Hanesbrands (HBI)

 

 

Consolidated net sales were lower by $130 million or 13% in the first quarter of 2009 compared to the first quarter of 2008 as we continue to be negatively impacted by weak consumer demand related to the difficult economic and retail environment. The net sales decline in the quarter, which was at a rate that was consistent with our expectations, was driven by the economic impact of the recession. The ultimate consumers

 

 

Consolidated net sales were lower by $102 million or 5% in the six months of 2008 compared to 2007 primarily due to softer sales at retail of our intimate apparel and a shift in timing by our largest retail customers of back-to-school programs from June to July in 2008. Our Innerwear, Outerwear, Hosiery and Other segment net sales were lower by $102 million (8%), $15 million (3%), $9 million (7%) and $18 million (54%), respectively, and were partially offset by higher net sales in our International segment of $36 million (18%) and lower intersegment sales eliminations of $6 million. Although the majority of our products are replenishment in nature and tend to be purchased by consumers on a planned, rather than on an impulse, basis, softness in the retail environment can impact our results in the short-term, as it did in the six months of 2008. Sales to our retail customers during the six months of 2008 were reflective of a difficult economic and retail environment in which the ultimate consumers of our products have been limiting their discretionary spending and visiting retail stores less frequently.

 

The lower net sales in the Innerwear segment were primarily due to a decline in the intimate apparel, socks and underwear product categories. Total intimate apparel net sales were $53 million lower in the six months of 2008 compared to 2007. We believe there have been softer sales at retail of our intimate apparel product category primarily in our Hanes and secondary brands (Just My Size, barely there and Wonderbra) and private label brands. In the six months of 2008 compared to 2007, our Playtex brand intimate apparel net sales were higher by $5 million offset by lower Bali brand intimate apparel net sales of $4 million. In addition, we exited a license arrangement for a boys’ character underwear program in 2008 which accounted for $7 million of the overall decrease in net sales. We believe a large portion of the net sales decline in the six months of 2008 compared to 2007 is related to a shift in timing by our largest retail customers of back-to-school programs from June to July in 2008. The amount of our back-to-school shipments that shifted from June to July 2008 was approximately $25 million.

 

The decline in net sales for our Other segment is primarily due to the continued vertical integration of a yarn and fabric operation acquisition from 2006 with less focus on sales of nonfinished fabric and yarn to third parties which we expect to continue the remainder of this year.

 

Net sales of Champion activewear were higher the six months of 2008 compared to 2007, which mostly offset the lower sales in our casualwear product categories. Net sales in the Hosiery segment were lower primarily due to lower sales of our Hanes brand to national chains and department stores in the six months of 2008 compared to last year. Although the decline has slowed in recent years, we expect the trend of declining hosiery sales to continue consistent with the overall decline in the industry and with shifts in consumer preferences.

 

The overall lower net sales were partially offset by higher net sales in the International segment that were driven by a favorable impact of $23 million related to foreign currency exchange rates and by the growth in the European casualwear business. The favorable impact was primarily due to the strengthening of the Euro, Canadian dollar, Japanese yen and Brazilian real.

 

 

 

Consolidated net sales were lower by $52 million or 5.0% in the first quarter of 2008 compared to 2007. Our Innerwear, Outerwear, Hosiery and Other segment net sales were lower by $47 million (7.9%), $11 million (4.0%), $7 million (9.4%) and $4 million (27.8%), respectively, and were partially offset by higher segment net sales in International of $14 million (15.3%). Although the majority of our products are replenishment in nature and tend to be purchased by consumers on a planned, rather than on an impulse, basis, softness in the retail environment can impact our results in the short-term, as it did in the first quarter of 2008. Sales to our retail customers during the first quarter of 2008 were reflective of a difficult economic and retail environment in which the ultimate consumers of our products have been limiting their discretionary spending.

 

The net sales decline was broad based affecting most product categories and most customers. The overall lower net sales were primarily due to a decline in sales volume across most product categories in our key brands Hanes, Champion, Bali, Just My Size and barely there. Playtex brand net sales were flat compared to last year. Net sales in the Hosiery segment were lower primarily due to lower sales of the Hanes brand to national chains and department stores and the L’eggs brand to mass retailers and food and drug stores. We expect the trend of declining hosiery sales to continue consistent with the overall decline in the industry and with shifts in consumer preferences.

 

The lower net sales were partially offset by higher net sales in the International segment that were driven by a favorable impact of $11 million related to foreign currency exchange rates. The favorable impact was primarily due to the strengthening of the Canadian dollar, Euro, Japanese yen and Brazilian real and by the growth in the European casualwear business.

