HanesBrands, which owns Hanes, Champion and Wonderbra reported a 9.5% decline in net sales to $1.51bn, while the loss from continuing operations was $39m, down from $80m in the same period last year.
The North California-based company reported that although there was steady growth in Latin America, Japan, and the US innerwear sector, sales were hindered by a 16% decline in US activewear driven by “continued challenging activewear market dynamics.”
Additionally, the ongoing macroeconomic-driven slowdown in consumer spending affected Australia, and there were also reductions in sales in Europe and certain parts of Asia.
Global Champion brand sales decreased 19% on a reported basis and 20% on a constant currency basis as compared to the prior year.
HanesBrands CEO Steve Bratspies said: “Despite the difficult global macroeconomic environment, which continues to pressure sales, we delivered meaningful improvement across key performance metrics and initiated an evaluation of strategic alternatives for our global Champion business.”
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Key results from HanesBrands Q3
- Net sales decreased to $1.51bn compared to last year
- Operating income also declined to $66m a 53.4% drop
- Net loss totalled $39m
Gross Profit of $470m decreased by 16.4% and gross margin decreased by 260 basis points to 31.1% as compared to the prior year.
Adjusted gross profit was $536m and adjusted gross margin of 35.5% increased 100 basis points as compared to 2022’s third quarter.
“We’re reducing inventory, generating operating cash flow in line with historical levels, and paying down debt as planned,” said Bratspies.
“We expect further improvement in these key performance metrics in the fourth quarter.”
HanesBrands expects revenue decline for FY23
The company anticipates a net sales decrease of approximately 9% to $5.7bn in the fiscal year 2023, compared to an 8% decrease on a constant currency basis the prior year.
Generally accepted accounting principles (GAAP) operating profit is expected to be $309m and adjusted profit to be $435m.
For the fourth quarter, HanesBrands forecasts net sales to be $1.36bn, down 8% on a reported basis and 7% on a constant currency basis.
The company said GAAP will generate an operating profit of around $116m from continuing operations and an adjusted profit of around $131m.