Suppliers Gildan (asi/56842) and HanesBrands (asi/59528) both experienced year-over-year declines in sales in the first quarter of 2023.

Weaker sales in company segments whose focus includes but isn’t limited to business with the promotional products market contributed to the drops, financial reports released this week indicated.

Gildan: Sales Drop 9.3%

Montreal-headquartered Gildan said that total global sales for the first three months of 2023 fell 9.3% to about $703 million. Revenue in the activewear division, which includes but is not exclusive to sales to the promo market, fell 12% year over year to $588 million.

Part of the overall sales retreat was because of a big stock-up by Gildan customers in Q1 2022 following the inventory replenishment challenges of 2021. That helped send business soaring for Gildan in last year’s Q1, but an equivalent large-scale inventory fuel-up didn’t occur at partner firms that carry and sell Gildan blanks in Q1 2023. 

$625.1 million
Gildan’s first-quarter sales in the United States, an 8.3% drop from Q1 2022.

Gildan further shared that first-quarter sales in the United States totaled $625.1 million, down 8.3%, while Canada revenue was $25.7 million, down 15%.

Gross profit of $188 million in the quarter was $53 million less than the prior year, a result caused by the slip in sales and lower gross margins. Gildan was still profitable, but net earnings eroded by a third to $97.6 million, or $0.54 per share. Adjusted net earnings were $81.6 million, or $0.45 per share. 

Gildan expects 2023 to improve, projecting that full-year sales will increase in the low single-digit range.

“We are pleased with our top-line results having met our sales expectations for the quarter,” said Glenn J. Chamandy, Gildan’s president and CEO. “Moreover, even though the economic environment remains uncertain, we remain comfortable with our full-year outlook given our strong competitive position.”

HanesBrands Experiences $34 Million Quarterly Loss

Winston-Salem, NC-headquartered HanesBrands reported that total global Q1 sales fell 12% compared to the previous year’s first quarter, registering nearly $1.4 billion. Gross profit was down 23% to $449.7 billion. The quarter ended in a loss of $34.4 million, or -$0.10 per basic and diluted share.

Reduced spending in the U.S. and Australia contributed to the sales setback, as did unfavorable currency exchange rates. The lower revenue, reduced margins and higher labor rates spurred the loss.

12%
The percentage year-over-year decline in Q1 revenue for HanesBrands.

HanesBrands noted that its Q1 activewear segment sales dropped 19% compared to the same three-month span the previous year, falling to $314.9 million. “Continued growth in the collegiate channel was more than offset by declines in other (activewear) channels, particularly printwear,” according to HanesBrands. Activewear includes sales of products like T-shirts and hooded sweatshirts in the promo/decorated apparel space.

Currently, the company is projecting full-year 2023 revenue to come in between $6.05 billion and $6.2 billion. The midpoint of that range would represent a reported annual sales decline of about 2%.

Even so, CEO Steve Bratspies said it’s important to keep the positives in view, too, including advancements made in the first quarter.

“We continue to make progress on several of our ‘Full Potential’ initiatives,” Bratspies said. “We expanded our innerwear innovation globally, successfully completed a key technology milestone, progressed on our industry-leading sustainability initiatives and continued to generate cost savings across the organization. We’re confident in the progress we’re making to become a more consumer-centric, data-driven company that consistently generates higher sales and profit growth over time.”