HanesBrands (asi/59528), whose apparel basics sell extensively in the promotional products industry, had a year-over-year sales decrease of nearly 10% and recorded a $17.7 million loss in 2023.

That’s according to a financial report the publicly traded global maker and marketer of T-shirts, sweatshirts, innerwear and more released on Thursday, Feb. 15.

Notably absent from the communication from HanesBrands? Final word on the future of its Champion brand, which the Winston-Salem, NC-headquartered corporation has been contemplating selling.

A Difficult Year

Overall, HanesBrands’ full-year 2023 global sales across all its business verticals tallied about $5.6 billion, down 9.6% on an annual basis. A $17 million net loss translated into a loss per share of $0.05 for the year.

Things would have been worse if not for a welcomed bounce-back to profitability in the fourth quarter, when HanesBrands generated net income of $77.9 million, or $0.22 per share. Cost-cutting and a significant tax benefit helped HanesBrands generate the positive return in Q4, despite the fact that quarterly sales declined 12% year over year to about $1.3 billion.

Softer consumer demand, cautious restocking by retailers, and what HanesBrands described as “topline headwinds from strategic actions” the company has undertaken to position Champion for “long-term profitable growth” sunk sales in the fourth quarter and 2023 more generally.

HanesBrands CEO Steve Bratspies admitted that fourth quarter performance was below expectations as the marketplace was more challenging than the company anticipated. Still, he pointed to some encouraging developments.

“We saw several positive indicators that give us confidence margins and leverage have reached a positive inflection point and demonstrate progress on our strategy to simplify our business, reduce inventory, cut costs and reignite innerwear,” Bratspies said. “Importantly, we exceeded our year-end goals in all four key 2023 performance metrics, including gross margin, inventory, operating cash flow and debt reduction.”

Report: Brand Management Firms Interested in Buying Champion From Hanes https://t.co/2hBrYjlrBw

— Chris Ruvo (@ChrisR_ASI) November 1, 2023

The Future of Champion

HanesBrands has been undertaking a strategic evaluation of its global Champion business – considering, among other alternatives, whether to sell the iconic brand.

The apparel company has emphasized that the strategic review isn’t a guarantee it will sell the line or take another major action.

Still, in late 2024, media reports indicated that WHP Global and Authentic Brands Group were among those interested in purchasing Champion. So far, no deal has been cemented with either of those entities or others.

“We continue to evaluate the right path forward, as we see strong interest from a broad and diverse group of global parties,” Bratspies said in a conference call with analysts and investors on Feb. 15.

Champion sales have been in freefall, and that could be complicating efforts to offload the brand. Champion revenue was down 23% in 2023’s Q4 compared to the same three-month stretch in 2022, for instance.

As the possibility of a sale looms for Champion, HanesBrands is continuing with the strategic actions Bratspies mentioned to restructure, streamline and strengthen the brand’s position. This effort included writing down more than $59 million in Champion inventory in 2023 and incurring $29 million in charges related to “professional fees, supply chain segmentation, store closures, (employee) severance and other costs.”