Hanesbrands Inc. is crowing about the virtues of a broader base, touting better sales and a stronger Millennial connection.
Sales of Champion jumped 22 percent in the first quarter, when net income and sales gained. The brand, along with recent acquisitions Alternative Apparel and Bras N Things, all have what the company described as “a strong Millennial consumer base.”
“Several years ago, we began a focused strategy to diversify beyond being simply a U.S. business with a global supply chain to becoming a worldwide business that fully leverages the power of our global supply chain,” noted Gerald Evans, chief executive officer, on a conference call with analysts. “Our diversification actions have reduced our dependency on the U.S. wholesale market, while at the same time providing us multiple paths to deliver more consistent organic growth.”
Hanesbrands’ overall net income rose 12.5 percent to $79.4 million, or 22 cents a share, for the quarter from $70.6 million, or 19 cents, a year earlier.
However, when factoring out acquisition-related charges, earnings per share slipped to 26 cents a share from 29 cents.
Hanesbrands has bought 10 companies since 2013, including the Australian-based Bras N Things in February and Norcross, Ga.-based Alternative in October.
The company’s sales for the quarter ended March 31 increased 6.6 percent to $1.47 billion from $1.38 billion. Organic sales grew 1 percent in constant currencies, underpinned by international, the Champion brand and e-commerce.
While Millennial shoppers are seen as not as loyal as their parents, Evans said the younger cohort is still keen on brands.
Asked on the call about pressures from private label, on Amazon and elsewhere, the ceo suggested brands aren’t going anywhere.
“Over the last five years we looked across geographies, the branded element has actually grown and private labels declined and they were across multiple geographies,” Evans said. “That speaks to the strength of brands, and we see that as Millennials come on as consumers, they prefer brands equally to Boomers, and so we’re continuing to focus on connecting with that emerging consumer base through our marketing and media, as well as our consumer-driven innovation and continue to drive our brand shares.”
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