HanesBrands returns to profit in Q1, Champion U.S. sales hurt by product supply delays
HanesBrands announced on Friday a 5% uptick it net sales for the first quarter, on the back of increased sales in the company's U.S. and international markets, and continued demand for its Champion brand.
The Winston-Salem, North Carolina-based company said net sales for the quarter increased to $1.58 billion, as demand for the company’s brands drove growth in the U.S., Americas and Europe.
By category, global activewear sales grew $23 million, or 6% over prior year. Global Champion brand sales increased 6% over prior year. By geography, Champion sales internationally increased 10%, and increased 2% in the U.S.
However, product supply challenges to the U.S. market did not improve as expected in the quarter resulting in approximately $40 million of in-hand orders in the U.S. that were unfulfilled. Had product arrived in time, Champion sales in the U.S. would have increased at a high-teens rate for the first quarter, said the company in a statement.
U.S. innerwear sales increased 1.5% over prior year, exceeding the company’s outlook, driven by retail space gains, higher prices and positive mix. The strong performance resulted in positive comps above last year’s rapid growth.
Company international sales, on a constant currency basis, increased 7% compared to prior year driven by growth in Europe, the Americas and China. Constant currency sales declined in Japan due to ongoing Covid-related pressures and in Australia due to product delays, said the company.
“I’m very proud of our team for delivering another strong quarter in an incredibly challenging time as we exceeded expectations for sales and earnings per share,” said Steve Bratspies, CEO.
“We saw continued strong demand for our brands in the quarter, with global Champion and innerwear growth accelerating on a two-year basis.”
Bratspies continued, “At the same time, the global operating environment has deteriorated significantly over the past three months, with accelerating inflation, continued Covid-19 disruptions and logistical challenges. In this environment, we are highly focused on executing in the areas we control. We are unwavering in our commitment to investing in our people, brands and technology, and I remain confident that we will deliver on our Full Potential plan.”
Net income for the quarter ending April 2 totalled $118 million compared to a net loss of $263 million in the same quarter last year.
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