 

 

Net sales declined primarily due to the $142 million impact from the discontinuation of low-margin product lines in the Innerwear, Outerwear and International segments and a $48 million decline in sheer hosiery sales. Other factors netting to $21 million of this decline include lower selling prices and changes in product sales mix.

 

 

 

Net sales declined primarily due to the $142 million impact
from the discontinuation of low-margin product lines in the
Innerwear, Outerwear and International segments and a
$48 million decline in sheer hosiery sales. Other factors
netting to $21 million of this decline include lower
selling prices and changes in product sales mix.

 

 

 

Consolidated net sales were higher by $43 million or 1.3% in the nine month period in 2007 compared to the same nine month period in 2006. Our Outerwear, International and Other segment net sales were higher by $40 million, $8 million and $11 million, respectively, and were offset by lower segment net sales in Innerwear of $13 million and Hosiery of $2 million.

 

The overall higher net sales were partially due to growth in sales volume in Hanes brand casualwear, intimate apparel, sleepwear and socks sales, Champion brand activewear sales and Bali brand intimate apparel sales. The higher net sales were offset primarily by lower Hanes brand kids’ underwear sales, lower licensed men’s underwear sales in the department store channel and lower Playtex brand intimate apparel sales and lower sales of promotional t-shirts sold primarily through our embellishment channel.

 

The relatively flat Hosiery segment net sales in the nine month period in 2007 were significantly better than the historical trend of a sustained decline in overall industry sales for the last several years.

 

The higher net sales from our Other segment primarily resulted from an immaterial change in the way we recognized sales to third party suppliers in the same nine month period in 2006. The full year change was reflected in the same nine month period in 2006 with a $5 million impact on net sales and minimal impact on net income.

 

 

Consolidated net sales were higher by $9 million or 0.4% in the six month period in 2007 compared to the same six month period in 2006. The higher net sales were primarily due to growth in sales volume in Hanes casualwear and underwear brand sales and Champion activewear brand sales. The higher net sales were offset primarily by lower Playtex brand sales and lower sales of promotional t-shirts sold primarily through our embellishment channel.

 

Our Innerwear, Outerwear and Other segments net sales were higher by $3 million, $9 million and $8 million, respectively, and were offset by lower net sales in Hosiery of $9 million and International segment net sales of $3 million. The higher net sales from our Other segment primarily resulted from an immaterial change in the way we recognized sales to third party suppliers in the same six month period in 2006. The full year change was reflected in the same six month period in 2006 with a $5 million impact on net sales and minimal impact on net income.

 

We expect the trend of declining hosiery sales to continue as a result of shifts in consumer preferences, which is consistent with the sustained decline in the overall hosiery industry.

 

 

Consolidated net sales increased by $7 million or 0.7% in the first quarter of 2007 compared to the same quarter in 2006. The increase was primarily due to growth in sales volume in Hanes casualwear and Champion activewear brand sales in our Outerwear segment. We experienced higher net sales in our women’s products such as panties, casualwear, socks and sleepwear which were partially offset by lower men’s and kids’ underwear net sales. The increase in women’s net sales reflects the recent launch of our Hanes All-Over Comfort Bra. The All-Over Comfort Bra is the latest in our Hanes ComfortSoft platform, which spans across the men’s, women’s and kids’ product categories.

 

Our Outerwear segment net sales increased by $16 million and were offset by slight declines in Innerwear of $3 million, Hosiery of $4 million, International of $1 million and Other segment net sales of $1 million. We expect the trend of declining hosiery sales to continue as a result of shifts in consumer preferences, which is consistent with the long-term decline in the overall hosiery industry.

 

 

 

Net sales increased year over year primarily as a result of a $91 million impact from increases in net sales in the innerwear and outerwear segments. Approximately $106 million of this increase was due to

 

 

Net sales declined primarily due to the $13 million impact from the discontinuation of low-margin product lines in the outerwear segment and an $11 million decline in sheer hosiery sales. Additionally, the acquisition of National Textiles LLC in September 2005 caused a $16 million decline as sales to this business were included in net sales in periods prior to the acquisition. Partially offsetting this decline were increased sales of $23 million in activewear. Consistent with the sustained decline in the hosiery industry, we expect the trend of declining hosiery sales to continue as a result of shifts in consumer preferences.

 

 

 

Net sales increased year over year primarily as a result of a $95 million impact from increases in net sales in the innerwear and outerwear segments. Approximately $102 million of this increase was due to