Hanesbrands Inc. is a different company, following its agreement to sell the lower-margin Champion business and exit U.S. outlets.
“Hanesbrands is a powerhouse in basics and innerwear, with a global footprint. We’re relatively evenly split between men’s and women’s, and we operated in a category that is core and essential for consumers,” Stephen B. Bratspies, Hanesbrands’ CEO, said during the company’s second-quarter earnings conference call.
He said that product innovation helped Hanesbrands gain innerwear market share in the second quarter. The portfolio—Hanes, Bonds, Bali, and Maidenform—also represents the number one or two market share positions in their categories. Bratspies added that in the U.S. alone, product innovation has contributed over $500 million of sales in the last 18 months.
One example of innovation is Bali Breathe, a “light-as-air” collection of body basics that was launched on Aug. 1. Hanesbrands said Bali is America’s No. 1 national bra brand.
“Our innovation pipeline is full, giving us visibility to new product launches and brand programming into 2026,” he told analysts. The CEO also reminded Wall Street that its products are available in every channel, plus its manufacturing and sourcing operations gives Hanesbrands a “powerful asset base and capability that we are already leveraging to further widen our competitive moat to extent our market share lead, and to generate consistent top line growth over time.”
Bratspies also emphasized that the company is confident of achieving further margin improvement.
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And while Bratspies said retailers are still cautious on inventory, he emphasized that Hanesbrands is till gaining shelf space with retailers.
“We are continuing to gain shelf space, both on a permanent basis and on a promotional basis. So, when you think about the promotions for back-to-school, holiday, share of displays on the floor, we’ve done very well from a share perspective,” Bratspies said.
As for the divestiture of Champion and completion of the exit of U.S. outlet stores in July, those two moves allow the company to change its overall cost structure and improve operational efficiency. That efficiency includes optimization of its supply chain by exiting several manufacturing distribution facilities, which will further simplify operations, reduce overhead, and improve areas such as customer service and in-stocks.
The CEO also said that the outlet operation “has not really been used to clear excess inventory. There’s a little bit that goes through there, but taking [the outlets] out of our portfolio is not going to create a how do we clear inventory problem for us going foward.”
He also explained that while the company has been reducing its store count by 10 or 20 percent over the last couple of years, “these stores do not have a lot of volume They’re not profitable.”
What does work for Hanesbrand is its position as a “wholesaler. That’s what we do really, really well.”
Looking ahead, Bratspies said the company will be expanding its portfolio, citing Hanes in the medical scrubs arena as one example. He said there are other adjacent categories that the Hanes brand can play in, as well as growing globally. “We’re going to tap growth from multiple vectors, and we think there’s a lot of different areas that can help us get there,” he said.
He also said consumers are buying around events, and therefore are looking for promotional pricing. The good news is that it’s not an “overly pressure packed promotional environment right now. It’s more everyone’s being smart about how we can drive volume and how we can meet consumers needs as we go forward.”
For the second quarter ended June 29, the company posted a net loss of $298.4 million, or 85 cents a diluted share, versus a year ago net loss of $22.5 million, or 6 cents. Net sales fell 3.8 percent to $995.4 million from $1.04 billion. For the six months, the net loss was $337.5 million, or 96 cents a diluted share, versus a net loss of $56.9 million, or 16 cents, a year ago. Net sales were down 7.6 percent to $1.77 billion from $1.92 billion.
For the third quarter ending Sept. 28, 2024, the company guided adjusted earnings per share from continuing operations to between 9 cents and 14 cents, with net sales in the range of $920 million to $950 million. For the full year ending Dec. 28, 2024, adjusted earnings per share from continuing operations were forecasted at between 31 cents to 37 cents, with net sales in the range of $3.59 billion to $3.63 billion. Forecasts have been adjusted to reflect the reporting of the Champion business, sold in July, as a discontinued operation.