In Q2 FY23, global Champion brand sales decreased 16 per cent on a reported basis compared to the prior year, with a 25 per cent decline in the US and a 1 per cent decline internationally. In constant currency, global Champion brand sales fell 15 per cent, with the decline primarily driven by challenging activewear market dynamics and near-term impacts from the company’s strategic brand-related actions in the US, HanesBrands said in its Q2 FY23 results.

Gross Profit fell by 16 per cent to $483 million in Q2 FY23, and gross margin declined 430 basis points to 33.5 per cent compared to the prior year. Selling, general, and administrative expenses declined by 3 per cent to $413 million compared to last year. Operating profit for Q2 2023 was $69 million with an operating margin of 4.8 per cent, compared to $147 million and 9.7 per cent respectively in the prior year. Adjusted Operating profit fell to $87 million from $154 million in Q2 2022, with an adjusted operating margin of 6.1 per cent, a decline of approximately 405 basis points from the prior year.

In the business segment summary, innerwear sales increased by 3 per cent compared to the prior year, exceeding the company’s outlook, with an operating margin of 17.6 per cent that increased 440 basis points sequentially. Activewear sales declined by 19 per cent compared to the prior year, with the operating margin for the segment falling by 810 basis points to minus 1.2 per cent.

International sales decreased by 4 per cent on a reported basis, including the $18 million impact from unfavourable foreign exchange rates, with an operating margin for the segment of 8.0 per cent, down 520 basis points compared to the prior year.

“We reported second-quarter results in line with our outlook. We also delivered sequential gross margin improvement, further reduced inventory, generated positive operating cash flow, and began paying down debt earlier than expected,” said Steve Bratspies, CEO. “We’re confident in our ability to exit the year with gross margin in the high 30 per cent range, generate $500 million of operating cash flow, and pay down more than $400 million of debt, despite the difficult apparel market, particularly in Australia and the US activewear category, which caused us to adjust our second-half outlook.”

Fibre2Fashion News Desk (DP)