WINSTON-SALEM, N.C. - HanesBrands Inc. (NYSE:HBI), a global leader in iconic apparel brands, reported a first-quarter loss that was wider than analysts' expectations. HBI shares were up 1.7% in premarket trading.
The company posted an adjusted loss per share of -$0.11, which was $0.05 below the analyst estimate of -$0.06. However, the revenue for the quarter was in line with the company's own expectations, coming in at $1.16 billion, which met the midpoint of the company's projected range and was close to the consensus estimate of $1.19 billion.
For the first quarter, HanesBrands experienced a decline in net sales of approximately 17% compared to the same period last year. The decrease was attributed to several factors, including the divestiture of the U.S. Sheer Hosiery business and unfavorable foreign exchange rates. On an organic constant currency basis, net sales decreased by roughly 15% compared to the previous year.
Despite the sales decline, the company saw a significant improvement in gross margin, which increased by 750 basis points on a GAAP basis and 720 basis points on an adjusted basis compared to the prior year, driven by lower input costs, cost savings initiatives, and a favorable business mix.
Looking ahead, HanesBrands provided second-quarter guidance, expecting adjusted EPS to be between $0.07 and $0.11, which brackets the analyst consensus of $0.10. The company anticipates Q2 revenue to range from $1.335 billion to $1.375 billion, with the midpoint slightly below the consensus estimate of $1.34 billion.
For the full year 2024, HanesBrands forecasts adjusted EPS to be in the range of $0.42 to $0.48, which is in line with the consensus estimate of $0.43. The company expects full-year revenue to be between $5.35 billion and $5.47 billion, which is above the consensus estimate of $5.33 billion.
CEO Steve Bratspies commented on the results, stating, "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." He also highlighted the company's strategy of consumer-centricity, noting that HanesBrands' U.S. Innerwear business gained market share and outperformed the market despite an overall market decline.
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