HanesBrands announced on Thursday net sales for the fourth quarter dove 12% to $1.3 billion, hurt by dismal sales at the apparel maker’s Champion brand, particularly in the U.S, and a challenging Australia market.

Global Champion brand sales decreased 23% on a reported basis, as compared to prior year, with U.S. sales decreasing 30%, driven by the combination of challenging activewear apparel market dynamics, said the North Carolina-based firm.

By category, innerwear sales decreased approximately 1%, while activewear sales decreased 24%, with decreases across channels and brands in the quarter, thanks to the ongoing combination of challenging activewear apparel market dynamics, including soft consumer demand and cautious ordering from retailers.

International sales decreased approximately 7% on a constant currency basis compared to prior year. In constant currency, innerwear growth in the Americas and Champion growth in China were more than offset by a decrease in Australia, which was driven by a very challenging macroeconomic environment, as well as Champion decreases in Europe, Japan and Canada, added the company.

​“Our fourth quarter performance did not meet our expectations as the sales environment proved to be more challenging than expected. However, we saw several positive indicators that give us confidence margins and leverage have reached a positive inflection point and demonstrate progress on our strategy to simplify our business, reduce inventory, cut costs, and reignite Innerwear,” said Steve Bratspies, CEO.

“Importantly, we exceeded our year-end goals in all four key 2023 performance metrics, including gross margin, inventory, operating cash flow and debt reduction. During the quarter, new products and permanent retail space gains drove increased market share in U.S. Innerwear, which we expect to build upon as we rollout another record year of innovation and increase our brand marketing investments. For 2024, we believe we’re well positioned for continued margin improvement, another year of strong cash generation and continued debt reduction.”