Activewear giant HanesBrands has reported a 16% decrease in net sales for its first quarter, impacted by the sale of some of its US hosiery operations. Overall, net sales were US$1.16 billion, down from $1.39 billion and at the midpoint of the company’s expected range. Net loss for the quarter was $39.1 million up from a loss of $34.4 million last year with the divestment of its Sheer Hosiery business offsetting the rise in innerwear market share.
Hanesbrands closed the sale of its US Sheer Hosiery business in September 2023. For the full year 2023, the business generated $50 million of net sales and an operating loss of $2 million. For second-quarter 2023, its generated approximately $13.5 million of net sales and an operating loss of approximately $1.5 million.
“We delivered solid first quarter results with sales at the midpoint of our outlook, better-than-expected adjusted operating profit, positive cash flow generation and further reduction of our leverage,” said Steve Bratspies, HanesBrands CEO. “With the year unfolding as anticipated and our profit visibility, we reiterated our outlook for the full-year.
“Over the past three years, we’ve taken necessary actions across the business to enhance and strengthen both the operating and financial models of the company. With our leading brand positions, lower fixed-cost structure, re-established gross margin, consistent cash generation and a commitment to reduce debt, we have created a multi-year flywheel designed to accelerate earnings, deleverage faster, and invest in growth initiatives, which we believe will drive strong shareholder returns over the next several years.”
Over the course of the quarter, innerwear sales decreased 8% compared to the prior year, which was slightly below the company’s expectations due to a higher-than-anticipated level of inventory management actions by select retailers, while activewear sales decreased 31%, or $97 million and international sales were down 12%.
The increase in innerwear market shares were driven by a combination of operating model enhancements, new product innovation and higher levels of brand marketing investment, Hanesbrands said, adding that sales from new product innovation increased 19% over prior year. Brand marketing investments more than doubled over the same period last year to support the Maidenform M product line as well as the brand campaign behind its recently launched Hanes SuperSoft product line.
