Champion Pushes HanesBrands to Win
The suddenly hip active brand saw its fourth-quarter revenues shoot up more than 50 percent, outside the mass channel.
Champion’s 100th year in business is starting off on an up note.
The brand’s resurgence helped lift parent company HanesBrands Inc. in the fourth quarter and had Wall Street smiling as shares of the firm shot up 16.7 percent to $18.17 in midday trading.
The company said its “coordinated global strategy to elevate the Champion brand resulted in accelerated growth. In the fourth quarter, global Champion revenue in constant currency increased more than 50 percent, excluding the U.S. mass channel. For the year, global Champion sales excluding mass were $1.36 billion, up from approximately $1 billion for 2017.”
Michael Binetti, an analyst at Credit Suisse, who had been disappointed that Champion’s third-quarter sales, applauded the brand’s more recent performance.
“Champion finally delivered a big quarter, with the brand up double digits globally,” he said.
The firm’s activewear sales rose 13.5 percent in the quarter to $485.4 million.
HanesBrands’ overall net profits for the quarter totaled $161.6 million, or 44 cents a share, and compared with year-ago losses of $384.6 million, or $1.06. Adjusted earnings per share of 48 cents a share came in 2 cents ahead of the 46 cents analysts projected.
Sales for the three months ended Dec. 29 rose 7.5 percent to $1.77 billion.
In addition to the Champion growth spurt, the company’s gains came from international diversification and e-commerce.
For the full year, HanesBrands pulled in $553.1 million in net income with a 5.1 percent rise in sales to $6.8 billion.
In the coming year, the midpoint of the firm’s projections called for net earnings growth of 7 percent per diluted share and about 2 percent in sales expansion.
The midpoint for the firm’s innerwear sales guidance calls for a 2 percent decline.
Gerald W. Evans Jr., chief executive officer, told analysts on a conference call that the company was taking “a more conservative view” for its U.S. innerwear business “given the ongoing uncertainty in the U.S. midtier and department store channel.”
Evans stressed the company’s progress diversifying, but acknowledged that investors were focusing on the innerwear business, which is both being streamlined and juiced up with more marketing.