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Business30% of our inventory is tied up in transit, higher than pre-Covid

30% of our inventory is tied up in transit, higher than pre-Covid

HanesManufacturers CEO Steve Bratspies advised CNBC on Thursday that 30% of the attire maker’s inventory is tied up in transit, a considerably higher degree than pre-pandemic that displays the logistics challenges hampering the worldwide economic system.

“We have more inventory in that stage in the pipeline right now that we’re trying to move through and get to the right place at the right time,” Bratspies mentioned in a “Squawk on the Street” interview after the corporate reported a third-quarter earnings beat and a income miss earlier in the morning.

“It’s definitely higher than a normal operating basis we like to see,” he mentioned, including that usually in-transit inventory stood at about 10% for the corporate.

HanesManufacturers — the mum or dad of Champion, Hanes and Bonds, amongst others — is not alone in its present state of affairs. Last week, Stanley Black & Decker CEO Jim Loree advised CNBC the toolmaker had about $800 million of items in transit, up from about $300 million at first of the pandemic in 2020.

Taken collectively, the CEOs’ feedback make clear how the availability chain bottlenecks which have materialized through the Covid disaster are hitting particular person corporations as they attempt to meet robust client demand and prepare for the busy vacation purchasing season.

Despite the challenges, Bratspies mentioned he believes HanesManufacturers is in a “good position” relative to some of its rivals in the attire trade.

“While we’re struggling to get it in the right place at the right time, we have the inventory, and I think that’s a bit of a differentiator for us,” mentioned Bratspies, who took over as HanesManufacturers CEO in August 2020. He’d beforehand served as Walmart’s chief merchandising officer. “I actually am glad we have the inventory we have.”

HanesManufacturers is working carefully with its transportation companions to make sure merchandise get to their applicable locations in a well timed method, Bratspies mentioned. However, when requested by CNBC’s David Faber if there are actually “any fixes” the corporate can pursue, Bratspies responded, “Honestly, I think it’s a matter of time.”

“I’m OK with that in-transit number being where it is. We made a decision earlier in the year to actually increase our production because we saw this coming. I think it positions us OK for the fourth quarter and the beginning of next year,” Bratspies mentioned. “I just think it’s going to take some time to work out.”

Shares of HanesManufacturers have been decrease by roughly 3% on Thursday as Wall Street digested the corporate’s combined quarterly outcomes. The firm earned 53 cents per share, topping expectations by 6 cents, whereas income of $1.79 billion fell simply brief of analysts’ forecasts of $1.8 billion.

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