Dive Brief:
- HanesBrands reported net sales of $995 million in its second quarter, representing a 4% decrease from $1 billion year over year, according to a press release Thursday.
- Following the sale of Champion, HanesBrands said in the release it was looking to create “the right cost structure for a simpler, more focused business.”
- This was HanesBrands’ first earnings report after it announced it would sell Champion to Authentic Brands Group. In the release, the company said it was on track to complete the sale in the second half of 2024, and still expects net proceeds from the deal to total about $900 million.
Dive Insight:
Q2 was the first quarter that the global Champion and U.S. outlet store businesses began being classified as discontinued operations. However, HanesBrands plans to operate the Champion business in Japan as a licensee until January 2025, per its agreement with Authentic, according to the release.
“These strategic actions fundamentally strengthen the Company, creating a more focused, simplified business with more consistent revenue growth, higher margins, strong cash generation, a strong competitive position, and multiple levers to unlock shareholder value over the next several years,” HanesBrands said in the release.
With the sale of Champion, the company has reiterated its intention to grow its innerwear segment. In the release, the company said it gained another 40 basis points of market share for innerwear, due in part to its increased marketing investment and innovation in for the Hanes, Maidenform and Bali brands.
CEO Steve Bratspies said the company’s U.S. innerwear performance was better than expected.
“We’ve taken several strategic actions that have fundamentally strengthened and simplified our business, better positioning the Company for consistent revenue growth, higher profit margins, and strong cash generation,” Bratspies said in the release. “We’ve also identified additional savings opportunities to drive a step-function change in our cost structure, which combined with our current margin improvement initiatives and lower interest expense gives us visibility to strong double-digit EPS growth over the next several years.”
HanesBrands U.S. net sales decreased by 1% year over year, and its international net sales decreased 4%.
