Hanesbrands Inc., the parent of Champion and Duofold, said it does not expect to achieve its earnings target in 2009 and that it its amending its credit facility.
The company predicted low- to mid-teens percentage unit volume declines in early 2009 amid lower consumer spending, and said it was highly unlikely that it would meet its long-term sales growth target of 1.0% to 3.0% in 2009. The company also said it does not expect to achieve its long-term profit growth goal of 10.0% to 20.0% in 2009.
The recession's effect on sales and increased pension costs as a result of the stock market decline will present challenges in 2009, Hanesbrands said in a statement. It expects pension expense of about $21.0 million in 2009, compared with a pension income of $12.0 million in 2008.
Although the company was in compliance with all debt covenants, Hanesbrands was trying to amend its first lien credit agreement amid an uncertain economic environment, Chief Financial Officer Lee Wyatt said. He said the result would become known in two weeks' time.
The company expects capital expenditures of about $100.0 million to $130.0 million in 2009, and $300.0 million to $350.0 million over the next three years.