HanesBrands Q3 sales suffer amid challenging conditions

HanesBrands third quarter net sales of 1.51 billion dollars decreased 9.5 percent as the challenging global macroeconomic environment continued to pressure the topline.

The company’s net sales on a constant currency basis decreased 9.3 percent. On a constant currency basis, the company said in a release, growth in Latin America and Japan as well as consistent performance in the U.S. innerwear was more than offset by a decrease in U.S. activewear, the continued macroeconomic-driven slowdown in consumer spending impacting Australia, as well as decreases in Europe and parts of Asia.

HanesBrands posts sales decline at Champion brand

Global Champion brand sales decreased 19 percent on a reported basis and 20 percent on a constant currency basis as compared to prior year. U.S. sales decreased 16 percent driven by the continued challenging activewear market dynamics and the expected short-term impact from the company’s continued strategic actions taken to strengthen the brand and position Champion for long-term profitable growth.

Internationally, sales decreased 22 percent on a reported basis and 24 percent on a constant currency basis. The company added that constant currency sales increased in Japan, which was more than offset by decreases in Europe, due to the expected cautious ordering from wholesale partners, as well as the macroeconomic headwinds impacting demand in parts of Asia and Australia.

HanesBrands’ Q3 operating results

Gross profit of 470 million dollars decreased 16 percent and gross margin decreased 260 basis points to 31.1 percent as compared to prior year. Adjusted gross profit was 536 million dollars and adjusted gross margin of 35.5 percent increased 100 basis points as compared to third-quarter 2022.

Operating profit and operating margin were 66 million dollars and 4.4 percent, while adjusted operating profit of 143 million dollars decreased from 168 million dollars in third-quarter 2022. Adjusted operating margin of 9.5 percent decreased approximately 60 basis points from prior year.

Loss for the quarter totaled approximately 39 million dollars or 11 cents per diluted share, while adjusted income declined to 34 million dollars or 10 cents per diluted share.

HanesBrands forecasts revenue decline for FY23

For fiscal year 2023, the company currently expects net sales of approximately 5.70 billion dollars, an approximate 9 percent decrease as compared to prior year on a reported basis and an approximate 8 percent decrease on a constant currency basis.

GAAP operating profit is anticipated to be approximately 309 million dollars and adjusted operating profit of approximately 425 million dollars.

For the fourth quarter, the company currently expects net sales to be approximately 1.36 billion dollars, down approximately 8 percent on a reported basis and approximately 7 percent on a constant currency basis.

GAAP operating profit from continuing operations is expected to reach approximately 116 million dollars and adjusted operating profit to be approximately 131 million dollars.