HanesBrands’ net sales decreased 9.5% to $1.5 billion in the third quarter, which it attributed to a challenging global macroeconomic environment, the company announced Thursday.
The company’s innerwear segment remained flat in the U.S., but those results were “more than offset” by the decrease in its activewear segment in the region, per the release.
The Champion business declined 19% globally. Hanes announced in September it was exploring options for the business, including a potential sale. The move is part of Hanes' plan to position the activewear brand for long-term profitable growth through a “more disciplined” product and channel segmentation approach.
On the earnings call, Hanes CFO Scott Lewis said it would take “a few more quarters” to see their turnaround efforts regarding Champion take effect.
In the U.S.,Champion sales decreased 16%, which the company said was due to a challenging activewear market.
Hanes and G-III Apparel Group inked a licensing deal for the Champion and C9 businesses earlier this year, under which G-III will design, produce and distribute the brands in North America.
In general, Hanes’ activewear category decreased 17%, with declines felt across most channels and brands, per the release.
Hanes has experienced challenges with activewear consistently this fiscal year.
“Despite the difficult global macroeconomic environment, which continues to pressure sales, we delivered meaningful improvement across key performance metrics and initiated an evaluation of strategic alternatives for our global Champion business,” Hanes CEO Steve Bratspies said in the release. “Our innerwear innovation is hitting the market and we’re gaining market share… We’re reducing inventory, generating operating cash flow in line with historical levels, and paying down debt as planned. We expect further improvement in these key performance metrics in the fourth quarter.”
Internationally, Hanes saw sales decrease 12%. Though the company’s innerwear segment grew in the Americas region and Champion grew in Japan, those numbers were offset by a decrease in Australia and Champion decreases in Europe and parts of Asia, per the release.
Net sales for the innerwear segment fell 0.4% to $622.6 million. The category experienced changes this quarter, including the launch of M by Maidenform, a collection of innerwear targeted at younger consumers. Earlier this year, the company launched a similar effort with its Hanes Originals product line, supported by a national media campaign. The company said revenue from its product innovation, including these lines, was up 40% from the prior year.
The company’s long-term debt continues to weigh it down, however, with $3.3 billion debt for the quarter. That’s slightly down from the Q2 $3.5 billion debt bill that spurred activist investor Barington to demand the replacement of CEO Stephen Bratspies, the former Walmart exec who joined Hanes in 2020, in August.