HanesBrands, a leading US-based apparel manufacturer, has reported net sales of $1.16 billion in the first quarter of fiscal 2024 (Q1 FY24), which met the midpoint of its projected range but marked a significant 17 per cent decrease from the previous year.

The global sales of the Champion brand, a key segment for HanesBrands, aligned with company expectations, showing growth in markets like Japan, China, and Latin America. However, these gains were overshadowed by an overall 26 per cent decrease in global Champion brand sales on a reported basis and a 25 per cent decrease on a constant currency basis compared to the same period last year.

Gross profit and adjusted gross profit both increased by approximately 2 per cent year-over-year. The gross margin and adjusted gross margin improved substantially, both reaching 39.9 per cent, up by 750 and 720 basis points, respectively. This improvement in margins highlights effective cost management and operational efficiencies, the company said in a press release.

Selling, general, and administrative expenses climbed by 4 per cent to $409 million, reflecting ongoing investments and operational adjustments. Despite this increase, the company’s operating profit stood at $52 million with an operating margin of 4.5 per cent, slightly better than the $57 million and 4.1 per cent recorded in the previous year. The adjusted operating profit impressively surged by 32 per cent to $84 million, with an adjusted operating margin of 7.3 per cent, which exceeded the company’s expectations by approximately 270 basis points.

On a less positive note, HanesBrands reported a net loss of approximately $39 million, or $0.11 per diluted share, which is deeper than the $34 million loss, or $0.10 per diluted share from the first quarter of the prior year. The adjusted net loss was $7 million, or $0.02 per diluted share, improving from a loss of $21 million, or $0.06 per diluted share, in the first quarter of 2023.

Segment-wise, innerwear sales dropped by 8 per cent, slightly below company expectations due to higher-than-anticipated inventory management actions by certain retailers. Activewear sales saw a steep decline of 31 per cent, or $97 million. International sales also decreased by 12 per cent on a reported basis.

“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. With the year unfolding as anticipated and our profit visibility, we reiterated our outlook for the full-year,” said Steve Bratspies, CEO.

Fibre2Fashion News Desk (DP)

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