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Magazine > Fortune > News Content
Hanesbrands shares drop despite 4Q earnings
 
Author: AP       1/29/2009 6:56:49 PM
Hanesbrands shares down after higher-than-expected 4Q earnings, though sales fall short

NEW YORK (AP) -- Shares of Hanesbrands Inc. fell with the broader market Thursday, even after the company said its fiscal fourth-quarter results beat analyst expectations, although sales were weak.

The stock slipped a penny to end at $9.77. The stock has traded between $8.08 and $37.73 during the past 52 weeks.

The Dow Jones industrials closed down 226 points, while the broader indexes each lost more than 3 percent.

Late Wednesday, the Winston Salem, N.C.-based company said fourth-quarter profit fell 64 percent, to $17.9 million, or 19 cents per share, but excluding restructuring and other charges, net income was 50 cents per share, ahead of the 37 cents per share analysts polled by Thomson Reuters, on average, predicted.

Revenue fell 11 percent to $1.04 billion from $1.16 billion last year, sort of the $1.08 billion analysts predicted.

"Sales trends declined considerably during the quarter and will be pressured in the first half of 2009 by further declines in customer traffic and retailers' inventory reduction efforts," said C.L. King analyst Scott Krasik in a note to investors on Thursday.

The maker of Hanes, Champion, and Playtex apparel said its 4 percent price increase, going into affect next week, will help mitigate the difficult consumer spending environment.

Krasik said that while sales are expected to weaken in the first quarter, "they will begin to flatten as price increases take effect and the replenishment nature of Hanesbrands' products kicks in."

He kept his "Neutral" rating and said any increase of the stock price will be limited until sales trends stabilize.

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