HanesBrands Inc., the well-known owner of Champion and Playtex brands, recently released its third-quarter financial results. While the company’s performance exceeded expectations, its outlook for the future left investors disappointed. HanesBrands, headquartered in Winston-Salem, North Carolina, experienced a 3.1% decline in net sales during the third quarter. The total net sales for this period were $1.81 billion, a drop from $1.87 billion in the same period last year. This decrease can be attributed to the negative impact of the Covid-19 pandemic and HanesBrands’ decision to exit the C9 Champion mass program and DKNY intimate apparel license, which accounted for $119 million in sales in the previous year.

Despite these declines, HanesBrands managed to partially offset the loss by generating $179 million in sales from personal protective garments. The company reported a quarterly net income of $103.3 million, which is down 44.2% from $185.1 million in the previous year. Diluted earnings per share also experienced a decline of 43%, from $0.51 to $0.29. However, adjusted earnings per share remained steady at $0.42.

MarketWatch reported that Wall Street analysts had expected HanesBrands to report adjusted earnings per share of $0.39 on sales of $1.66 billion, making the company’s actual results more favorable than anticipated. U.S. innerwear sales, excluding protective garments, saw an 8.4% increase, rising to 37% when including sales from the newly added category. Conversely, U.S. activewear sales dropped by 41% due to the decrease in sports apparel revenues amid the ongoing pandemic. International sales experienced a 5% decline or a 7% decline on a constant currency basis.

Despite the positive financial results overall, HanesBrands provided a less optimistic outlook for the fourth quarter. The company anticipates net sales ranging from $1.60 billion to $1.66 billion and earnings per share between $0.24 and $0.29. Adjusted earnings per share are predicted to be between $0.25 and $0.30. These projections fell short of the EPS outlook of $0.44 on sales of $1.71 billion expected by FactSet analysts.

HanesBrands CEO Steve Bratspies expressed satisfaction with the third-quarter results and highlighted the improvements seen across the business. He also mentioned an ongoing review of the company’s operations and the development of a growth strategy, which will be partially revealed in the fourth quarter. Year-to-date net sales for HanesBrands amounted to $4.86 billion, representing a 6.8% decrease from the previous year. Net income for the first three quarters reached $256.6 million, or $0.72 per diluted share, a significant decrease from $415.7 million, or $1.14 per diluted share.

As a result of the disappointing financial outlook, HanesBrands’ shares experienced a 20% decrease on Thursday afternoon. Despite the challenges posed by the pandemic and the decline in sales, the company remains committed to implementing its growth strategy and maintains an optimistic outlook for its future progress.

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