HanesBrands Inc., the parent of Duofold and Champion, said that while it's gaining market share across several categories, higher cotton costs and higher expenses to service sales growth depressed fourth quarter earnings.
Revenues in the latest quarter ended Dec. 31 climbed 16.3% to $1.15 billion. Earnings were $28.1 million, or 29 cents a share, and were reduced by 14 cents a share in debt-refinancing expenses. In the prior-year period, HBI lost $1.1 million, or a penny per share. Excluding 57 cents a share in charges in the prior-year period, HBI earned 56 cents a share in Q4 2009.
By segment, Innerwear sales increased 12% in the quarter but operating profit decreased 10% in the quarter, reduced by input-cost inflation and service expenses. Outerwear segment sales increased 31% in the quarter with across-the-board strength in retail activewear (Champion, Duofold), retail casualwear (Just My Size) and wholesale casualwear (Hanes). The Outerwear segment’s operating profit was down slightly in the fourth quarter.
For the full year, profits more than tripled to $211.3 million, or $2.16 a share, from $51.3 million, or 54 cents, in 2009. Revenues increased 11.2% to $4.33 billion.
For 2011, Hanes expects continued double-digit growth with projected net sales in the $4.85 billion to $5.0 billion range and EPS of approximately $2.60 to $2.80. HBI expects the magnitude of price increases will vary this year from flat to low-single digits up to 30% or more for cotton-intensive categories. For the first three quarters, Hanesbrands said it knows the majority of its costs, with cotton prices fixed through October.
