Shima Seiki
Techtextil North America & Texprocess

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Industry Talk

Strong second-quarter for HanesBrands

Revenue, operating profit, operating margin and EPS from continuing operations exceed guidance. Growth driven by global Champion brand and U.S. Innerwear.

6th August 2021

Knitting Industry
 |  Winston-Salem, NC, USA

Intimate Apparel, Sports/​Activewear

HanesBrands Inc. has announced results for the second quarter of 2021, with increased sales, operating profit and cash flow driven by strong performance across its global innerwear and activewear businesses.

I’m extremely proud of the way our associates performed under challenging conditions, delivering sales, profit and earnings growth above our expectations and above the second quarter of both 2020 and 2019

Net sales from continuing operations for the second quarter ended July 3, 2021, totalled $1.75 billion, an increase of $208 million, or 13%, compared with $1.54 billion for the quarter ended June 27, 2020, which included $614 million in sales of personal protective equipment (PPE) in response to the COVID-19 pandemic. Excluding PPE, net sales increased 88% over prior year. The growth was driven by strong point-of-sales trends, the overlap of last year’s COVID-related shutdowns and the benefit of transitory items such as government stimulus. Total constant currency second-quarter net sales increased 10%.

“Our iconic brands continue to resonate with consumers around the world, and I’m very encouraged by the progress on our Full Potential growth plan,” said Chief Executive Officer Steve Bratspies. “I’m extremely proud of the way our associates performed under challenging conditions, delivering sales, profit and earnings growth above our expectations and above the second quarter of both 2020 and 2019. We are seeing strong momentum across our business and have raised our outlook for the second half of the year.”

Second-Quarter 2021 Business Segment Summaries

Innerwear (vs 2020). Sales decreased $314 million, or 29% due to the overlap of last year’s $614 million of PPE sales. Basics revenue increased 48% with double-digit growth in each product category while intimates revenue increased 150% with triple-digit growth in both bras and shapewear. Excluding PPE, Innerwear sales increased 62% over last year driven by strong point-of-sale growth, the overlap of last year’s COVID-related shutdowns as well as the benefit of several transitory items, including retailer inventory restocking, government stimulus and pent-up consumer demand. Operating margin of 23.8% decreased 400 basis points compared to prior year due to fixed-cost deleverage from lower sales, higher expedite costs from stronger-than-expected demand in basics and intimates as well as increased investments in brand marketing.

(vs 2019). Sales increased $123 million, or 19%, compared to second-quarter 2019, with comparable double-digit growth in both basics and intimates. The growth was driven by strong underlying point-of-sale growth, yielding approximately 160 basis points of market share gains, as well as the benefit of certain transitory items, such as retailer inventory restocking and government stimulus, which drove category growth rates above historical levels. Operating margin expanded 150 basis points to 23.8% driven by volume leverage and sales mix, which more than offset higher expedite costs and increased investments in brand marketing.

Activewear (vs 2020). Activewear sales grew $236 million, or 140% over prior year driven by growth in both the Champion and Hanes brands. The company experienced strong point-of-sale trends across several channels in the quarter. Sales also increased in the sports and college licensing business. The segment benefited from strong pent-up consumer demand as pandemic restrictions were lifted, as well as from government stimulus payments. Segment operating margin of 10.2% increased 1,360 basis points over prior period driven by fixed-cost leverage from higher sales, which more than offset higher brand marketing investment.

(vs 2019). Activewear revenue increased $53 million, or 15%, driven by growth across the online, wholesale and distributor channels, which more than offset lower sales in the sports and college licensing business. By brand, sales increased in both the Champion and Hanesbrands in the quarter, with Champion sales in the segment up 20%. Activewear’s operating margin decreased approximately 290 basis points compared to second-quarter 2019 as leverage from higher sales volume was more than offset by higher expedite and distribution costs due to stronger-than-expected demand as well as increased investments in brand marketing.

Full results, figures and outlook

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