WINSTON-SALEM - HanesBrands has reported flat sales for its fourth quarter as it exited its C9 Champion business in the mass retail channel and its DKNY license for intimate apparel. Despite this, full year sales nudged up representing the second consecutive year of constant-currency organic sales growth.
For the fourth quarter ended December 2019, net sales of $1.75 billion decreased 1% while constant-currency organic sales increased slightly. For the full year, net sales increased 2% to $6.97 billion and represented the second consecutive year of constant-currency organic sales growth.
Fourth-quarter EPS and adjusted EPS excluding actions were each $0.51, increases of 24% and 13%, respectively.
“HanesBrands delivered a solid fourth quarter right in line with our guidance and concluded a very successful year with record operating cash flow, significantly reduced debt, continued organic revenue growth, and strong underlying business fundamentals,” said Hanes Chief Executive Officer Gerald W. Evans Jr. “Looking forward, we expect to create meaningful shareholder value using our strong balance sheet, stabilized Innerwear profitability, and Champion, International and consumer-directed growth. We view 2020 to be an inflection point for sales, profit and EPS growth rates that accelerate down the P&L.”
While the company has exited its C9 Champion business in the mass retail channel and its DKNY license for intimate apparel, the company expects continued growth in 2020 for its underlying business.
Global Champion sales, excluding C9 Champion in the U.S. mass channel, totaled $1.9 billion in 2019, an increase of 40 per cent over last year as a result of expanded product offerings and increased distribution. With balanced growth in the fourth quarter, Champion sales increased 22% both domestically and internationally.
Total International organic sales increased 10 per cent in the fourth quarter and 12 per cent for 2019. In the quarter, sales increased in all International regions, including the Americas, Asia, Australia and Europe.
Innerwear segment sales decreased 4 per cent in the fourth quarter while operating profit increased 5 per cent. The fall in sales was a result of earlier-than-planned disruption from ongoing store resets in the mass channel that are expected to generate increased space and share beginning in the second half of 2020.