HanesBrands Inc., the parent of 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.  Fourth quarter 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 for debt refinancing and restructuring activities, HanesBrands earned 56 cents a share in 2009 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.


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.


During the year, Hanesbrands' share grew nearly 5 points in men's underwear  and 1 to 2 points each for socks, activewear, plus-size women's apparel, and bras.


For 2011, Hanes expects continued double-digit growth with projected net sales of approximately $4.85 billion to $5.0 billion and EPS of approximately $2.60 to $2.80.


High single-digit net sales growth is forecast for the first quarter with double-digit growth thereafter, propelled by price increases, its Gear for Sports acquisition, and shelf space gains. First-quarter profits are expected to decrease slightly with higher input costs only being partially offset by mid-quarter price increases. Second-quarter operating profit is expected to increase by double-digits while EPS may decrease slightly due to a very low income tax rate in the year-ago quarter.


The company said it 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 fixed through October.