2023-05-03 09:08:46 ET
Hanesbrands Inc. ( NYSE: HBI ) shares rose modestly before the bell on Wednesday after reporting stronger than expected Q1 results.
The North Carolina-based apparel company reported a 12% drop in revenue year over year to $1.39B and a $0.06 per share loss as compared to a $0.01 loss in Q1 2022. Both figures, however, were lighter declines than analysts had anticipated .
Gross margins deteriorated 470 basis points and operating margin contracted 950 basis points year over year amid higher labor costs, foreign currency impacts, and efforts to offload bloated inventory. Total merchandise on hand declined 1% sequentially, but remained 8% above 2022 levels at $1.97B.
“We delivered first-quarter results in-line with our outlook, generated positive cash flow and reiterated our full-year outlook,” CEO Steve Bratspies said. “We continue to make progress on several of our Full Potential initiatives. We expanded our innerwear innovation globally, successfully completed a key technology milestone, progressed on our industry-leading sustainability initiatives and continued to generate cost savings across the organization. We’re confident in the progress we’re making to become a more consumer-centric, data-driven company that consistently generates higher sales and profit growth over time.”
For the full fiscal year, management anticipates net sales from continuing operations of approximately $6.05B to $6.2B, suggesting upside to the $6.06B consensus. Adjusted earnings per share from continuing operations to range from approximately $0.31 to $0.42, suggesting a midpoint nearly in-line with the $0.37 consensus. Cash flow from operations of approximately $500M and $70M worth of capital expenditures are expected for the full year.
That said, the second quarter is expected to showcase a slower recovery than the sell-side had projected.
Net sales from continuing operations of approximately $1.42B to $1.47B are expected for the second quarter against a $1.46B consensus. The company also forecast an adjusted loss per share from continuing operations $0.05 to $0.00, well below the consensus expectation of $0.04 in earnings per share.
Shares of Hanesbrands ( HBI ) rose about 1% before the bell on Wednesday.
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Hanesbrands beats Q1 estimates, offers upbeat full-year sales guidance