Hanesbrands Inc. (NYSE:HBI) Q4 2014 Earnings Conference Call - Final Transcript
Jan 29, 2015 • 04:30 pm ET
Richard A. Noll
consulting with works councils in Europe in the next 30 to 60 days, after which, we will be in a position to share the details with you and begin our work on integrating DBA into our operations. The more we learn about their business and their people, the more confident we are in our ability to achieve our expected synergies and to ultimately deliver EUR100 million in operating profit.
Looking to 2015, we believe it is shaping up to be another record year. Even after doubling EPS in just two years, our guidance represents another year of double-digit growth, driven by the continued efficiency gains of our supply chain, the benefits from our Innovate-to-Elevate strategy, synergies for Maidenform and contributions from DBA.
Our 2015 growth rates would've been even greater had they not been dampened $230 million in sales, $44 million in operating profit and $0.37 in EPS by two events outside our control. The rapid strengthening of the dollar and the unexpected bankruptcy of Target Canada. Our guidance assumes 90% of the Target Canada business is unrecoverable in 2015, and the Euro is at 1.10. As we have done in the past when faced with headwinds that are outside our control, we fully incorporate them into our guidance, which allows us to focus on the things we can control, executing our plan and, as always, driving for upside all through the year.
So when closing, we have had a great couple of years, and we believe this is only the beginning. Our entire organization remains focused on executing our long-term strategy and that comes from having great people who can rise to the occasion in any environment. This, along with the strength of our business model, gives me confidence in delivering another year of double-digit earnings growth.
With that, I'll turn the call over to Gerald.
Gerald W. Evans
Thanks, Rich. We accomplished a lot in 2014. We expanded our operating margins 140 basis points led by efficiency gains within our company-owned supply chain. We delivered synergies from Maidenform that were more than double our original expectations. We're invested an incremental $8 million in media to further strengthen our brands. And we expanded the distribution of our new innovation platforms, which in turn drove another 30 basis points of market share gains in men's underwear. A testament to our ability to drive productivity for our retail partners as we are already twice the size of the number two competitor and five times larger than the number three player, with sales primarily in Department stores.
Our strong performance reinforces one simple message. We have the right set of strategies and our entire organization is executing extremely well. Touching briefly on the quarter, the consumer environment remain choppy, but the overall trend was positive as sell-through in November and December was stronger than October. Innerwear sales were flat over the last year as our Basics business was able to offset the softness in bras and hosiery, while our operating profit increased 18%, driven by