Outlook
The company is now projecting adjusted diluted EPS for the 12 months ending Jan. 3, 2016 to be in the range of $1.46 to $1.48 on projected sales of close to $2.55 billion. The company’s most recent guidance was for adjusted diluted EPS of approximately $1.50 on projected net sales of close to $2.6 billion.
Sales growth in printwear for the full calendar year is now projected to be close to 10 percent, compared to the company’s previous projection of printwear sales growth in excess of 10 percent. The projected slight reduction in printwear sales is due to unfavorable product mix in the fourth quarter as warmer seasonal weather is expected to result in lower seasonal sales of high-value fleece and long-sleeve T-shirts.
Branded apparel sales growth for the full calendar year is now expected to be approximately 12 percent, compared to previously anticipated sales growth of approximately 15 percent. The lower projected sales growth in branded apparel primarily reflects the sales shortfall in the third calendar quarter and the assumption of the continuing impact of issues with retailer inventory replenishment combined with soft retail market conditions in the fourth calendar quarter of 2015.
The company is projecting adjusted diluted EPS of $0.28 to $0.30 for the December quarter, on projected sales revenues in excess of $500 million, compared with an adjusted net loss of $0.15 per share on sales revenues of $390.6 million in the corresponding quarter of the prior year. Projected net earnings for the fourth quarter of calendar 2015 are expected to be a record for a fourth calendar quarter and up by more than 60 percent, compared to the previous record in the fourth calendar quarter of 2013. The company’s projected results for the fourth calendar quarter reflect expected continued unit-volume growth in both operating segments, including the impact of new retail program shipments in branded apparel and the impact of the acquisition of Comfort Colors.
The projected sales and earnings momentum in the fourth quarter is expected to position the company for continued earnings growth in calendar 2016, as the company expects to achieve continuing volume growth and further manufacturing cost reductions, combined with lower cotton costs. The ramp-up of the company’s new yarn-spinning facilities is on plan and the company continues to expect to achieve its projected three-year target of $100 million in annual cost savings by the end of 2017.
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