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Why Hanesbrands’ Stock Fell 7.3% in November

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Dec. 4 2018, Updated 12:50 p.m. ET

Stock down 7.3%

Hanesbrands (HBI) is one of the key names in the US apparel space. The company’s portfolio consists of brands like Hanes, Champion, and Playtex. The company’s Champion brand remains robust. However, weakness in the intimate apparel business has been affecting sales growth.

Hanesbrands considers challenging traffic and shutting down stores at mid-tier and department channels as the drivers of its subdued intimate apparel business. Plus, Sears Holdings’ bankruptcy has added to the struggle. Third-quarter innerwear sales fell 7.0% due to slow replenishment orders.

All these factors have affected the stock price. In November, the stock fell 7.3%. On a year-to-date basis, Hanesbrands stock is down 22.7% to $16.16 as of December 3.

However, management expects better shipment and point-of-sale alignment to boost innerwear sales in the fourth quarter. Fourth-quarter sales are expected to remain unchanged year-over-year.

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Peers’ stock price movements

Under Armour (UAA) rose 8.0% in November and 66.3% year-to-date. Its strategic endeavors, along with strong growth in its international market, are driving the stock price.

VF Corporation (VFC) was down 1.9% in November but up 12.2% year-to-date. VFC’s Vans and North Face businesses are driving its top line. Weakness in its jeans business has been the offsetting factor.

Looking ahead for Hanesbrands

For Hanesbrands’ international business, the trends remain impressive. In the third quarter of 2018, international sales rose 11.3%. Hanesbrands’ top line is also finding support from acquisitions.

Some of the company’s recent acquisitions include Alternative Apparel and Bra N Things. Champion brand sales increased 30% globally on a constant-currency basis. For the fourth quarter, management expects strength in the Champion brand to boost its top lines for both its activewear and international segments’ sales.

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