HanesBrands reported a 9.5% contraction in third-quarter sales to $1.51 billion, as the U.S. apparel firm’s Champion brand faced another tumultuous quarter, down 19% on the same period last year.
On a constant currency basis, growth in Latin America and Japan, as well as consistent performance in U.S. innerwear was more than offset by a decrease in U.S. activewear, the continued macroeconomic-driven slowdown in consumer spending impacting Australia, as well as decreases in Europe and parts of Asia, the North Carolina-based company said.
Global Champion brand sales decreased 19% on a reported basis, with U.S. sales dropping 16% driven by the “continued challenging activewear market dynamics.”
Internationally, sales plummeted 22% on a reported basis, with sales increases in Japan more than offset by decreases in Europe, due to the expected cautious ordering from wholesale partners, as well as the macroeconomic headwinds impacting demand in parts of Asia and Australia.
Loss from continuing operations totaled approximately $39 million, or $0.11 per diluted share, compared to income from continuing operations of $80 million, or $0.23 per diluted share, last year.
“We’ve continued to drive improvement in core fundamentals while simultaneously assessing our business and options to unlock shareholder value,” said Steve Bratspies, CEO, HanesBrands, which announced in September it is mulling “strategic options” for its suffering Champion brand, including a potential sale.
“Despite the difficult global macroeconomic environment, which continues to pressure sales, we delivered meaningful improvement across key performance metrics and initiated an evaluation of strategic alternatives for our global Champion business. Our innerwear innovation is hitting the market and we’re gaining market share. Adjusted margins continue to improve as input cost inflation eases and we see the benefits of cost savings and efficiency initiatives. We’re reducing inventory, generating operating cash flow in line with historical levels, and paying down debt as planned. We expect further improvement in these key performance metrics in the fourth quarter.”
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