Consumer goods company Hanesbrands Inc. (HBI) Wednesday reported higher profit for the third quarter of fiscal 2009, driven by higher operating profit and lower income tax rate.
The company's third-quarter net income increased to $41.14 million from $15.92 million last year. Earnings per share were $0.43 compared with $0.17 in the prior-year quarter.
The company stated that earnings per share were benefited from higher operating profit and a lower effective income tax rate. The effective income tax rate was 14% in the quarter, down from a rate of 24% in last year's quarter.
Earnings per share excluding actions rose 21% in the third quarter to $0.63 from $0.52 a year ago. On average, 3 analysts polled by Thomson Reuters expected the company to report profit of $0.52 per share for the quarter. Analysts' estimates typically exclude special items.
The company also reported total net sales of $1.06 billion, down from $1.15 billion last year. Analysts expected revenues of $1.08 billion for the quarter.
The company said that it increased trade spending, especially for back-to-school programs, to support retailers and position the company for future growth opportunities.
The company's sales for the Innerwear segment were down 10% with weakness in intimate apparel and socks. Male underwear sales were comparable to last year. Outerwear segment sales declined 5% in the quarter with sales strength to retailers, including increased Champion brand activewear sales, offset by lower sales to the wholesale channel. International segment sales were 8% lower, and Hosiery segment sales declined 12%.
Hanesbrands said it is increasing its production capacity to meet 2010 growth expectations. In early October, production began at the company's new Nanjing, China, fabric production plant, which will supply the company's Southeast Asia sewing facilities. The company is also substantially ramping up contract production as needed.
The company announced this week that it expects to close a sheer hosiery manufacturing facility in Winston-Salem with 240 employees in 2010 in light of the continuing long-term trend of declining sheer hosiery consumption in the US.
Hanesbrands also said that it today closed the previously announced sale of its yarn production plants to Parkdale America, LLC.
For the nine-month period, the company's net income was $52.37 million or $0.55 per share, compared with $109.29 million or $1.14 per share in the previous year. Net sales declined 9.7% to $2.90 billion from $3.21 billion in the same period of fiscal 2008.
Going ahead, the company said that its sales planning assumption continues to be that consumer-spending levels remain constant through 2009. The company also sees 2010 incremental sales of approximately 5% from net shelf-space gains at retailers.
"We have some of the strongest brands in the apparel industry, and we will enter 2010 with top-line momentum. For example, we expect at least high-single-digit growth of men's underwear sales in 2010 solely as a result of net space gains for our Hanes brand at all major accounts and new distribution in the mid-tier, club-store and dollar-store channels, said Richard Noll, Chairman and Chief Executive Officer of Hanesbrands.
The Innerwear segment, which consists of replenishment-oriented products, will account for more than half of the company's expected sales increases from space gains in 2010. The company also expects net space gains for the Innerwear segment's intimate apparel category to add mid-single-digit sales growth next year.
Further, Hanesbrands said that in early 2010, it will provide its expectations for total 2010 net sales growth based on the space gains, point-of-sale trends for the holiday period, the outlook for the consumer climate in 2010, and other factors.
HBI closed Wednesday's trading at $21.81, down $1.09, on a volume of 1.17 million shares.
For comments and feedback contact: editorial@rttnews.com
June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.