In the age of Instagram, logos are in.
And in the case of Hanesbrands, Champion is the clear winner.
The retailer announced first-quarter results Thursday before the bell, improving on both top and bottom lines.
Revenues for the three-month period ending March 30 increased 7.9 percent to $1.59 billion, compared with just $1.47 billion a year earlier. Meanwhile, net income was $79.48 million, up from $79.4 million last year.
But the real growth driver for Hanesbrands, which includes names like Hanes, Playtex and L’eggs in the company portfolio, is the Champion brand.
Sales of Champion products shot up 75 percent during the quarter to nearly $490 million in sales. That’s a growth of about $200 million. The company is now anticipating global sales of Champion for the entire year, outside of the mass channel, to be approximately $1.8 billion in constant currency.
That little blue and red — and sometimes white — C logo is catching. It didn’t hurt that celebs like Kim Kardashian and Kendall Jenner have been photographed wearing Champion-branded apparel as of late. Or, that Champion has 4.9 million followers on Instagram.
“These logos started appearing all over people’s feeds and fortunately the brands were able to feed into that,” said Simeon Siegel, senior retail analyst for Nomura Instinet.
The analyst added that a few other Nineties-centric brands, like Fila and Tommy Hilfiger, have also benefited from the influencer-led culture with their easy-to-identify logos.
“The idea of having a big logo, when the Nineties [style] came back, was essentially great fodder for Instagram,” Siegel said.
For Champion, international sales grew $115 million during the most recent quarter, or more than 65 percent, to $290 million. U.S. revenues of Champion products surged 80 percent, or about $85 million, to $190 million during the same time period. And the growth was broad-based not just by market, but by channel as well, seen in both wholesale and direct-to-consumer sales. For the entire year, the company is now expecting the Champion brand to grow at a rate of 30 percent year-over-year.
The incredible growth story of Champion might provide a cushion for Hanesbrands’ weaker links. Like its intimates business, which was down 12 percent for the quarter. That’s bad news for a company whose largest brand — Hanes — is built on innerwear. Hanesbrands is also expecting year-over-year declines in the U.S. activewear market outside of Champion.
Even so, Hanesbrands’ chief executive officer and director Gerald Evans told analysts during Thursday’s conference call that the company is delighted with the growth in Champion.
“We see a lot of road ahead to build this business,” he said. “We’ve got a lot of momentum and a lot of room to run here.”