HanesBrands sales growth carried by Champion
today May 3, 2019
American basics, athleticwear and innerwear company HanesBrands announced an 8% increase in first-quarter net sales on Wednesday (10% in constant currencies), as its Champion brand continues to surf the wave of the 90s nostalgia trend.
For the first quarter ended March 30, 2019, Hanes reported net sales of $1.59 billion, up from $1.47 billion in the prior-year period, with revenues in the company’s innerwear, activewear and international segments all exceeding its expectations.
Sales were particularly strong in Hanes’ US activewear segment, increasing 17%, while the Champion brand saw sales shoot up over 80% outside of the mass channel. At mass retail, the brand saw a slight 3% decrease in sales.
The Winston-Salem, North Carolina-based company’s US innerwear segment also reported a 3% decrease in sales in the quarter, although innerwear basics more specifically saw a 2% rise.
Hanes’ international segment fared better, posting a 13% increase (18% in constant currencies) in sales, thanks to growth in Europe, Asia, Australia and the Americas.
In constant currencies, the Champion brand saw 75% growth globally, with strong double-digit gains recorded in all regions. This progress was driven by retail and online expansion initiatives in the US, and wholesale expansion in Northern and Western Europe. The brand’s wholesale and consumer-direct business is also experiencing strong growth in Asia, and it has just begun expanding its distribution in Australia.
Across all of Hanes’ segments and brands, consumer-direct sales (defined as sales from brand retail stores and all online business) increased 16% in the first quarter.
The company’s net income for the quarter totaled $79.48 million, up 0.1% from $79.41 million in the prior-year period, while diluted earnings per share were $0.22, the same as a year ago.
“We are delighted to continue our business momentum with a very strong first quarter,” said Hanes CEO Gerald W. Evans in a release. “Our cash generation is on plan, our debt leverage is coming down, and our diversified business portfolio is paying dividends. We feel confident in achieving our long-term goals and enhancing value creation with our business model.”
In light of its first-quarter results, Hanesbrands has reiterated its previously stated full-year 2019 guidance of net sales of between $6.885 billion and $6.985 billion, and EPS in the range of $1.59 to $1.67.
In the second quarter, the company expects sales to total between $1.735 billion and $1.765 billion, while EPS is predicted to be between $0.40 and $0.42.
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