Hanesbrands Inc., which owns Champion and Hanes, reported third quarter
sales increased 3.1% to $1.15 billion but earnings decreased 22.1% to
$38.9 million, or 40 cents a share, from $50.3 million, or 52 cents,
primarily as a result of higher interest expense associated with the
company’s independent structure following its spinoff in September 2006.

“We
delivered solid performance in the quarter,” said Hanesbrands Chief
Executive Officer Richard A. Noll. “We increased sales in a mixed
retail market, we executed well against our initiatives, and we
generated strong cash flow that we used to prepay debt and repurchase
shares.”

Total net sales
in the quarter increased 3.1% to $1.15 billion, and total net sales in
the first nine months of the fiscal year increased by 1.3% to $3.32
billion. The year-ago quarter and nine-month period ended Sept. 30,
2006.

For the quarter and the first nine months, the company has
recorded strong sales growth in the outerwear segment, while sales of
innerwear, the company’s largest segment, have declined.

Innerwear
sales for the first nine months are down 0.7%. The decline was
primarily a result of softness in children’s underwear and licensed
male underwear in the department store channel, although continued
strong intimate apparel and sock sales partially offset the decline.

Outerwear
segment sales increased by 4.7% for the first nine months, reflecting
strong sales of Hanes brand casualwear and Champion brand activewear.
The strong outerwear performance has been fueled by a return to
focusing on basic apparel in the mass retail channel for casualwear.

International
sales increased by 2.6% year-to-date on the strength of the European
casualwear business. Year-to-date sheer hosiery segment sales are down
by 0.9%, significantly better than historical trends, while hosiery
sales increased in the quarter by 13.1% on the strength of core product
growth.

Operating profit in the quarter increased to $105.7
million, from $93.9 million a year ago. For the first nine months,
operating profit was $262.7 million compared with $270.0 million in the
year-ago period.

The company’s operating profit margin excluding
actions, a measure the company uses to better assess underlying
performance, was 10.0 percent for the quarter and the nine-month period.

“We
are pleased that our year-to-date operating profit margin excluding
actions has edged higher than last year,” Noll said. “Our
cost-reduction efforts are slightly ahead of schedule, which has
allowed us to exceed our goal of offsetting the increased costs we have
as a standalone company.”

Diluted earnings per share were 40
cents in the quarter, compared with 52 cents a year ago, and for the
nine-month period diluted EPS was 79 cents versus $1.91 a year ago. The
decline in the quarter was primarily a result of increased interest
expense associated with the company’s independent structure. In the
nine-month period, the decline in diluted EPS reflected increased
interest expense, higher restructuring and related expenses, and a
higher tax rate.

Diluted EPS excluding actions was $0.48 in the
quarter compared with $0.75 a year ago. In the nine-month period,
diluted EPS excluding actions was $1.29 versus $2.33 a year ago.

Hanesbrands
used its continued strong cash flow from operations to prepay long-term
debt in the quarter by $75 million and repurchase $29 million of
company stock. For the first nine months of the year, Hanesbrands has
paid down $128 million of long-term debt, repurchased $44 million in
company stock and voluntarily contributed $48 million to its qualified
pension plans.

Hanesbrands
said it continues to invest in its brands and product marketing,
focusing on its largest and strongest brands. On Sept. 3, Playtex
launched its “Girl Talk” advertising and marketing campaign, which
takes a fun, honest and irreverent approach to women’s everyday
bra-fitting challenges. A video of outtakes from the filming of the
Playtex television commercial was watched by more than 4 million
visitors on YouTube.com, one of the highest 24-hour view rates for a
roadblock ad ever recorded on the video Web site.

The latest
“Look Who” Hanes advertising for ComfortSoft men’s underwear featuring
Michael Jordan and Cuba Gooding Jr. and for the All-Over Comfort Bra
featuring Jennifer Love Hewitt continue to perform well with consumers.

Hanesbrands
has continued to reach key milestones in its global supply chain
strategy of improving competitiveness by operating fewer, bigger
facilities and moving production to lower-cost countries. In August,
Hanesbrands acquired its second offshore textile plant, the
1,300-employee textile manufacturing operations of Industrias Duraflex,
S.A. de C.V., in San Juan Opico, El Salvador. Hanesbrands has also
selected Nanjing, China, as the site to build a textile production
plant, which will be the first company-owned textile production
facility in Asia.

During the third quarter, Hanesbrands
substantially completed the separation of its pension plan assets and
liabilities from the company’s former parent. As a result, Hanesbrands’
pension plans in total are approximately 97% funded.

“Since our
spinoff, we have increased sales, expanded our margins, and
strengthened our balance sheet,” Noll said. “Our strategic initiatives
of investing in our brands, reducing costs and driving cash generation
are creating value and positioning us to achieve our long-term growth
goals.”

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HANESBRANDS INC.
Condensed Consolidated Statements of Income
(Dollars in thousands, except per-share amounts)
(Unaudited)

Quarter Ended

Nine Months Ended

September 29,
2007

September 30,
2006

% Change

September 29,
2007

September 30,
2006

% Change

Net sales:

Innerwear $ 635,167 $ 651,183 $ 1,917,118 $ 1,930,282
Outerwear 349,352 318,320 896,583 856,129
Hosiery 64,120 56,707 189,215 190,894
International 103,341 93,126 303,119 295,564
Other

13,587

10,796

46,629

36,085

Total segment net sales 1,165,567 1,130,132 3,352,664 3,308,954
Less: Intersegment

11,961

11,164

37,257

36,993

Total net sales 1,153,606 1,118,968 3.1 % 3,315,407 3,271,961 1.3 %

Cost of sales

792,587

753,337

2,234,352

2,183,977

Gross profit 361,019 365,631 -1.3 % 1,081,055 1,087,984 -0.6 %
As a % of net sales 31.3 % 32.7 % 32.6 % 33.3 %

Selling, general and

administrative expenses

253,233 262,426 773,817 808,393
As a % of net sales 22.0 % 23.5 % 23.3 % 24.7 %