HanesBrands’ Activewear, Champion Still Strong, Plans to Raise Prices – WWD

HanesBrands’ activewear, innerwear and Champion companies continue to be bright spots whilst many shoppers plan for a return to in-person settings. 

The Winston-Salem, N.C.-based innerwear and activewear firm — father or mother to manufacturers corresponding to Hanes, Bali, Playtex, Maidenform, L’eggs and Wonderbra, amongst others — reported quarterly earnings Thursday morning earlier than the market opened, bettering on high and backside strains as the corporate gears as much as promote its European innerwear enterprise and considers elevating costs globally. 

“I wish to thank our associates for delivering robust ends in the quarter, notably our manufacturing workforce, which has put us in place to fulfill shopper demand,” Steve Bratspies, HanesBrands chief executive officer, mentioned in a press release. “We’re sustaining our fourth-quarter outlook for web gross sales and adjusted working revenue, pushed by continued demand for our manufacturers, our robust stock place and our international workforce’s confirmed means to handle ongoing macro challenges.

“We proceed to make progress on our Full Potential plan as we put money into our iconic manufacturers, construct expertise, improve e-commerce capabilities and modernize our technology,” Bratspies continued. “We’re excited by the early outcomes from Full Potential and are assured we are able to ship the long-term plan we introduced in Could.”

For the three-month interval ending Oct. 2, gross sales have been $1.78 billion, in contrast with $1.69 billion in 2020’s third quarter. The corporate logged almost $152 million in income in consequence, up from $103 million the identical time final yr. 

By class, the Champion brand continued to shine the brightest, with international revenues up 33 % throughout the quarter, in contrast with the identical time final yr, or up 20 % in contrast with 2019’s pre-pandemic ranges. 

“I don’t see Champion slowing down anytime quickly,” Bratspies mentioned on Thursday morning’s convention name with analysts. He pointed to energy in Champion’s European footwear and kids’s companies. “And we’re type of simply getting began in Australia. I’ve excessive expectations for and what it will probably do for us over time.” 

Champion activewear

Champion is owned by HanesBrands.
Courtesy Picture Black Horse Studio

Activewear additionally had one other robust quarter, rising $138 million throughout the three-month interval, or 42 %, year-over-year, with double-digit progress in each the Champion and Hanes manufacturers. 

Innerwear gross sales fell 11 % throughout the quarter, or $90 million, year-over-year, however solely due to the overlap from final yr’s private protecting gear gross sales. (The corporate made the choice to exit the PPE business earlier this year.) Excluding PPE, gross sales of males’s and kids’s innerwear, together with socks, elevated mid- to high-single digits throughout the quarter, whereas gross sales of ladies’s innerwear grew about 20 %, in contrast with 2020 ranges. In contrast with 2019, complete U.S. innerwear revenues elevated 25 %, or $140 million, throughout the quarter, pushed by strength in shapewear, bras, socks and the boys’s enterprise. 

Whole on-line gross sales elevated 62 %, together with 50 % progress on company-owned web sites, throughout the quarter, in contrast with 2019 ranges. 

Revenues within the agency’s worldwide division additionally grew throughout the quarter, up 6 %, or $30 million, in contrast with final yr. 

Nonetheless, HanesBrands moved ahead with its beforehand introduced plans to promote its European innerwear enterprise, regardless of the roughly $500 million to $600 million in gross sales the enterprise generated in 2020. 

“The [European innerwear business] has some actually robust manufacturers and we’ve bought some actually robust groups over there,” Bratspies mentioned in February. “However for us, we now have finite assets and we’re specializing in the place we expect we are able to generate one of the best long-term return, so it’s a very good enterprise, however we’re simply questioning if it’s the precise enterprise for us proper now.”

The corporate mentioned Thursday that it had reached an settlement to promote the enterprise to an affiliate of Regent L.P. The transaction is anticipated to shut within the first quarter of 2022.

“Focusing our portfolio is essential to our long-term progress and promoting our European innerwear enterprise represents a big step ahead in our Full Potential plan,” Bratspies mentioned Thursday. “Our European innerwear enterprise has robust manufacturers and nice individuals and this transaction helps place them for long-term success. I wish to thank our European innerwear associates for his or her dedication and all they’ve executed for the corporate through the years.”

In the meantime, the corporate mentioned it continues to develop touchpoints throughout China. As well as, Bratspies advised analysts on Thursday’s name that customers are starting to return to shops in Japan and Australia as native lockdowns ease. 

HanesBrands expects web gross sales for the present quarter to be between $1.71 billion and $1.78 billion. That’s a 3 % progress, in contrast with the identical time a yr in the past. For the yr, the retailer is anticipating web gross sales to develop about 11 % over the prior yr’s midpoint, to between roughly $6.76 billion and $6.83 billion. 

However buyers weren’t glad. Shares have been down almost 2 % at first of Thursday’s session. Headwinds embody continued provide chain pressures, corresponding to increased transportation and freight prices. Ocean freight bills are up between 400 and 500 %. Bratspies mentioned the corporate is assuaging pressures by elevating costs globally. 

“We all know we now have pricing energy,” he mentioned. 

The retailer ended the quarter with almost $874 million in money and money equivalents and $3.6 billion in long-term debt. 

Shares of HanesBrands are up 11.6 %, year-over-year. | HanesBrands’ Activewear, Champion Nonetheless Sturdy, Plans to Elevate Costs – WWD


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