Hanesbrands Ramps Up Face Mask Production Amid Coronavirus
In an attempt to join the fight against the rapid spread of the novel coronavirus, many companies are increasing focus on production of protective gear like face masks and medical gowns. Such move has helped some companies stay afloat amid the crisis. In this regard, Hanesbrands Inc. (HBI) is producing cloth face coverings and medical gowns for the U.S. government amid the pandemic. In fact, the company announced that till now it has delivered over 450 million cloth face coverings along with more than 20 million medical gowns to the U.S. government.
Also, the company launched face masks under Hanes and Champion brands. These masks will be available to the public as well as for business-to-business customer orders. The company has launched a 3-ply all-cotton face mask which is reusable, washable as well as breathable under the Hanes brand. These masks will be available across various mass merchandise, grocery, drug, dollar stores as well as home improvement retailers. Also, shoppers can buy the newly-introduced masks online via Hanes.com website.
Further, Hanesbrands has floated a 1-ply polyester-spandex blend face mask under its Champion brand. Notably, these face masks can be bought online on Champion.com website. Moreover, the company is on track with introducing two more varieties of masks for this brand. In its last earnings call, management stated that it expects revenues from this new protective gear business to cross $300 million in 2020.
Meanwhile, Hanesbrands has undertaken actions like preserving cash and strengthening liquidity to deal with the crisis. In this regard, the company has been curbing discretionary and capital spends, managing inventories as well as temporarily cutting salaries and furloughing certain employee groups. Such temporary pay cuts, furloughs and lower discretionary spending on media and marketing are likely to save nearly $200 million in 2020.
As consumers are increasingly resorting to online shopping, Hanesbrands remains focused on developing its online sales. In the first quarter of 2020, the company’s total online sales increased 5% globally. Hanesbrands, which is global partner with Amazon (AMZN), is increasing investments in its online business to keep pace with consumers’ evolving shopping patterns especially as the coronavirus pandemic increases digital shopping penetration.
We note that shares of this Zacks Rank #3 (Hold) company have rallied 44.7% in the past three months compared with the industry’s growth of 29.6%.
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