Citing a “massive shift in consumer spending behavior,” Hanesbrands Inc., the parent of Champion and Duofold, reported revenues in its fiscal fourth quarter fell 11% to $1.04 billion from $1.16 billion a year ago. Sales declined in each business segment, 11% in innerwear, 8% in outerwear, 20% in hosiery, and 9% internationally.
Gross margins eroded 10 basis points to 31.6% due to the sales declines as well as higher cotton and oil-related costs. Net profits fell 64% to $17.9 million, or 19 cents per share, hurt by charges tied to its shift to offshore sourcing. Excluding the charges, non-GAAP diluted EPS increased 32% to 50 cents a share, benefiting from favorable selling, general and administrative expense timing and one-time retroactive duty refunds.
Company Chairman and CEO Rich Noll called Champion one of a “few bright spots” for the year as sales for the brand increased for the period. Hanes men's underwear, international and Playtex also grew. Overall sales fell 5% in the year with particular weakness in intimate apparel. Looking ahead, Hanesbrands expects to help mitigate the economic conditions by implementing a gross domestic price increase averaging 4% in the first week of February on the strength of its brands.