Hanesbrands Inc., the parent of Champion, reported sales declined 8% $1.06 billion in the third quarter. But the company said significant net retail shelf-space and distribution gains are expected to drive approximately 5% sales growth in 2010.
Sales for the Innerwear segment in the quarter declined 10% with weakness in intimate apparel and socks.
Outerwear segment sales decreased by 5% in the quarter with sales strength to retailers, including increased Champion brand activewear sales, offset by lower sales to the wholesale channel. Management said Champion has confirmed space and distribution gains in sporting goods, department stores and mid-tier accounts for next year. Overall outerwear sales growth in 2010 are expected to be driven by a significantly-expanded Just My Size casualwear program with Wal-Mart.
International segment sales decreased by 8%, and Hosiery segment sales declined by 12%.
Earnings in the quarter more than doubled to $41.1 million, or 43 cents a share, from $15.9 million, or 17 cents, a year ago. Excluding non-recurring items, EPS were 63 cents, up 21% due to higher operating profit and a lower effective income tax rate.
Operating profit margin increased 160-basis points to 10.5% due to the benefits of price increases, cost savings initiatives, lower cotton costs, and lower bad debt, distribution and IT expenses.
