News November 07, 2024
HanesBrands To Close Distribution Center, Sales Fall Again
Still, the apparel manufacturer posted a profit in the third quarter and is forecasting year-over-year sales growth in Q4.
Key Takeaways
• A Shuttering: HanesBrands (asi/59528) plans to close a distribution center in High Point, NC,
cutting 75 jobs.
• Another Revenue Decline: Sales fell 2.5% in Q3 2024, with a $307.55 million loss year to date.
• Turning A Corner?: The company posted a profit in Q3 and expects 2% sales growth in Q4 2024.
Publicly traded apparel maker HanesBrands (asi/59528) plans to permanently shutter a distribution center in High Point, NC, cutting 75 jobs, according to a Worker Adjustment and Retraining Notification (WARN) notice.
The facility had largely focused on the Champion brand, which Hanes sold for about $1.2 billion to Authentic Brands Group in a deal that officially closed Sept. 30.
The WARN filing came Nov. 1, about a week before the Winston-Salem, NC-headquartered corporation announced that its total company sales dropped 2.5% year over year in the third quarter of 2024 to $937.1 million. For the first nine months of the year, sales were down nearly 6% to $2.71 billion.
Meanwhile, in the January through September period, HanesBrands ran a loss of $307.55 million, translating to a loss of $0.87 per basic share. The picture brightened a bit in Q3 from an earnings standpoint; HanesBrands generated net income of $29.95 million, or $0.09 in earnings per basic share.
While HanesBrands anticipates that its full-year 2024 sales will be below last year’s levels, the company does expect to see an annual basis sales increase of about 2% in the fourth quarter in particular. After a stretch of poor financial results, job cuts and the sale of Champion, HanesBrands executives believe the firm is poised to turn a corner.
“Our strategic actions to create a more focused, simplified business are working,” said CEO Steve Bratspies. “We are driving a step-function change in our cost structure, increasing operational efficiencies, reducing inventory and freeing up capital to invest in growth. We expect the benefits of these actions to ramp up over the next several quarters, giving us visibility and confidence to deliver continued margin improvement, cash generation and debt reduction through 2025.”
In 2023, a year in which HanesBrands’ sales fell 10% and the firm recorded a $17.7 million loss, the company slashed an estimated 800 jobs and closed its hosiery plant in Clarksville, AR. In February 2024, HanesBrands suspended operations at a distribution in Winston-Salem, a move that reportedly led to 159 layoffs.