Hanesbrands Inc. said Monday that it will lay off 250 management-level employees in an effort to control costs after posting a first-quarter loss.
This story first appeared in the April 28, 2009 issue of WWD. Subscribe Today.
In the three months ended April 4, the Winston-Salem, N.C.-based apparel firm recorded a loss of $19.3 million, or 20 cents a diluted share, against profits of $36 million, or 38 cents, in the same year-ago quarter.
Excluding one-time items in both periods, such as restructuring costs, the apparel manufacturer posted earnings per share of 3 cents in the quarter versus 42 cents a year ago. On average, analysts polled by Yahoo Finance, who do not normally account for such items, expected a loss of 5 cents a share.
Sales in the quarter fell 13.2 percent to $857.8 million from $987.8 million. Innerwear sales fell 6 percent to $513.8 million, while outerwear sales dropped 21 percent to $214.9 million. The hosiery category declined 21 percent to $52.8 million, and international sales dropped 20 percent to $83.2 million.
A Hanesbrands spokesman said about 200 of the cuts will come at the company’s Winston-Salem headquarters, with another 30 across the U.S. and the remainder abroad. He said 9,300 people are employed domestically, with 33,700 abroad.
The manufacturer expects to record about $15 million in restructuring charges related to the layoffs, mostly in the second quarter. It had previously eliminated 210 management and corporate positions in the fourth quarter.
“Our overall results were in line with our expectations and were significantly impacted by the economic recession,” said chairman and chief executive officer Richard Noll.
Noll sounded tentative moving into the rest of fiscal 2009.
“Retailers, while still experiencing soft retail sell-through, are beginning to loosen inventory restraints,” Noll said on a conference call with investors. “This may be a false bottom, a situation for which we are on guard, or it may be a turning point.”
Hanesbrands stock shed 41 cents, or 2.9 percent, to close the session before the earnings announcement at $13.75.