HanesBrands Reports Q1 Sales Drop, Unveils Growth Plan
HanesBrands, the global apparel manufacturer, has reported a 17% year-over-year decrease in net sales for the first quarter, totalling $1.16 billion. Despite the decline, the company has expressed confidence in its future growth, unveiling a multi-year meta-strategy aimed at accelerating earnings, reducing debt, and investing in growth initiatives. This comes amidst a challenging quarter, with global brand sales for Champion dropping by 26%. International sales fell by 17%, while U.S. sales plummeted by 35%.
HanesBrands has been proactive in addressing these challenges. It has appointed a new vice president and chief marketing officer for Champion, relaunched the Zone 93 sneaker, and introduced a sustainable collection. The innerwear business, though seeing an 8% sales decrease, gained 50 basis points of market share due to operational improvements and increased brand marketing.
The company is also exploring strategic options for its Champion business, including a potential sale or transaction. Meanwhile, sales from new product innovation in the innerwear segment grew by 19% year over year. Activewear sales, however, fell by 31% to $97 million in Q1, primarily due to shifting the Champion kids' business to a license model and soft consumer demand.
The decrease in net sales was also attributed to the divestment of its U.S. sheer hosiery business and unfavorable foreign exchange rates. Despite these challenges, HanesBrands has reaffirmed its full-year outlook, forecasting net sales of between $5.35 billion to $5.47 billion, about a 4% decrease over the prior year.
HanesBrands' first quarter results reflect a challenging market, but the company remains optimistic. With its multi-year meta-strategy, strategic appointments, and product innovations, HanesBrands is positioning itself for future growth. The exploration of strategic options for the Champion business further underscores the company's commitment to maximizing shareholder value.
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