Senior Hanesbrands’ executives remain mum on whether the company will retain or eventually divest the Champion business. Still, they confirm the brand will likely reach its low-water sales point in Q2. The completion of an inventory clean-up and a return of the brand’s largely seasonal collegiate business should brighten Champion’s outlook come Fall.
In the meantime, Hanesbrands is working to improve the brand’s fortunes and position it for long-term growth. These efforts include everything from new strategic collaborations and new product offerings to licensing out the Champion kids’ business and investing more in marketing ahead of Fall-Winter product introductions.
Global Champion sales declined by 25 percent in Q1 ended March 30 despite some emerging brand momentum in Asia. The U.S. business, which is still coping with an inventory clean-up situation and a repositioning into cleaner sales channels for future sales expansion, suffered a 35 percent sales drop. But U.S. e-commerce sales rose by 12 percent in Q1. In Europe, the wholesale channel remains ‘challenging’ for the brand, and the situation isn’t projected to wane soon. In Asia, meanwhile, sales were up in both China and Japan. The brand’s overall international segment had a 16 percent constant-currency sales decline.
Hanesbrands’ activewear segment suffered an 89 percent drop in Q1 operating profit to $1,109,000 from $9,974,000. Sales fell by 31 percent to $217.7 million from $314.9 million in the year-ago period. Period results for the company showed a wider net loss of $39.1 million against a loss of $34.4 million as overall revenues tumbled 16.8 percent to $1,156,201,000 from $1,389,410,000.
