HanesBrands sees improvements in sales, predicts strong growth in Q1
HanesBrands Inc., the Winston-Salem, North Carolina-based owner of brands including Champion, Playtex and Wonderbra, reported a 2.8% increase in its Q4 sales on Tuesday and revealed an optimistic outlook for the quarter currently in progress.
For the fourth quarter ended January 2, 2021, the group’s net sales totaled $1.8 billion, up from $1.75 billion in the same period in the previous year. This included $28 million in revenues from the sale of personal protective equipment (PPE).
The company saw particularly strong growth in its U.S. innerwear sales, which rose 13% year over year, excluding revenues from PPE. Rebasing the prior-year quarter to reflect the fact that HanesBrands has since exited its C9 Champion mass program and its DKNY intimate apparel license, sales in the innerwear segment rose 20%, or 16% excluding PPE.
Sales in HanesBrands’ activewear segment increased 7%, led by a strong performance from the Champion brand and growth in the online, wholesale and distributor channels. The international segment posted a 2% increase in revenues, or 1% excluding the contribution of $6 million in PPE sales. Australia, Canada and Latin America all saw growth in the quarter, but the company continued to suffer from coronavirus-related challenges in Asia and Europe. On a constant currency basis, international sales declined approximately 3%.
“We delivered solid sales growth in the fourth quarter, with continued revenue momentum in our largest businesses and strong market share performance in our innerwear and activewear segments,” commented HanesBrands CEO Steve Bratspies in a release.
The company’s net loss for the quarter was $332.1 million, or $0.95 per share, compared to net income of $185.0 million, or $0.51 per diluted share, in the prior-year period.
Over the course of the fourth quarter, HanesBrands also conducted a business assessment and began implementing its “Full Potential” plan. The new strategy will see the company focus on driving the growth of the Champion brand globally, as well as on expanding its innerwear business with further brands and products. The company also plans to develop its e-commerce capabilities, while streamlining its global portfolio.
As part of these streamlining efforts, the group has concluded that PPE is no longer a long-term growth opportunity. Furthermore, the company is now exploring strategic alternatives for its European innerwear business.
“We are implementing our Full Potential plan with the goal of creating a consumer-centric company that delivers long-term growth and higher profitability,” explained Bratspies. “I’m encouraged by our rapid progress as we work to simplify our business and transform our organization to move faster, lower costs and focus on our highest-return growth opportunities.
For the full fiscal year, HanesBrands reported net sales of $6.7 billion, down 4.3% from $6.97 billion in the previous year. Annual net loss came to $75.6 million, or $0.21 per diluted share, compared to net income of $600.7 million, or $1.64 per diluted share.
Looking to the future, the company expects its first-quarter net sales to be in the range of $1.485 billion to $1.515 billion, with the midpoint of this guidance representing year-over-year growth of 14%. Both reported and adjusted earnings per share are expected to be between $0.24 and $0.27.
HanesBrands stock skyrocketed almost 25% on Tuesday following the announcement of the company’s quarterly results and new strategic initiatives.
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