Bonds parent company HanesBrands has recorded a net sales loss of US$74.4 million globally in the second quarter of 2023, hitting $1.44 billion.
The company has cited a continued macro-driven slowdown in consumer spending impacting Australia, with international sales down 3.9% to $407 million compared to the second quarter of 2022. This included an $18 million unfavourable impact from foreign exchange rates.
As well as Bonds, HanesBrands also owns and operates Berlei in Australia - predominately via wholesale - and Champion.
According to global company, innerwear growth in the Americas and Champion growth in Asia essentially offset the decline in Australia, which was driven by a very challenging macroeconomic environment.
Profit from international sales dropped 41.8% to $32.5 million, with a 3-digit slump in activewear profit by 113.5% to negative $3 million. Global activewear sales dropped 19% to $267.5 million.
The company’s total gross profit was $483 million, down 16%, with a gross margin drop of 430 basis points to 33.5% compared to the prior year.
Meanwhile, the global business reduced its inventory by 12%, or $255 million, compared to Q2 2022, and generated cash flow from operations of $88 million in the quarter and $132 million year-to-date.
HanesBrands now expects net sales from continuing operations of approximately $5.80 billion to $5.90 billion by the end of 2023, which includes a projected headwind of approximately $37 million from changes in foreign currency exchange rates. This represents an approximate 6% decline as compared to the prior year on both a constant currency and reported basis.
CEO Steve Bratspies said the second-quarter result is in line with the company’s outlook.
“We’re confident in our ability to exit the year with gross margin in the high 30% range, generate $500 million of operating cash flow, and pay down more than $400 million of debt, despite the difficult apparel market, particularly in Australia and the U.S. activewear category, which caused us to adjust our second-half outlook.
“Looking at our Full Potential strategy, we’re progressing on or ahead of plan in several areas, while other areas are not delivering results in the timeline we anticipated.
“We’re taking a number of actions, including additional cost-saving initiatives, to improve performance as well as actively looking across the business at additional options to enhance shareholder value.”
There are 82 Bonds stores in Australia and 52 outlets - with four of those in New Zealand. Champion operates nine outlets and eight stores in Australia.