Operating profit for HanesBrands’ Activewear segment fell 54 percent to $24,853,000 from $53,491,000 for the period ended Sep. 30. Activewear sales tumbled 17 percent to $383,600,000 from $461,043,000 as the segment experienced declines across most channels and brands that were driven by ongoing category headwinds, soft consumer demand and excess channel inventory.
Champion sales in the US, which fell by 16 percent, were affected by the short-term impact of the group’s ongoing strategic actions designed to strengthen the brand for long-term profitable growth by adopting a more disciplined product and channel segmentation approach. Global Champion brand sales declined by 20 percent on a constant currency basis. Sales fell in Europe due to cautious ordering from retailers but increased in Japan. Macroeconomic headwinds hurt demand for Champion-branded products in parts of Asia and Australia. In mid-September, the company announced it was undergoing an evaluation of its Champion business that could result in a sale or continuing as part of Hanesbrands.
Overall, HanesBrands reported a net loss of $38,799,000 against a profit of $80,101,000 in Q3, as total sales fell 9.5 percent to $1.51 billion from $1.67 billion. Gross margin slid 260 basis points to 31.1 percent from 33.7 percent. The company did continue to see input cost inflation ease as it lowered its year-over-year inventory level by 29 percent, which was aided by stronger SKU discipline and lifecycle management coupled with ongoing sell-throughs of higher-cost inventory.
