HanesBrands net sales of 995 million dollars decreased around 4 percent or by 1 percent on an organic constant currency basis with better-than-expected innerwear sales in the US essentially offset by the expected macroeconomic headwinds in Australia.
Loss for the quarter expanded to approximately 137 million dollars or 39 cents per diluted share, while adjusted income was 53 million dollars or 15 cents per diluted share.
“We delivered solid second-quarter results in a challenging consumer and apparel market, including better-than-expected US innerwear performance and margin expansion,” said Steve Bratspies, HanesBrands CEO in a statement.
Highlights of HanesBrands Q2 results
Gross profit and gross margin for the quarter were 307 million dollars and 30.8 percent, respectively, while adjusted gross profit increased 11 percent to 396 million dollars and adjusted gross margin of 39.8 percent increased approximately 525 basis points.
Operating loss and operating margin were negative 63 million dollars and negative 6.3 percent, respectively. Adjusted operating profit increased 46 percent to 126 million dollars and adjusted operating margin increased 430 basis points to 12.7 percent.
The company’s US net sales decreased 1 percent as compared to prior year. The company said that it gained another 40 basis points of innerwear market share in the quarter. Its Hanes Originals and Maidenform M innovation product lines delivered strong year-over-over sales growth. The company also launched Bali Breathe, its biggest innovation behind the brand in over a decade.
International net sales decreased approximately 4 percent on a reported basis but increased 2 percent on a constant currency basis compared to prior year with growth in the Americas and Asia more than offsetting the expected macroeconomic-driven decline in Australia.
HanesBrands expects FY24 sales to decline
For fiscal year 2024, the company currently expects net sales of approximately 3.59 billion dollars to 3.63 billion dollars. At the midpoint, this represents an approximate 4 percent decrease on a reported basis and an approximate 2 percent decrease on an organic constant currency basis.
GAAP operating profit is expected to range between approximately 151 million dollars to 171 million dollars and adjusted operating profit between approximately 395 million dollars to 415 million dollars. The company forecasts GAAP loss per share of approximately 41 cents to 35 cents and adjusted earnings per share of approximately 31 cents to 37 cents.
For third-quarter, the company expects net sales of approximately 920 million dollars to 950 million dollars, an approximate 3 percent decrease and an approximate 1 percent decrease on an organic constant currency basis.
GAAP operating profit is expected to be approximately 85 million dollars to 100 million dollars, while adjusted operating profit to be around 105 million dollars to 120 million dollars.
GAAP earnings per share are expected to be approximately 3 cents to 8 cents and adjusted earnings per share of approximately 9 cents to 14 cents.