HanesBrands lowers FY sales outlook

US apparel company HanesBrands has lowered its full-year sales outlook after reporting a 4.9 percent drop in the second quarter.

The company posted net sales of 1.44 billion dollars in the three months to July 1, down from 1.51 billion dollars a year earlier.

“We reported second-quarter results in line with our outlook,” said CEO Steve Bratspies in a statement.

“We also delivered sequential gross margin improvement, further reduced inventory, generated positive operating cash flow, and began paying down debt earlier than expected,” he said.

HanesBrands swung to a loss from continuing operations of 22 million dollars in the second quarter from a profit of 93 million dollars the prior year.

Bratspies continued: “We’re confident in our ability to exit the year with gross margin in the high 30 percent range, generate 500 million dollars of operating cash flow, and pay down more than 400 million dollars of debt, despite the difficult apparel market, particularly in Australia and the US activewear category, which caused us to adjust our second-half outlook.”

For the full year, the company now expects net sales from continuing operations of approximately 5.80 billion dollars to 5.90 billion dollars. That’s down from its previous estimate of between 6.05 billion dollars and 6.20 billion dollars.

At the guidance midpoint, it would represent an approximate 6 percent drop in FY sales.