Charges hit Hanesbrands bottom line in Q1 while Under Armour announced a restructuring after it fell into the red in Q4. Geox, meanwhile, felt the effect of weakness in its wholesale division.

Hanesbrands losses widen in Q1 on sales slump

First quarter losses widened and net sales sank at Hanesbrands Inc on the back of charges linked to the divestment of its US Sheer Hosiery business.

Net loss grew to $39.1m from $34.4m a year earlier. Operating income fell to $52.1m from $57.3m while net sales declined 16.8% to $1.16bn.

On an organic constant currency basis, net sales decreased approximately 15% compared to last year.

Global Champion brand sales decreased 26% on a reported basis and 25% on a constant currency basis, with approximately 500 basis points of the decrease due to the planned strategic shift of its Champion kids’ business to a license model at the beginning of 2024.

US sales decreased 35%. Internationally, sales decreased 17% on a reported basis and 16% on a constant currency basis. Constant currency sales increased in Japan, China and Latin America, which were more than offset by decreases in Europe and Australia as macroeconomic headwinds continued to impact demand in these regions.

“We delivered solid first-quarter results with sales at the midpoint of our outlook, better-than-expected adjusted operating profit, positive cash flow generation and further reduction of our leverage. With the year unfolding as anticipated and our profit visibility, we reiterated our outlook for the full-year,” said Steve Bratspies, CEO.

"Over the past three years, we’ve taken necessary actions across the business to enhance and strengthen both the operating and financial models of the Company.

"With our leading brand positions, lower fixed-cost structure, reestablished gross margin, consistent cash generation and a commitment to reduce debt, we have created a multi-year flywheel designed to accelerate earnings, deleverage faster, and invest in growth initiatives, which we believe will drive strong shareholder returns over the next several years.”

GEOX Q1 sales sink on wholesale weakness

Sales at GEOX fell 13.5% in the first three months of the year to EUR193.6m on the back of weakness in the wholesale channel. Net financial loss was EUR134.9 versus a loss of EUR93.1m a year earlier.

Chief Executive Officer Enrico Mistron commented: “The first quarter of 2024 has proven to be extremely challenging and complex as highlighted by numerous market indicators already emerged towards the end of last year. Nevertheless, there are positive signals regarding the performance of our direct-to-consumer (DOS) channels. Comparable sales (LFL) from physical DOS confirm positive trend, reflecting the impact of investments in product and positioning towards a premium segment. The persistence of the complexity and uncertainty observed in all our major reference markets in these first months of 2024 lead us to maintain a prudent and focused approach to the growth of the most profitable markets, the streamlining of processes, and the optimization of cost structures.”

Under Armour moves to restructure on Q4 profit, sales slip

Under Armour’s fourth-quarter sales fell 5% to $1.3bn. North America revenue decreased 10% to $772m, and international revenue increased 7%to $561m (up 6 percent currency neutral). Wholesale revenue decreased 7% to $850 million, and direct-to-consumer revenue was flat at $455m.

Apparel revenue decreased 1 percent to $877m. Footwear revenue was down 11 percent to $338m. Accessories revenue was down 7% to $89m.

The sportswear brand swung to an operating loss for the three months ending 31 March with an operating loss of $3.6m from a $29.5m operating profit and a net profit of $6.6m from $170.5m a year earlier.

The group is now embarking on a restructuring plan which will include job cuts.

CEO Kevin Plank said: "Due to a confluence of factors, including lower wholesale channel demand and inconsistent execution across our business, we are seizing this critical moment to make proactive decisions to build a premium positioning for our brand, which will pressure our top and bottom line in the near term," Plank continued. "Over the next 18 months, there is a significant opportunity to reconstitute Under Armour's brand strength through achieving more, by doing less and focusing on our core fundamentals: driving demand through better products and storytelling, running smarter plays like simplifying our operating model and elevating our consumer experience. In parallel, we're focused on cost management and implementing the strategies necessary to grow our brand and improve shareholder value as we move forward."

Crocs Inc Q1 profit dips on HEYDUDE challenges

First quarter revenues increased to $938.6m from $884.2m a year earlier. Operating income fell to 226.4m from $234.9m a year earlier on the back of increased cost of goods and higher expenses in the comparative period. Net income increased to $152.5m from $149.5m.

"We delivered an exceptional first quarter, led by mid-teens growth of our Crocs Brand, driven by robust consumer demand both in North America and in international markets," said CEO Andrew Rees. "Our record revenue, industry-leading gross margins and the power of our diversified business enabled us to raise our full-year adjusted diluted earnings per share outlook."

Rees continued: "As we continue to prioritise brand health in the North American market for HEYDUDE, and considering what we are seeing quarter-to-date, we are reducing our revenue expectations for the brand for the balance of the year. We are confident in the long-term opportunity for the HEYDUDE brand and are excited to welcome a new HEYDUDE president to fully unlock its future potential."

Wolverine Worldwide swings to loss in Q1

Total revenue in the quarter ending 30 March 2024 fell to $394.9m from $599.4m.

The company reported an operating loss of $3.1m compared with an operating profit of $45.3m a year earlier. Net losses were $13.7m from an $18m profit a year earlier.

The company reported lower gross profit and booked an impairment charge compared with the same period a year earlier. During 2023, Wolverine Worldwide divested the US Wolverine Leathers business, the non-US Wolverine Leathers business and the Sperry brand.

“We delivered better-than-expected revenue and earnings in the first quarter, and we are beginning to see proof points emerge as early validation of our strategy and execution – including record gross margin in the quarter, acceleration in our direct-to-consumer business, improving order trends across our wholesale operations, and a healthier balance sheet,” said Chris Hufnagel, president and CEO of Wolverine Worldwide.

“We’re executing our turnaround and transformation with pace and continue to make meaningful progress towards realising the full potential of our brands, platforms, and teams. While we have more work to do, I’m encouraged by the great work of our teams and the power of our brand-building model – focused squarely on creating awesome products, telling amazing stories, and driving the business each and every day.”

Q2 losses widen, sales sink at Delta Apparel

Delta Apparel booked net sales of $78.9m compared to the prior year period net sales of $110.3m with sales falling in both the Salt Life Group and the Delta Group segments for the second quarter ending 30 March. Gross margins were 4.3% compared to 14.7% in the prior year period, driven primarily by production curtailments in the Delta Group segment.

Operating loss increased from $5.3m in the prior year period to $24.4m.

Earnings before interest, taxes, depreciation and amortization (“EBITDA”) was a loss of $20.9m. Net loss increased to $36.3m from a net loss of $7m.

"US quarterly financial digest: Hanesbrands, Under Armour, GEOX" was originally created and published by Just Style, a GlobalData owned brand.

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