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HanesBrands’ Top Line to Grow 4% in the Second Quarter

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Dec. 4 2020, Updated 10:53 a.m. ET

What’s driven HBI’s top line so far?

Wall Street analysts expect a YoY (year-over-year) rise of 3.9% in HanesBrands’ (HBI) total sales to $1.71 billion in the second quarter. 

The company’s top line rose 5.5% to $6.53 billion in the 12 months that ended on March 31. Its growth during the period was driven by a mix of acquisitions and organic growth.

Organic sales remained weak and fell ~3.5% during the first half of 2017. However, there was a revival in the third quarter of 2017, which continued into the first quarter of 2018.

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Sales from the company’s core business increased 1% YoY on a constant currency basis during the first quarter fueled by higher online sales and the better-than-expected performance of the Champion brand across all regions. However, the US brick-and-mortar channel remained weak. HanesBrands’ acquisitions of Bras N Things and Alternative Apparel added $32 million to its first-quarter top line.

Looking forward

The company’s management is now looking for a 1% rise in its 2018 constant currency organic sales. However, the second quarter is likely to witness a ~1% fall. Constant currency organic growth is likely to be stronger in the second half of the year due to the negative effects of planned door closures and tighter inventory management in the first half.

Total sales for the full fiscal year are likely to lie in the $6.72 billion–$6.82 billion range, reflecting a 5% YoY rise at the midpoint. Besides organic growth, acquisitions (~$180 million) and a favorable foreign currency rate (~$70 million) are likely to boost the company’s top line during the year.

HBI’s second-quarter sales are projected to range between $1.7 billion and $1.725 billion, reflecting a 4% rise at the midpoint.

In the next article, we’ll discuss the company’s margins.

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