Hanesbrands reported an increase in net sales during 2016 and said it expects sales to continue ticking up this year, although at a modest pace.
Sales at the intimate and basic apparel company grew by 5 percent to more than $6 billion and the fourth quarter was even better, growing by 12 percent to about $1.6 billion.
While the growth was mainly due to acquisitions that Hanes made, including Pacific Brands of Australia, Champion Europe and Champion Japan, the numbers were hampered by a “weaker than expected retail environment” in the last part of the year.
Hanes reported net income for the year of $539.4 million, an almost 26 percent jump from $428.8 million posted in 2015 and adjusted operating profit up 6 percent to $914 million.
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Chief financial officer Richard Moss told investors and analysts during a Thursday call going over the financial results that despite a “very cautious view of the retail market” at the beginning of 2016, the reality still fell below expectations.
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He highlighted holiday traffic, which he said declined at an even higher rate than 2015, leading stores to place fewer orders or destock.
Hanes chief executive officer Gerald W. Evans Jr. added, “Despite the challenging environment, we were able to manage inventory and generate cash, returning nearly $550 million to shareholders through quarterly cash dividends and share repurchases.”
As for 2017, the company expects “high-single-digit growth” of about 8 percent to $6.5 billion, along with “record cash flow from operations” and growth for operating profit.
Evans said the company is “aggressively growing our online marketplace” and plans to spend at least half of its media budget on digital marketing during the year.
“As we navigate the changing consumer marketplace and the trend toward online buying, we are well positioned to generate overall growth and drive total shareholder return,” Evans said.
If net sales increase as expected in 2017, it would mark Hanes’ fifth consecutive year of sales growth.