See it and Sell it First at ASI Show Orlando – January 4-6, 2025.   Register Now.

News

Delta Apparel, HanesBrands Report Earnings

PPE was pivotal to HanesBrands’ full-year 2020 sales performance, though the company no longer views the channel as viable. Delta, a Top 40 promo firm, increased operating income.

Top 40 promotional products supplier Delta Apparel (asi/49172) and HanesBrands (asi/59528), one of the largest apparel manufacturers in the world whose products sell in markets that include promo, have reported their latest financial performance results.

Stats and graphics

Greenville, SC-based Delta Apparel said that total sales for its fiscal first quarter, which corresponds to the calendar year fourth quarter, were $94.7 million, down about 1% from the same period the prior year.

Operating income for the quarter increased 16% to $3.1 million, or 3.2% of sales, compared to $2.6 million, or 2.8% of sales, in the prior year. Net earnings were $883,000, or $0.13 per share, which was comparable to the performance during the same period the year before.

The results reflect revenue from all of Delta Apparel’s business channels, from the promo market to retail.

“Fiscal 2021 is off to a strong start with our first-quarter sales and profitability results well ahead of our internal expectations,” said Robert W. Humphreys, chairman/CEO of Delta Apparel, the 38th largest supplier in the North American promo products industry.

Humphreys continued: “Despite notable headwinds from inventory constraints, hurricane-related disruptions in Central America and freight carrier limitations during the holiday season, our results were bolstered by strong order demand and impeccable manufacturing and operational execution at all levels.”

Meanwhile, HanesBrands reported that its sales for the fourth quarter, concluded on Jan. 2, 2021, increased nearly 3% to $1.8 billion. Sales of personal protective equipment (PPE) played a part, accounting for $28 million in global revenue.

While Q4 was up, full-year 2020 sales dipped 4.3% to $6.66 billion, though the decline was driven, in part, by Hanes exiting certain programs and the effect of exchange rates. Excluding those factors, HanesBrands’ sales would have been up 2% for the year.

HanesBrands’ successful pivot to PPE was essential to keeping revenue from plummeting in 2020, accounting for $959 million in total sales.

Still, HanesBrands noted that it doesn’t view PPE as a viable long-term growth opportunity, something hammered home in the fourth quarter, when the firm incurred a total of $611 million in inventory charges, which included a $400 million write-off of its entire PPE inventory-related balance. The remaining $211 million in inventory charges was tied to the company reducing its SKUs in favor of focusing more on higher-volume, faster-growing products.

The charges contributed significantly to HanesBrands posting a net loss for the year of nearly $75.6 million, or $0.21 per share. Nonetheless, HanesBrands is predicting sales growth and a return to profitability in Q1 2021, with earnings anticipated to be in the range of $0.24 to $0.27 for the quarter.

“I’m extremely proud of the HanesBrands team for all it accomplished in 2020 under very challenging conditions, and I thank our global associates for their hard work and dedication,” said HanesBrands CEO Steve Bratspies. “We delivered solid sales growth in the fourth quarter, with continued revenue momentum in our largest businesses and strong market share performance in our Innerwear and Activewear segments.”