HanesBrands net sales for the fourth quarter of 1.3 billion dollars decreased 12 percent compared to last year. On an organic constant currency basis, net sales decreased approximately 10 percent.
The company said, Champion brand sales decreased 23 percent on a reported basis, and 24 percent on a constant currency basis, as compared to prior year.
“Our fourth quarter performance did not meet our expectations as the sales environment proved to be more challenging than expected. For 2024, we believe we’re well positioned for continued margin improvement, another year of strong cash generation and continued debt reduction,” said Steve Bratspies, the company’s CEO in a statement.
HanesBrands posts drop in Q4 sales
The company attributed the decline to approximately 130 basis points due to the U.S. Hosiery divestiture and approximately 40 basis points due to the unfavourable impact from foreign exchange rates.
Constant currency sales decline was due to the more challenging than expected global consumer environment, particularly in the U.S. activewear market and in Australia.
The company’s innerwear sales decreased approximately 1 percent or approximately 7 million dollars, as compared to prior year. Activewear sales decreased 24 percent with decreases across channels and brands in the quarter.
International sales decreased 9 percent on a reported basis and approximately 7 percent on a constant currency basis compared to prior year.
The company added that Champion U.S. sales decreased 30 percent driven by the combination of challenging activewear apparel market dynamics and the expected topline headwinds from the strategic actions HanesBrands is taking to strengthen the brand and position Champion for long-term profitable growth.
Internationally, Champion sales decreased 14 percent on a reported basis and 15 percent on a constant currency basis. Constant currency sales increased in China and Latin America, which was more than offset by decreases in Europe, Japan, and Canada.
HanesBrands operational performance in Q4
Gross profit of 494 million dollars decreased approximately 2 percent while gross margin increased 400 basis points to 38.1 percent as compared to prior year. Adjusted gross profit was 495 million dollars and adjusted gross margin of 38.2 percent increased approximately 395 basis points.
Operating profit and operating margin rose to 96 million dollars and 7.4 percent, respectively. Adjusted operating profit increased to 111 million dollars and adjusted operating margin of 8.5 percent increased approximately 295 basis points over prior year.
Income from operations totaled approximately 78 million dollars or 22 cents per diluted share, while adjusted income decreased to 12 million dollars or 3 cents per diluted share.
HanesBrands projects 4 percent drop in FY24 sales
For fiscal year 2024, the company currently expects net sales of approximately 5.35 billion dollars to 5.47 billion dollars. At the midpoint, this represents an approximate 4 percent decrease as compared to prior year on a reported basis and an approximate 2 percent decrease on an organic constant currency basis.
The company expects GAAP operating profit of approximately 430 million dollars to 450 million dollars, adjusted operating profit of approximately 500 million dollars to 520 million dollars, GAAP earnings per share of approximately 22 cents to 28 cents and adjusted earnings per share of approximately 42 cents to 48 cents.
For the first quarter, HanesBrands expects net sales of approximately 1.13 billion dollars to 1.19 billion dollars. At the midpoint, this represents an approximate 16 percent decrease on a reported basis and an approximate 14 percent decrease on an organic constant currency basis.
GAAP operating profit is expected to reach approximately 45 million dollars to 65 million dollars and adjusted operating profit of approximately 60 million dollars to 80 million dollars. GAAP loss per share is forecasted of approximately 14 cents to 8 cents and adjusted loss per share of approximately 10 cents to 4 cents.
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