American firm HanesBrands' revenue at $5.63 bn in FY23

The global Champion brand, a key segment for HanesBrands, experienced a 23 per cent decrease in sales on a reported basis in Q4 FY23 and 24 per cent on a constant currency basis compared to the previous year. US sales saw a significant 30 per cent decline, while international sales dropped 14 per cent on a reported basis and 15 per cent on a constant currency basis. Despite sales growth in China and Latin America, declines in Europe, Japan, and Canada overshadowed these gains, HanesBrands said in a press release.

Gross profit for Q4 FY23 was $494 million, a slight decrease of about 2 per cent, but gross margin improved significantly by 400 basis points to 38.1 per cent. Adjusted gross profit stood at $495 million, with an adjusted gross margin of 38.2 per cent, marking a nearly 395 basis point improvement compared to the same quarter in 2022.

Selling, general and administrative expenses saw a 10 per cent reduction to $398 million. Operating profit and margin for the fourth quarter improved to $96 million and 7.4 per cent, respectively, up from $60 million and 4.1 per cent in the previous year. Adjusted operating profit increased to $111 million from $83 million in Q4 FY22, with the adjusted operating margin up approximately 295 basis points over the prior year.

Income from continuing operations turned positive, totalling approximately $78 million, or $0.22 per diluted share, compared to a loss from continuing operations of $418 million, or $1.19 per diluted share, last year. Adjusted Income from continuing operations was $12 million, or $0.03 per diluted share, down from $24 million, or $0.07 per diluted share, in Q4 FY22.

Segment-wise, Innerwear sales decreased marginally by about 1 per cent, while Activewear sales took a 24 per cent hit. International sales decreased by 9 per cent, including a $6 million impact from unfavourable foreign exchange rates.

HanesBrands exceeded its 2023 inventory and operating cash flow goals, ending the year with inventory under $1.4 billion, surpassing the company’s $1.5 billion target and marking a 31 per cent YoY improvement in inventory management.

“Our fourth quarter performance did not meet our expectations as the sales environment proved to be more challenging than expected. However, we saw several positive indicators that give us confidence margins and leverage have reached a positive inflection point and demonstrate progress on our strategy to simplify our business, reduce inventory, cut costs, and reignite Innerwear,” said Steve Bratspies, CEO.

Fibre2Fashion News Desk (DP)