For the first quarter, HanesBrands Inc. reported net sales of 1.39 billion dollars, a decrease of 12 percent compared to last year’s strong first-quarter results.
On a constant currency basis, the company said in a release, net sales decreased 10 percent due to the macro-driven slowdown in consumer spending in the U.S. and Australia.
The company recorded a loss of 34 million dollars or 10 cents per diluted share compared to income of 114 million dollars or 32 cents per diluted share, last year. Adjusted loss totaled 21 million dollars or 6 cents per diluted share compared to adjusted income of 118 million dollars or 34 cents per diluted share, in first-quarter 2022.
“We delivered first-quarter results in-line with our outlook, generated positive cash flow and reiterated our full-year outlook. We’re confident in the progress we’re making to become a more consumer-centric, data-driven company that consistently generates higher sales and profit growth over time,” said Steve Bratspies, the company’s CEO.
Review of HanesBrands’ Q1 results
The company added that global Champion brand sales decreased 17 percent on a reported basis, with a 22 percent decline in the U.S. and a 12 percent decline internationally. In constant currency, global Champion brand sales decreased 15 percent, with a 7 percent decline internationally.
Gross profit of 450 million dollars declined 23 percent and gross margin declined 470 basis points to 32.4 percent, while adjusted gross profit was 454 million dollars. Adjusted gross margin of 32.7 percent declined approximately 440 basis points compared to prior year.
Operating profit and operating margin were 57 million dollars and 4.1 percent, respectively, compared to 171 million dollars and 10.8 percent, respectively, in the prior year. Adjusted operating profit of 63 million dollars declined from 175 million dollars in first-quarter 2022. Adjusted operating margin of 4.6 percent declined approximately 660 basis points.
HanesBrands performance across core categories
The company’s innerwear sales decreased 4 percent, and activewear sales declined 19 percent driven by the slowdown in consumer spending. By brand, Champion sales within the activewear reporting segment decreased 19 percent, while sales of other activewear brands also decreased 19 percent.
International sales decreased 9 percent on a reported basis, including 31 million dollars from unfavourable foreign exchange rates. International sales decreased 3 percent on a constant currency basis compared to prior year as growth in Europe, the Americas and Japan was offset by declines in Australia and China.
HanesBrands expects marginal decline in FY23 sales
For fiscal-year 2023, the company continues to expect net sales from continuing operations of approximately 6.05 billion dollars to 6.20 billion dollars. At the midpoint, this represents an approximate 1 percent decline on a constant currency basis and a 2 percent decline on a reported basis.
GAAP operating profit is expected to range from approximately 446 million dollars to 496 million dollars and adjusted operating profit from approximately 500 million dollars to 550 million dollars. GAAP earnings per share are expected to range from approximately 14 cent to 25 cents, while adjusted earnings per share from approximately 31 cents to 42 cents.
For the second quarter, the company currently expects net sales of approximately 1.42 billion dollars to 1.47 billion dollars, an approximate 3 percent decline as compared to prior year on a constant currency basis and an approximate 5 percent decline on a reported basis.
GAAP operating profit is expected to range from approximately 55 million dollars to 75 million dollars and adjusted operating profit from approximately 70 million dollars to 90 million dollars. GAAP loss per share is expected to range from approximately 9 cents to 4 cents and adjusted loss per share from approximately 5 cents to 0 cents.