Champion Third Quarter Sales Jump 20% on Widespread Growth
Global sales of the Champion brand were up 20% from the third quarter of 2019, with growth of 22% in the United States and 19% internationally, according to quarterly results from the brand’s parent company, Hanesbrands.
Champion’s growth in the quarter was driven by strong consumer demand across channels in the United States, continued growth in its European business as well as the ramp-up of our partners in China.
âChampioning is about being fun and inclusive,â said Steve Bratspies, CEO of Hanesbrands, in a conference call with analysts. âConsumers around the world love that Champion gives them the confidence to express themselves and feel good while doing so. As a result, Champion US’s equity position increased during the quarter in both the male and female categories.
He added: âIn Europe, we continue to execute our Champion growth strategy with expansion into key categories, such as children and footwear, increased space savings as well as expansion into new geographies. . And in China, we continue to expand our points of contact with consumers. We add stores through our partners. We are expanding our product assortment with key pure parts and expanding on social e-commerce platforms.
During the question-and-answer session, Bratspies said he sees Champion’s growth ‘accelerating’ as the pandemic emerges despite potential changes in comfort as people socialize more and become less connected to their homes. .
âI don’t see it slowing down at all outside of the COVID period,â Bratspies said. âWe’ve definitely had a good quarter, up 20% from 2019 – a lot of momentum around the world. We keep picking up new doors, gaining space, adding new categories. “
He also described the growth of the footwear and children’s sector in Europe as âreally encouragingâ.
Bratspies added: âAnd we see the same in the US when we just launched our Reverse Weave Week, which sort of celebrates the iconic Reverse Weave platform that we have, a very strong consumer engagement that shows some consumers, quite frankly, to reverse the weave and then re-engage the others at the same time, so the response has been very strong.
He further cited the benefits of the innovation for Champion, including a recently introduced soft touch innovation in bras and leggings that âis doing extremely wellâ and also helps Champion save space on them. shelves. He concluded: âChampion has a lot of momentum not only nationally but globally. And we expect it to continue to increase as we go along. “
More generally, Bratspies said he believes Hanesbrands’ sportswear business has grown and is gaining market share. The Activewear segment includes t-shirts, fleeces, sports shirts, performance t-shirts and shorts, sports bras, thermal wear and team wear under the brands Champion, Hanes, Alternative, JMS / Just My Size, Gear for Sports and Hanes Beefy-T.
âI feel really good about the business, quite frankly and overall I don’t see any change in trend,â said Bratspies. âConsumers are definitely looking for the product. We always have a headwind in our Activewear activity around sports and university license activities. This channel was conservative enough when COVID came out to open this year, but we expect that to continue to grow. And although we are not yet back to 2019 levels in this channel, we are above 2022. â
Company-wide, third-quarter sales totaled $ 1.79 billion, up 5.8% year-over-year. Sales were just below Wall Street’s consensus estimate of $ 1.8 billion.
The gains were supported by Champion’s 33% year-over-year growth year-over-year globally. Excluding $ 179 million in personal protective equipment (PPE) sales, sales jumped 18% from the previous year. Year-over-year growth was driven by strong consumer demand and point-of-sale trends in the United States, Europe, America and some Asian markets, including China, which have more that offset headwinds due to prolonged government lockdowns linked to COVID in Australia. and Japan. Third quarter total net sales in constant currencies increased 5%.
Compared to the third quarter of 2019, sales increased by 11%, including the 20% growth in sales of the Champion brand worldwide. Total sales in constant currencies increased by 10%. Growth in the global underwear and sportswear business was driven by strong consumer demand, higher outlet performance and market share gains.
On an adjusted basis, income rose 17.5% to $ 188 million, or 53 cents a share, year over year, beating Wall Street’s consensus target of 47 cents. Compared to the second quarter of 2019, profits increased 8.0%.
On a reported basis, net income totaled $ 177 million, or 50 cents, in the last quarter, compared to 118 million, or 34 cents, a year ago and 189 million, or 52 cents, in the third quarter of 2019.
Adjusted operating income of $ 264 million increased 9% from a year ago and 8% from 2019.
Sportswear sales jump 42% from 2020 and 4% from 2019
By segment, sportswear sales increased 42% to $ 462.5 million from a year ago, driven by strong double-digit growth from the Champion and Hanes brands.
The Activewear segment saw strong point-of-sale trends across multiple channels during the quarter. The segment continued to benefit from pent-up consumer demand and the overlapping headwinds related to COVID from last year.
Sportswear revenue increased 4% compared to 2019. Champion brand sales in the segment increased 14%, which more than offset the decline of other brands. Strong point-of-sale trends were seen in online, wholesale and distribution channels during the quarter, which was partially offset by declines in the college bookstore channel.
Sportswear operating profits reached $ 76.2 million, up 157.6% from $ 26.6 million a year ago. The segment’s operating margin of 16.5% increased by approximately 740 basis points compared to the prior period, driven by the leverage of fixed costs resulting from increased sales and the benefits of the business mix. ‘activities, which more than offset the increase in the brand’s marketing investments. The operating margin of Activewear decreased by around 10 basis points compared to the third quarter of 2019, as the leverage from higher sales volume and the benefits of the business mix were mainly offset by the ‘increased investment in brand marketing.
Double-digit innerwear Up excluding PPE
In its other segments, year-on-year indoor clothing sales fell 11.4% to $ 702.6 million. Excluding PPE, Innerwear sales increased 12% year-over-year with strong point-of-sale growth across all channels. Underwear sales increased 25% compared to the third quarter of 2019. The underwear segment includes basic items including men’s underwear, women’s panties, children’s underwear and socks, under the names Hanes, Champion, JMS / Just My Size, Bali, Maidenform and Polo Ralph Lauren. .
Hanesbrands said that since the start of the year, the US underwear market share has increased by around 140 basis points from 2019, with market share increasing in men’s, women’s, kids and socks. Innerwear operating margin of 21.0% decreased 70 basis points year over year due to fixed cost deleveraging resulting from lower sales, higher transportation costs, capital expenditures increased brand marketing and higher inflation levels. operating profits fell 14.2 percent year-on-year to $ 147.7 million.
International sales gain 6%
International sales increased 6.0% to $ 536.5 million. Excluding PPE sales in the quarter of the previous year, third quarter sales increased 9% on a reported basis and 7% in constant currencies. Sales increased by 4% compared to 2019.
International segment operating margin of 16.1% decreased 385 basis points year over year due to deleveraging from the Japanese and Australian operations as well as increased investment in brand marketing.
Profit forecasts are raised again for 2021
For 2021, net sales are expected to be between $ 6.76 billion and $ 6.83 billion, which is about 11% growth from the previous year at midpoint and includes a projected benefit. approximately $ 108 million from exchange rate changes. The updated forecast was quite close to the previous range of between $ 6.75 billion and $ 6.85 billion.
Adjusted EPS is now expected in a range of $ 1.79 to $ 1.84, down from $ 1.68 to $ 1.76 previously.