HanesBrands (NYSE: HBI) reported Q4 EPS of $0.38, $0.09 better than the analyst estimate of $0.29. Revenue for the quarter came in at $1.8 billion versus the consensus estimate of $1.64 billion.

Launches “Full Potential” Plan

• Net sales of $1.8 billion, driven by strong performance across biggest business segments
• Continued momentum in global Champion and U.S. Innerwear
• Full Potential plan to drive long-term growth and higher profitability
• Company exploring strategic alternatives for European Innerwear business
• GAAP loss per share of $0.95, includes $1.33 of charges primarily related to personal protective garment business and 20% SKU reduction effort across company
• Adjusted EPS of $0.38 per share
• Declares regular quarterly dividend
• Virtual Investor Day planned for May

“I’m extremely proud of the HanesBrands team for all it accomplished in 2020 under very challenging conditions, and I thank our global associates for their hard work and dedication,” said HanesBrands Chief Executive Officer Steve Bratspies. “We delivered solid sales growth in the fourth quarter, with continued revenue momentum in our largest businesses and strong market share performance in our Innerwear and Activewear segments.”

During the fourth quarter, the company completed a comprehensive business assessment and began implementing its Full Potential plan. The Full Potential plan focuses the company on four pillars to drive growth and enhance long-term profitability:

• grow the Champion brand globally
• drive growth in Innerwear with brands and products that appeal to younger consumers
• build e-commerce excellence across channels
• streamline global portfolio

The company has identified 20 strategic initiatives under these four key pillars to unlock growth and has launched a multi-year cost savings program intended to substantially self-fund the investments necessary to achieve the Full Potential plan’s objectives. The company expects to provide a comprehensive overview of the Full Potential plan at its virtual Investor Day in May.

“We are implementing our Full Potential plan with the goal of creating a consumer-centric company that delivers long-term growth and higher profitability,” Bratspies said. “I’m encouraged by our rapid progress as we work to simplify our business and transform our organization to move faster, lower costs and focus on our highest-return growth opportunities.”

GUIDANCE:

HanesBrands sees Q1 2021 EPS of $0.24-$0.27, versus the consensus of $0.18. HanesBrands sees Q1 2021 revenue of $1.485-1.515 billion, versus the consensus of $1.46 billion.

The company is providing financial guidance for the first quarter of 2021 and plans to provide a full-year 2021 outlook as well as three-year financial targets as part of its detailed review of the Full Potential plan at its upcoming Investor Day in May.

First-quarter guidance reflects continued uncertainty related to the COVID-19 pandemic and its impact on the global consumer environment.

The company expects first-quarter 2021 net sales to total approximately $1.485 billion to $1.515 billion. The midpoint of guidance represents net sales growth of 14% over first-quarter 2020 and includes a projected benefit of $50 million from changes in foreign currency exchange rates and implies growth of 10% in constant currency.

The company expects first-quarter GAAP operating profit to range from $140 million to $150 million. Adjusted operating profit is expected to range from $150 million to $160 million.

The midpoint of adjusted operating profit suggests an operating margin of 10.3%, compared with adjusted operating margin of 4.8% in the first quarter of 2020. The expected year-over-year margin expansion is due to higher sales, positive manufacturing variances and the anniversary of last year’s COVID-driven volume de-leverage.

The company expects the first-quarter 2021 tax rate to be approximately 6% on a GAAP basis and approximately 16% on an adjusted basis.

GAAP and adjusted earnings per share are expected to range from $0.24 to $0.27.

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