Benzinga | Aug 5, 2021 11:24AM EDT

Hanesbrands Q2 Earnings Tops Estimates; Provides Upbeat Q3 Outlook, Raises FY21 Guidance

* Hanesbrands Inc (NYSE:HBI) reported second-quarter FY21 sales growth of 13.6% year-on-year, to $1.75 billion, beating the analyst consensus of $1.59 billion.

* The innerwear sales decreased 29% Y/Y due to the overlap of last year's $614 million of PPE sales, activewear sales rose 140%, and the international segment gained 91%. Global Champion sales rose more than 120% Y/Y.

* The gross margin increased 560 basis points Y/Y to 38.9%.

* The operating margin contracted 70 basis points to 12.4%, and operating income for the quarter rose 8% to $217 million.

* Inventories declined 13% Y/Y to $1.5 billion.

* The company held $676.2 million in cash and equivalents as of July 3, 2021.

* Net cash from operating activities amounted to $195.3 million with a free cash flow of $187.7 million.

* Adjusted EPS from continuing operations of $0.47 beat the analyst consensus of $0.39.

* Outlook: Hanesbrands sees Q3 FY21 sales of $1.78 billion - $1.81 billion, versus the consensus of $1.61 billion. The company expects adjusted EPS of $0.45 - $0.48, versus the consensus of $0.41.

* For Q4, It sees net sales of $1.71 billion - $1.78 billion and adjusted EPS of $0.37 - $0.42.

* For FY21, It raised the net sales outlook to $6.75 billion - $6.85 billion (prior $6.2 billion - $6.3 billion), versus the consensus of $6.31 billion.

* It sees adjusted EPS of $1.68 - $1.76 (prior $1.51 - $1.59), compared to the consensus of $1.58.

* Price action: HBI shares are trading higher by 6.02% at $19.455 on the last check Thursday.