Champion Achieved Two Digit Strong Growth For 9 Consecutive Quarters

In October 31st, the Champion brand's parent company, HanesBrands, the American underwear and sportswear manufacturer, announced the key financial data in the third quarter of fiscal year 2019. The global sales growth of Champion brand was 25% (excluding the traditional US mass market channel), achieving two digit strong growth for 9 consecutive quarters. The company hopes that the full fiscal year will achieve the expected intermediate value.

As of the third quarter of September 28th, the key financial data for HanesBrands are as follows:

Net sales increased 1% to $1 billion 870 million, up 2% from the fixed exchange rate, and achieved organic growth for ninth consecutive quarters.

According to GAAP (generally accepted accounting principles), operating profit increased by 5% to US $270 million over the same period, and adjusted operating profit increased by 1% to US $280 million over the same period last year.

According to GAAP, diluted earnings per share increased by 9% to $0.51 / share, adjusted earnings per share rose 4% compared to the same period last year, to 0.54 U.S. dollars / share.

According to GAAP, net profit increased 9.5% to $154 million compared to the same period last year.

Sales growth in underwear department and sportswear Department exceeded expectations, and international sales increased by 7% year-on-year, up 11% year on year.

Global direct sales, including direct sales and all channels' online sales, grew by 10% over the same period, contributing 23% to the group's sales, an increase of 13% over the same period of exchange rate, and two digit growth in the local market and the global market.

In the first three quarters of fiscal year 2019, HanesBrands net sales increased 3.6% to $5 billion 220 million over the same period last year, and profits rose 7.6% to 421 million US dollars over the same period.

HanesBrands CEO Gerald W. Evans Jr said: "we are very happy that the performance in the first three quarters of this year exceeded expectations, so we raised the median value of net sales and diluted earnings per share for the full fiscal year. In all regions of the world, we have strong diversified business models for all product categories. Our international business is excellent. Champion brand keeps growing globally. We are continuously strengthening our channels. At the same time, under the impetus of creative and brand investment, the underwear business in the United States is growing. Cash flow increased significantly by nearly $100 million in the third quarter. In addition, compared with the same period last year, our net liabilities have decreased by about US $500 million, and the long-term prospects of the company are very strong.

In the third quarter, all regional markets, product sectors and channels of Champion rose. Sales in the United States increased by 29% over the same period last year, while sales in the international market increased by 24% compared with the same period last year. The growth rates in Europe, Asia and Australia all increased by two digits. Sales of sportswear and underwear products also increased by two digits. In the first three quarters of 2019, sales of Champion stood at $470 million, unchanged from the same period last year, compared with $360 million in the same period last year.

In the third quarter, HanesBrands also added a South Korean distributor to Champion. Prior to that, Champion announced that there were second distributors in the Chinese market. By this end, by the end of 2020, the number of Champion stores in China and Korea will double to more than 200.

In the third quarter, net cash flow increased 47% to $302 million over the same period, and debt leverage declined. Net liabilities are 3.3 times the adjusted profit tax depreciation and profit before amortization (EBITDA), and hope that net liabilities will be 2.9 times the adjusted EBITDA by the end of the year.

By Sector:

Underwear: net sales fell 3.5% to $578 million compared with the same period last year, operating profit fell by 8% year-on-year, mainly due to weaker retail trends than expected, and the negative impact of retailers' bankruptcy.

Sportswear: net sales fell 1% to $548 million compared with the same period last year, and operating profit increased by 4% over the same period last year, mainly benefiting from the growth of the brand sportswear Champion (excluding the traditional US mass market channel).

Excluding the traditional US mass market channel, Champion's global sales increased by 25% over the same period last year, a year-on-year increase of 26% compared with the fixed exchange rate, with sportswear sector sales up 18% over the same period last year.

Champion's traditional mass market channel business in the US "C9 by Champion" performs better than expected.

Sales outside the Champion declined, mainly due to the group's withdrawal from commodity centered businesses, focusing on improving profitability.

International Business: net sales increased by 7% to US $664 million over the same period last year, up 11% over the same period. Operating profit increased by 8% compared to the same period last year, and increased by 10% over the same period. The operating profit margin is 16.2%; underwear and sportswear products are increasing in the markets of Australia, Germany, Britain, Mexico and Canada.

The fourth quarter of fiscal year 2019 is expected to:

Net sales amounted to 1 billion 719 million ~17.69 billion dollars.

According to GAAP, the operating profit is 248 million ~2.73 billion, and the adjusted operating profit is 259 million ~2.84 billion US dollars.

According to GAAP, earnings per share were 0.46~0.52 dollars, adjusted earnings per share 0.48~0.54 dollars.

HanesBrands 2019 annual forecast for fiscal year:

Net sales amounted to 6 billion 935 million ~69.85 billion dollars.

According to GAAP, the operating profit is 900 million ~9.25 billion, and the adjusted operating profit is 955 million ~9.8 billion dollars.

According to GAAP, earnings per share were 1.61~1.67 dollars, adjusted earnings per share 1.74~1.8 dollars.