HanesBrands net sales of 1.16 billion dollars were at the midpoint of the company’s expected range, a decrease of approximately 17 percent. On an organic constant currency basis, net sales decreased approximately 15 percent compared to last year.
However, operating profit and operating margin in first-quarter were 52 million dollars and 4.5 percent, while adjusted operating profit of 84 million dollars increased 32 percent over prior year, and adjusted operating margin of 7.3 percent increased approximately 270 basis points.
“We delivered solid first quarter results with sales at the midpoint of our outlook, better-than-expected adjusted operating profit, positive cash flow generation and further reduction of our leverage. With the year unfolding as anticipated and our profit visibility, we reiterated our outlook for the full-year,” said Steve Bratspies, the company’s CEO.
Highlights of HanesBrands Q1 results
Global Champion brand sales were in line with the Company’s expectation, including growth in Japan, China and Latin America. As compared to prior year, global Champion brand sales decreased 26 percent on a reported basis and 25 percent on a constant currency basis. US sales decreased 35 percent and internationally, sales decreased 17 percent on a reported basis and 16 percent on a constant currency basis.
Constant currency sales increased in Japan, China and Latin America, which were more than offset by decreases in Europe and Australia as macroeconomic headwinds continued to impact demand in these regions.
Gross profit and adjusted gross profit were both 461 million dollars, representing an increase of approximately 2 percent over prior year. Gross margin and adjusted gross margin were both 39.9 percent, representing an increase of 750 basis points and 720 basis points, respectively.
Net loss totaled approximately 39 million dollars or 11 cents per diluted share compared to net loss of 34 million dollars or 10 cents per diluted share, last year. Adjusted net loss was 7 million dollars or 2 cents per diluted share compared to 21 million dollars or 6 cents per diluted share, in first-quarter 2023.
The company’s innerwear sales decreased 8 percent, activewear sales decreased 31 percent or 97 million dollars, international sales decreased 12 percent and international sales decreased 9 percent on a constant currency basis compared to prior year.
In constant currency, growth in Latin America, Japan and China were more than offset by decreases in Europe and Australia as macroeconomic headwinds continue to impact demand in these regions.
HanesBrands maintains outlook
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 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 second quarter, the company expects net sales of approximately 1.335 billion dollars to 1.375 billion dollars. At the midpoint, this represents an approximate 6 percent decrease on a reported basis and an approximate 3 percent decrease on an organic constant currency basis.
The company expects GAAP operating profit of approximately 96 million dollars to 111 million dollars, adjusted operating profit of approximately 115 million dollars to 130 million dollars, GAAP earnings per share of approximately 2 cents to 6 cents and adjusted earnings per share of approximately 7 cents to 11 cents.
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