NEW YORK (AP) — HanesBrands Inc. reported that fourth-quarter net income nearly doubled as the underwear maker benefited from subsiding cotton prices and its moves to exit from unprofitable businesses.
The Winston-Salem, N.C.-based maker of Hanes and Champion underwear said Tuesday that it earned $80.4 million, or 80 cents per share, in the three-month period that ended Dec. 29. That compares with $41 million, or 41 cents per share, in the year-earlier period.
Excluding bond prepayment expenses, the company earned $1.07 per share.
Revenue rose 4.7 percent to $1.15 billion.
Analysts had expected $1.04 per share on revenue of $1.15 billion, according to a survey by FactSet.
The results were released after the markets closed. Shares slipped 18 cents to $38 in after-market trading after rising 48 cents to $38.18 in regular trading.
"We had a very successful year under difficult circumstances," said HanesBrands' Chief Financial Officer Richard D. Moss in a statement. "We managed through a $160 million cotton inflation bubble with a successful pricing strategy and came out stronger, more innovative and more profitable. We achieved the guidance we laid out at the beginning of the year even with our decision to exit certain underperforming businesses."
HanesBrands has significantly reduced its debt and no longer considers itself highly leveraged. Hanes prepaid $550 million in long-term bonds in 2012 and $750 million over the past five quarters. The company said its year-end long-term debt ratio was about 2.5 times adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization.
Meanwhile, HanesBrands has also been able to produce more consistent results by quickly exiting its European imagewear screen print business and re-organizing its domestic screen print business to focus on branded printwear.
The company said it has also been able to successful manage through significant cotton inflation during the early part of 2012.
Sales of Hanes and Champion men's underwear, Hanes panties and Bali bras all increased by double-digit increases in the fourth quarter. New products such as Hanes ComfortBlend men's underwear and Hanes Classics slim fit and stretch premium underwear T-shirts continue to exceed expectations, the company said.
HanesBrands' outerwear business also had a strong fourth-quarter with net sales growth of 6 percent.
HanesBrands announced last November that it planned to cut its debt and lower its interest expenses by prepaying half of its senior notes due in 2016 a year earlier than expected. The move prompted the company to raise its forecast for its 2013 fiscal year at that time to a range of $3.25 to $3.40 per share on revenue of $4.6 billion to $4.7 billion. It previously forecast earnings in the low $3 range.
HanesBrands reiterated its annual outlook on Tuesday and said that it should have operating profit of $500 million to $550 million. Analysts expect earnings of $3.33 per share on revenue of $4.67 billion for the year, according to FactSet.