Shares of Hanesbrands Inc. leaped 12.2 percent Thursday after the company’s lower second-quarter earnings exceeded estimates and it said it’s poised to pick up market share in a weak economy.
Net income declined 46.6 percent to $30.6 million, or 32 cents a diluted share, from $57.3 million, or 60 cents, a year earlier. Sales for the quarter ended July 4 dropped 8 percent to $986 million from $1.07 billion.
Factoring out restructuring and other charges, earnings of 42 cents a share beat out Wall Street’s projection of 40 cents.
For the first half, earnings fell 88 percent to $11.2 million, or 12 cents a share, as sales decreased 10.5 percent to $1.84 billion.
Investors liked what they saw and drove the stock up $2.09 on Thursday to $19.22, its highest close since last Oct. 2. Hanesbrands registered the second largest percentage gain of all stocks monitored by WWD.
Hanesbrands’ largest business, innerwear, saw a sales decline of 3.9 percent to $611.8 million — an improvement over the 5.5 percent fall in the first quarter.
Richard Noll, the company’s chairman and chief executive officer, told Wall Street analysts on a conference call that the business is poised to gain ground.
“Our back-to-school innerwear promotional offerings are stronger than last year,” Noll said. “We have substantially increased in-store presence at all of our major accounts.”
In August, Hanesbrands will launch the Playtex 18 Hour Bra at Macy’s, giving the bra the equivalent of a retail triple play with distribution in the mass, midtier and department store channels.
The company is also negotiating space in stores for next year and has confirmed new program launches and expansions for its Hanes brand at J.C. Penney, Kohl’s, Target and Wal-Mart, he said.
Noll said the company, which also makes outerwear and hosiery, would spend an additional $10 million to try to grab additional market share and cement gains across its businesses.