International and Online Channel Sales Drive Hanesbrands’ Q4 Results
Key trends from Hanesbrands’ fourth quarter earnings are outlined below:
Growth in International Sales – Increasing geographical diversification benefited Hanesbrands sales by generating organic growth. Global activewear organic sales increased 7% and global Champion sales rose 15% y-o-y in Q4. Global innerwear organic sales increased at a more modest rate of 2%. Robust consumer demand and new store openings across Asia, Europe, and Australia enabled this organic growth.
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Double-Digit Online Sales Growth – Driven by the growing trend of online shopping , Hanesbrands online sales rose by 22% y-o-y in the fourth quarter. More importantly, online sales of the company rose in every geography underlining this to be a global trend. The online channel comprises of the company and retailer websites. This channel now constitutes about 11% of the company’s total sales in the fourth quarter. Looking ahead, with rising disposable incomes and people continuing to spend more online, this channel will likely constitute an increasing share of the company’s top line.
Segment-Wise Performance – The company posted broad-based growth across its key segments including Innerwear, Activewear, Direct to consumer, and International.
Major Boost from Acquisition of ‘Bras N Things’ and Alternative apparel – After the acquisition of Alternative apparel in October 2017, HBI has also entered into a definitive agreement to acquire Bras N Things, a leading specialty retailer and online seller of intimate apparel. This recently announced acquisition has enlarged Hanesbrands’ portfolio, supporting its activewear growth strategy. In particular this acquisition will likely expand the company’s existing market and channel penetration in specific geographies of Australia, New Zealand, and South Africa.
Going ahead, we believe that driven by the above trends HBI will likely continue to post healthy growth in its results in 2018.
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