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Diving certificate:
- HanesBrands reported net sales of $995 million in the second quarter, a decrease of 4% from the same period last year of $1 billion, according to a press release on Thursday.
- Following the Sale of ChampionHanesBrands said in the press release that the company is trying to create “the right cost structure for a simpler, more focused business.”
- This was HanesBrands’ first earnings report after the company announced it would sell Champion to Authentic Brands Group. In the press release, the company said it is on track to complete the sale in the second half of 2024 and continues to expect net proceeds from the deal to total approximately $900 million.
Diving insight:
The second quarter was the first quarter in which the global Champion business and U.S. outlet stores were classified as discontinued operations. However, HanesBrands plans to operate the Champion business in Japan as a licensee under its agreement with Authentic through January 2025, the press release said.
“These strategic actions fundamentally strengthen the company and create a more focused, simplified business with more consistent revenue growth, higher margins, strong cash generation, a strong competitive position and numerous levers to increase shareholder value over the next few years,” HanesBrands said in the press release.
With the sale of Champion, the company has reaffirmed its intention to grow its underwear segment. In the press release, the company stated that it gained an additional 40 basis points of market share in the underwear category, due in part to its increased marketing investment and innovation in the Hanes, Maidenform and Bali brands.
CEO Steve Bratspies said the company’s performance in the U.S. underwear segment was better than expected.
“We have taken several strategic actions that have fundamentally strengthened and simplified our business and better positioned the company for consistent revenue growth, higher profit margins and strong cash generation,” Bratspies said in the press release. “We have also identified additional savings opportunities to drive a step change in our cost structure, which, combined with our current margin improvement initiatives and lower interest expense, will enable us to deliver strong double-digit EPS growth over the next few years.”
HanesBrands’ U.S. net sales decreased 1%, while international net sales decreased 4%.
