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Hanesbrands’ revenue up, earnings down

October 25th, 2007 · No Comments

Hanesbrands Inc. announced today that its third-quarter 2007 earnings were 23 percent lower than in the same quarter last year, but its revenue rose 3.1 percent.

The Winston-Salem-based underwear, outerwear and hosiery manufacturer said spinoff expenses cut into profits. Quarterly profit for the maker of Wonderbra, Champion and Playtex apparel fell to $38.9 million, or 40 cents per share, from $50.3 million, or 52 cents per share in 2006.

Hanesbrands’ third-quarter revenue rose to $1.15 billion from $1.12 billion last year. Outerwear sales were up, but sales of underwear, the company’s largest segment, fell. Hanesbrands cited weakness in children’s underwear and also in licensed male underwear sold through department stores.

Hanesbrands pointed to the 10 percent growth in its operating profit — the measure the company uses to assess its underlying performance — as a sign of better-than-expected cost savings.

“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,” Hanesbrands Chief Executive Officer Richard A. Noll said in a statement.

The company said the primary reason for the decline in earnings was higher interest expense. Hanesbrands was spun off from Sara Lee in September 2006. Interest expense more than doubled to $40.3 million, from $17.6 million last year.

Hanesbrands Inc. has one manufacturing facility in Surry County. The plant is at 645 W. Pine St. in Mount Airy.

Hanesbrands (NYSE: HBI) stock was up 12.5 percent from Wednesday’s close to about $29 at midday today.

Tags: Businesses

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