Hanesbrands Inc. on Wednesday posted a loss in the fourth quarter and lower full-year profits, but reaffirmed it expects sales growth of 5 percent in 2010.
This story first appeared in the January 28, 2010 issue of WWD. Subscribe Today.
For the three months ended Jan. 2, the loss was $1.1 million, or 1 cent a diluted share, against income of $17.9 million, or 19 cents, in the year-ago quarter.
Sales fell 4.5 percent to $988.7 million from $1.04 billion, with hosiery slipping 7.9 percent to $54.4 million, direct-to-consumer falling 2.7 percent to $94.7 million and outerwear volume dipping 1.2 percent to $279.1 million. Innerwear sales inched down 1.1 percent to $439.7 million, while international sales were flat at $120.3 million. Gross margin picked up to 33.4 percent of sales from 31.6 percent in the year-ago quarter.
For the year, profits fell 59.7 percent to $51.3 million, or 54 cents a diluted share, from $127.2 million, or $1.34. Total sales fell 8.4 percent to $3.89 billion from $4.25 billion. As in the quarter, hosiery sustained the biggest decline in volume, down 14.6 percent to $185.7 million from $217.4 million.
Richard A. Noll, chairman and chief executive officer, in an after-market conference call with Wall Street analysts, reiterated expectations of a 5 percent increase in sales in the new year and noted the firm’s goals of a 50 to 100 basic point improvement in operating margin and a decline in interest expenses of $20 million to $25 million.
“When you add all of this together,” he said, “we can see earnings per share growth of at least 25 percent and up to 35 percent or more in 2010.”
The company has three contract sewing operations in Haiti, two of which were affected by the Jan. 15 earthquake. Production has resumed in the company’s contract T-shirt sewing operations and, through the addition of new contractors and higher production at company-owned plants, T-shirt production should return to pre-earthquake levels as soon as mid-February.