Hanes Innerwear Q1 Profits +52.9%

New: Hanes Originals Women’s SuperSoft Comfywear. Left, Scoop Cut-Out Crop Bralette, $12.99; right Rib Banded Crop Top, $16.99. 

Hanes Innerwear division operating profits jumped 52.9% in the first quarter, while sales slipped 8.4%. Last quarter Hanes Innerwear division operating profits were up 150.5%, taken together indicating continuing improvements for underwear at one of the largest producers over the last six months.

For the quarter operating profits for the division rose to $111.1 million, up from $72.6 million in the quarter ended April 1, 2023. The company explained that “operating margin of 21.9% increased approximately 880 basis points over prior year, with brand marketing investments reaching nearly 5% of sales, its highest level in more than a decade. The year-over-year margin improvement was driven primarily by lower input costs as commodity and ocean freight inflation moderated, and the benefits of cost savings initiatives, which helped fund a 120% increase in brand marketing investments to drive consumer demand behind its product innovation launches and various new brand campaigns.”

Hanes Innerwear sales for the three months ended March 30, 2024 were $506.8 million, down from $553.1 million in the same quarter last year. Hanes said the sales results were “slightly below the company’s expectations due to a higher-than-anticipated level of inventory management actions by select retailers.” But it added, “the company’s strategy of consumer-centricity is working as it continued to gain market share and outperform the market. In the quarter, point-of-sale trends and market share gains were ahead of its expectations. The company gained another 50 basis points of market share in the first quarter, with gains across both men’s and women’s as well as both younger and older consumers.”

The results for the Innerwear division were in dramatic contrast to Hanes itself, which sells apparel in other divisions. In the first quarter the company as a whole lost $39.1 million, up from a loss of $34.4 million in the same period last year. Meanwhile sales declined 16.8% to $1.16 billion, from $1.39 billion in the same quarter last year.

As it announce the results, Hanes explained that the quarterly “Sales from new product innovation increased

19% over prior year. Brand marketing investments more than doubled over prior year to support its Maidenform M product line as well as the brand campaign behind its recently launched Hanes SuperSoft product line, which began during the NCAA basketball tournament.” — NM