EBITDA, as adjusted
2.9
3.7
1
Earnings from continuing operations before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP financial measure.
Quarters Ended
Six Months Ended
July 3, 2021
June 27, 2020
July 3, 2021
June 27, 2020
Free cash flow1:
Net cash from operating activities
$
195,310
$
65,423
$
212,256
$
(17,793)
Capital expenditures
(7,527)
(20,753)
(25,331)
(46,512)
Free cash flow
$
187,783
$
44,670
$
186,925
$
(64,305)
1
Free cash flow includes the results from continuing and discontinued operations.
TABLE 7
HANESBRANDS INC.
Supplemental Financial Information
Reconciliation of GAAP Outlook to Adjusted Outlook
(in thousands, except per share data)
(Unaudited)
Quarter Ended
Quarter Ended
Year Ended
October 2, 2021
January 1, 2022
January 1, 2022
Operating profit outlook, as calculated under GAAP
$216,000 to $226,000
$172,000 to $192,000
$795,000 to $825,000
Restructuring and other action-related charges
$19,000
$28,000
$85,000
Operating profit outlook, as adjusted
$235,000 to $245,000
$200,000 to $220,000
$880,000 to $910,000
Diluted earnings per share from continuing operations, as calculated under GAAP1
$0.42 to $0.45
$0.29 to $0.34
$1.50 to $1.58
Restructuring and other action-related charges
$0.03
$0.08
$0.18
Diluted earnings per share from continuing operations, as adjusted
$0.45 to $0.48
$0.37 to $0.42
$1.68 to $1.76
1
The company expects approximately 353 million diluted weighted average shares outstanding for the quarters ended October 2, 2021 and January 1, 2022 and for the year ended January 1, 2022.
