Hanes: Net +7.8% Aided By Gown & Mask Sales

Hanes second quarter net income jumped 7.8%, as sales only dipped slightly. Earnings rose because of its “ability to pivot to production and sales of personal protective garments (face masks and medical gowns) combined with relatively strong apparel performance in pandemic conditions, including 68% sales growth in the online channel.”

Without the contribution of personal protective equipment (PPE), sales at the company’s Innerwear segment declined 26.8% in the period, to $481.3 million. However, with those products included, a contribution of $613.5 million over the three months ending June 27th, sales jumped 66.5% to $1.095 billion.

Hanes as a whole, which also includes Activewear and International segments, reported a profit of $161.2 million on sales of $1.739 billion, compared to earnings of $149.6 million on sales of $1.761 billion in the three months ended June 29, 2019.

“Innerwear point-of-sale trends excluding protective garments accelerated through the quarter, turning significantly positive in May and June. Innerwear basics gained more than 300 basis points of market share in the quarter, and Innerwear intimate apparel point-of-sale trends returned to pre-COVID levels entering July,” Hanes revealed. Looking ahead, “ U.S. Innerwear sales on the strength of basics could return to rebased year-ago levels by the end of the year.”

The pandemic has created a strong new business sector for Hanes. Through all of its divisions, “the company sold $752 million in personal protection garments globally to governments, large organizations, consumers and business-to-business customers. The sales of the face masks and medical gowns significantly exceeded initial expectations for the new business lines. As part of the protective-garment sales in the quarter, the company delivered more than 450 million cloth face coverings and more than 20 million medical gowns to the U.S. government. The company is selling face masks to consumers under its leading brands globally, including Hanes, Champion, Bonds and Dim, and protective garments represent an ongoing business opportunity. Excluding the potential for additional government contracts, the company estimates that it could sell more than $150 million of protective garments in the second half of 2020.”