HanesBrands CEO Steve Bratspies told CNBC on Thursday that 30% of the apparel maker’s inventory is tied up in transit, significantly higher than before the pandemic, reflecting the logistics problems hampering the global economy.
“We have more inventory at this stage in development right now, and we’re trying to get through and get to the right place at the right time,” Bratspies told Squawk on the Street after the company reported third quarter earnings victory and loss of profits earlier in the day.
“This is definitely higher than the normal operating base that we would like to see,” he said, adding that inventory in transit for the company was usually around 10%.
HanesBrands – parenting Champion, Hanes and Bonds among others – is not alone in their situation. Stanley Black & Decker CEO Jim Laurie told CNBC last week that the toolmaker had $ 800 million worth of goods in transit, up from $ 300 million at the start of the 2020 pandemic.
Taken together, the CEO’s comments shed light on how supply chain bottlenecks materialized during the Covid crisis are hitting individual companies as they try to meet strong consumer demand and prepare for the busy holiday shopping season.
Despite the difficulties, Bratspies believes that HanesBrands is in a “good position” compared to some of its competitors in the apparel industry.
“While we are struggling to get it to the right place at the right time, we have stocks and I think that makes us a little different,” said Bratspies, who took over as CEO of HanesBrands. in August 2020… He previously served as Director of Merchandising for Walmart. “I’m really glad we have the inventory.”
According to Bratspies, HanesBrands works closely with its shipping partners to ensure that goods are delivered on time to their respective destinations. However, when David Faber asked CNBC if there really were “any fixes” the company could take, Bratspies replied, “Honestly, I think it’s a matter of time.”
“I agree that this indicator is on the way where it is. Earlier this year, we made the decision to actually increase production because we had foreseen it. year, “Bratspies said.” I just think it takes time to practice. “
HanesBrands shares fell 2.6% on Thursday as Wall Street saw mixed quarterly results for the company. The company earned 53 cents a share, beating expectations by 6 cents, while revenues of $ 1.79 billion were just below analysts’ forecasts of $ 1.8 billion.