HanesBrands, parent company to fashion brands Bonds and Champion, has recorded a 12% decrease in international sales for the third quarter of 2023, driven by macroeconomic headwinds in the Australian market.
This decrease included USD$4 million (AUD$6.2 million) from unfavourable foreign exchange rates.
The company reported its innerwear growth in the Americas and Champion growth in Japan were more than offset by a decrease in Australia. It claimed this decrease was driven by a "very challenging" macroeconomic climate.
For its core Champion business, sales decreased 22% internationally on a reported basis and 24% on a constant currency basis.
“Constant currency sales increased in Japan, which was more than offset by decreases in Europe, due to the expected cautious ordering from wholesale partners, as well as the macroeconomic headwinds impacting demand in parts of Asia and Australia,” HanesBrands wrote in a trading update.
The company’s total global sales for the quarter were USD$1.5 billion (AUD$2.3 billion), a drop of 9.5% on the prior corresponding period.
“Despite the difficult global macroeconomic environment, which continues to pressure sales, we delivered meaningful improvement across key performance metrics and initiated an evaluation of strategic alternatives for our global Champion business,” HanesBrands CEO Steve Bratspies said.
“Our innerwear innovation is hitting the market and we’re gaining market share. Adjusted margins continue to improve as input cost inflation eases and we see the benefits of cost savings and efficiency initiatives.
“We’re reducing inventory, generating operating cash flow in line with historical levels, and paying down debt as planned.
HanesBrands has reduced overall inventory by 17% in the quarter, and 29% year-over-year, and generated cash flow from operations of USD$155 million in the quarter and USD$287 million year-to-date.
The company also reduced total debt by USD$144 million in the quarter and approximately USD$270 million year-to-date, and ended the quarter with approximately USD$1.2 billion of liquidity.
“We expect further improvement in these key performance metrics in the fourth quarter.”