A prominent apparel manufacturer based in the United States, HanesBrands reported a 9.6 per cent decline in revenue to $5.63 billion during FY23 from $6.23 billion in FY22.
The company’s sales during Q4 FY23 declined by 12 per cent to $1.3 billion compared to the previous year. On an organic constant currency basis, net sales experienced a decline of approximately 10 per cent.
The global Champion brand, a crucial segment for HanesBrands, faced a 23 per cent decrease in sales on a reported basis in Q4 FY23 and a 24 per cent decline on a constant currency basis compared to the prior year. Sales in the US saw a significant 30 per cent decline, while international sales decreased by 14 per cent on a reported basis and 15 per cent on a constant currency basis. Despite witnessing sales growth in China and Latin America, declines in Europe, Japan, and Canada overshadowed these gains, as stated by HanesBrands in a press release.
In Q4 FY23, gross profit amounted to $494 million, marking a slight decrease of about 2 per cent, while gross margin significantly improved 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, indicating an improvement of nearly 395 basis points compared to the same quarter in 2022.
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.
In terms of segments, innerwear sales decreased marginally by about 1 per cent, while activewear sales experienced a 24 per cent decline. International sales decreased by 9 per cent, including a $6 million impact from unfavorable foreign exchange rates.
HanesBrands surpassed its 2023 inventory and operating cash flow goals, ending the year with inventory under $1.4 billion, exceeding the company’s $1.5 billion target and marking a 31 per cent year-over-year improvement in inventory management.
Steve Bratspies, CEO, says, though the company’s Q4 performance did not meet expectations, it got several positive indicators that shows margins and leverage have reached a positive inflection point.
