HanesBrands Inc., the renowned owner of popular brands like Champion, Playtex, and Wonderbra, has announced a growth of 2.8% in sales for the fourth quarter of 2020. The company remains optimistic about the current quarter, indicating positive expectations. HanesBrands achieved net sales of $1.8 billion in the fourth quarter, compared to $1.75 billion in the same period the previous year. Notably, this increase in sales includes $28 million from the sale of personal protective equipment (PPE).

Of particular significance is the notable growth in HanesBrands’ U.S. innerwear sales, which experienced a 13% year-over-year increase, excluding revenues from PPE. When adjusting for the discontinuation of HanesBrands’ C9 Champion mass program and DKNY intimate apparel license, innerwear sales increased by a striking 20% (or 16% excluding PPE).

The company’s activewear segment also witnessed growth, with sales increasing by a noteworthy 7%. The success in this segment can be attributed to the strong performance of the Champion brand and increased sales through online platforms, wholesale partnerships, and distributor channels. On the international front, HanesBrands’ revenues in this sector rose by 2% (or 1% excluding PPE sales). Although Australia, Canada, and Latin America experienced growth, the ongoing pandemic posed challenges for the company’s operations in Asia and Europe, leading to a decline of approximately 3% in international sales when factoring in currency conversions.

Despite the positive sales growth, HanesBrands reported a net loss of $332.1 million for the fourth quarter, compared to a net income of $185 million in the same period the previous year. During the quarter, the company conducted a comprehensive business assessment and initiated its “Full Potential” plan, a strategic effort to drive global growth for the Champion brand and expand the innerwear business with additional brands and products. HanesBrands also aims to enhance its e-commerce capabilities while streamlining its global portfolio. As part of this streamlining endeavor, the company has recognized that PPE is not a long-term growth opportunity and is actively exploring strategic alternatives for its European innerwear business.

CEO Steve Bratspies expressed satisfaction with the company’s progress, highlighting the solid sales growth in the fourth quarter. Bratspies also emphasized the strong market share performance in the innerwear and activewear segments. For the full fiscal year, HanesBrands reported net sales of $6.7 billion, which represents a decrease of 4.3% compared to the previous year. The company also reported a net loss of $75.6 million for the year, in contrast to a net income of $600.7 million in the prior year.

Looking ahead, HanesBrands predicts net sales for the first quarter to range between $1.485 billion and $1.515 billion, reflecting a year-over-year growth of 14% at the midpoint of the guidance. Both reported and adjusted earnings per share for the first quarter are projected to fall between $0.24 and $0.27. Following the announcement of the company’s quarterly results and unveiling of new strategic initiatives, HanesBrands stock price skyrocketed by nearly 25%, indicating investors’ positive response to the company’s sales growth and future plans.

Useful links:
1. HanesBrands Official Website
2. HanesBrands 2020 Annual Report