HanesBrands Inc., a global leader in iconic apparel brands, today posted results for the first quarter of 2021, with solid adjusted operating profit and cash flow driven by continuing revenue momentum across the company’s global innerwear and activewear businesses. For the first quarter ended April 3, 2021, net revenues from continuing operations totaled $1.51 billion, up 25% from $1.20 billion for the period ended March 28, 2020. Net revenues rose by 22% in constant currency in the first quarter.
Good point-of-sale success in all major channels, led by 82% growth in online channels, and market share gains in key categories drove double-digit growth in both the global innerwear and activewear businesses. Sales development in the first quarter benefited from a reference to the initial pandemic shutdowns a year earlier, as well as some one-time contributions, such as government grants. Chief Executive Officer Steve Bratspies said, “Our solid first-quarter results showed progress in all market segments.” “Champion’s rapid growth was driven by high market demand. In the United States, we increased our share of the innerwear market, and the Hanes Total Support Pouch launch demonstrates how our brands can cater to younger customers by combining creative products with persuasive marketing. “I’d like to express my gratitude to our 61,000 associates who, despite COVID-related challenges, continue to meet customer demand around the world. The strategic advantages of our supply chain, as well as the rapid progress we’re making on our Full Potential strategy to drive long-term sales and profit growth, are evident in our first-quarter results.”
As compared to the prior year era, the first-quarter GAAP gross margin of 40.0 percent improved 520 basis points. The adjusted gross margin of 40.2 percent was up 360 basis points from the previous year’s comparable era. The increase in gross margin year over year was primarily due to the leveraging of higher sales volume from strong point-of-sale growth and the one-time products mentioned earlier.
First-Quarter 2021 Business Segment Summaries
● Innerwear Segment
Innerwear sales in the United States rose by 35% year over year to $570 million. The strong year-over-year growth was fueled by underlying point-of-sale growth and market share gains, as well as the overlap of the initial pandemic shutdown and one-time benefits such as government stimulus and retailer restocking. For the year, basic sales rose by 39%, with gains across the board.
● Activewear Segment
As compared to the prior year quarter, the operating profit of the US Activewear segment increased 647 percent to $61 million, and the segment’s operating margin increased 1,380 basis points to 16.6 percent. The increase in profitability was primarily due to increased cost leverage as a result of higher revenues, as well as a boost from product mix.
● International Segment
When compared to the prior year quarter, the international segment’s operating profit increased 72 percent to $87 million, and the segment’s operating margin increased 540 basis points to 17.2 percent. The increase in profitability was largely due to volume leverage from increased revenues.