HanesBrands faced a significant decline in sales during the third quarter, with revenue dropping by 9.5% to $1.51 billion. The company’s Champion brand was hit particularly hard, experiencing a 19% decrease compared to the same period last year. While there were areas of growth in Latin America and Japan, as well as steady performance in U.S. innerwear, these gains were overshadowed by a decline in U.S. activewear. Additionally, macroeconomic factors impacting consumer spending led to decreases in sales in Australia, Europe, and parts of Asia.

On a reported basis, Champion’s global sales saw a 19% decline, including a 16% decrease in sales within the United States due to ongoing challenges in the activewear market. Internationally, sales dropped by 22% on a reported basis. Although there were increases in sales in Japan, these were offset by decreases in Europe. This decline was attributed to cautious ordering from wholesale partners and the macroeconomic challenges affecting demand in parts of Asia and Australia.

The company’s loss from continuing operations for the quarter amounted to approximately $39 million, or $0.11 per diluted share, compared to income of $80 million, or $0.23 per diluted share, in the previous year. Despite these challenges, HanesBrands remains committed to improving core fundamentals and exploring strategic options to enhance shareholder value. In September, the company announced its consideration of various options for its struggling Champion brand, including a potential sale.

Steve Bratspies, CEO of HanesBrands, acknowledged the difficult global macroeconomic environment and its impact on sales. However, he highlighted the meaningful improvement in key performance metrics and the evaluation of strategic alternatives for the global Champion business. Bratspies emphasized the success of innerwear innovation and market share growth, as well as the improvement in adjusted margins through cost savings and efficiency initiatives. The company aims to further improve key performance metrics in the fourth quarter, with reduced inventory, consistent operating cash flow, and debt reduction.

Useful links on this topic:
1. https://www.reuters.com/article/hanesbrands-results-idUSL4N27I535
2. https://www.wsj.com/articles/hanesbrands-slumps-on-accelerating-sales-decline-11592456397