Champion'S Quarterly Sales Rose To Fame.

In May 2nd, HanesBrands, the American underwear and sportswear manufacturer, announced the key financial data for the first quarter of fiscal year 2019.

The red tide brand Champion (Champion) continued to be popular in the nostalgia trend in 90s. Sales increased by 75% according to the constant exchange rate, pushing the parent company's total sales to grow by 8% year-on-year.

In the three months ended March 31, 2019, the core financial data of HanesBrands group were as follows:

Net sales rose 7.9% to $1 billion 590 million, up 9.8% from the constant exchange rate, which is the seventh consecutive quarter of sales growth (constant exchange rate) growth, underwear, sportswear and international business performance exceeded expectations.

According to GAAP (generally accepted accounting principles), operating profit increased by 1.4% to US $148 million over the same period, and adjusted operating profit increased by 2% to US $169 million over the same period last year.

According to GAAP, diluted earnings per share were $0.22, unchanged from the same period last year, and the adjusted EPS increased by 4% to $0.27.

According to GAAP, net profit increased 0.1% to $79 million 480 thousand compared to the same period last year.

Net liabilities have been reduced to 3.5 times from 3.9 times the profit before interest tax depreciation and amortization (EBITDA) in the same period last year.

HanesBrands chief executive Gerald W. Evans Jr said: "the first quarter performance was very strong, and all sectors and regions have achieved extensive growth.

In addition to the accelerated growth of Champion worldwide, underwear sales in Asia, Australia and the Americas have also increased, and the basic underwear series has achieved second consecutive quarters of growth in the United States.

The cash flow is also improving as planned, and the level of debt leverage has improved. "

By Sector:

Underwear: sales fell 3.1% to $476 million compared to the same period last year, better than the previously expected 4% decline, operating profit grew 3.2%, operating profit margin increased 1.3 percentage points to 22%, of which, the basic sales increased by nearly 2% over the same period, and online sales increased by 6% over the same period last year.

Sportswear: sales increased by 17.1% to $405 million compared to the same period last year, operating profit increased by 14% over the same period last year, but the operating profit margin dropped by 0.3 percentage points, mainly due to the impact of the company's investment in distribution channels to maintain service levels and meet the growing demand for Champion.

International Business: sales increased by 13.4% to US $646 million over the same period, and increased by 18.3% according to the constant exchange rate. Although the unfavorable exchange rate factor was higher than expected this quarter, the overall sales growth and synergy effect promoted the overall growth of international business. Sales volume in Europe, Asia, Australia and the Americas increased, underwear and sportswear sales increased, and operating profit increased 20% over the same period last year.

Others: sales fell 6% to $60 million 560 thousand over the same period last year.

According to the fixed exchange rate, the global sales of Champion outside the public channel increased by 75% over the past quarter, and sales in all regions increased by two digits. Among them, the international market reached 290 million US dollars, an increase of over 65%, and the US market sales amounted to US $190 million, an increase of 80%.

This growth is mainly attributable to the retail and online expansion of brands in the US market, the expansion of channels in Scandinavia and Western Europe, the strong growth of wholesale and direct sales in Asian markets, and the expansion of distribution in the Australian market.

The company expects Champion brand annual sales growth to reach 30%.

The strong growth of Champion helped to make up for other weak business of HanesBrands group, such as underwear sales which fell by 12% in the quarter.

Champion is catching up with an unprecedented Renaissance - the popularity of logo shirts, the revival of old fashions, and the popularity of casual street clothes, all of which push Champion's classic sportswear to a fashion craze among teenagers and Millennials.

Since 2016, Champion's fans on Instagram have increased from 200 thousand to about 6 million.

(see the history report of "gorgeous ambition": ins fans from 200 thousand to 6 million, see how the Centennial Champion returns to the top of the trend).

Simeon Siegel, senior retail analyst at Nomura Instinet, said that with the return of the style in 90s, big logo has become an indispensable material for Instagram. Other brands such as Fila and Tommy Hilfiger also benefit from the current retro trend of opinion leaders through easy identification logo.

At the analysts' conference call in May 3rd, Gerald Evans said that the company was optimizing the supply chain and distribution channel of Champion brand, and continued to exert its efforts in online sales as well as efforts to build a brand store network, especially in the Asian market.

Future Ltd will continue to make Champion a target of $2 billion worth of big brands by 2022.

The second quarter of fiscal year 2019 is expected to:

Net sales amounted to 1 billion 735 million ~17.65 billion dollars.

According to GAAP, the operating profit is 223 million ~2.33 billion, and the adjusted operating profit is 238 million ~2.48 billion US dollars.

According to GAAP, earnings per share were 0.4~0.42 dollars, adjusted earnings per share 0.43~0.45 dollars.

HanesBrands reiterated the previous 2019 fiscal year's full year forecast:

Net sales amounted to 6 billion 885 million ~69.85 billion dollars.

According to GAAP, the operating profit is 900 million ~9.3 billion, and the adjusted operating profit is 955 million ~9.85 billion dollars.

According to GAAP, earnings per share were 1.59~1.67 dollars, adjusted earnings per share 1.72~1.8 dollars.