Why Hanesbrands share is climbing 22% today

What happened

Actions of Hanesbrands (NYSE: HBI) rose 22% in morning trading on Tuesday after the basic apparel maker reported strong fourth-quarter sales and profit growth.

So what

The results indicate that Hanesbrands was uniquely positioned to capitalize on the health and wellness trends that developed in the wake of the coronavirus pandemic. Its core brands like Playtex, Maidenform and Wonderbra paired well with the casual wear chosen by consumers, as did its Champion brand.

Sales for the quarter reached $ 1.8 billion, from $ 1.75 billion, and significantly exceeded consensus estimates of $ 1.64 billion.

Although Hanesbrands’ adjusted earnings were $ 0.38 per share, down from $ 0.46 last year, they beat Wall Street expectations by $ 0.29 per share.

Now what

Hanesbrands’ ‘innerwear’ segment saw sales jump 13% year over year and was able to gain share in the children’s market, while sportswear sales increased 11% due to strong worldwide sales of Champion, a good turnaround after Target stopped wearing the C9 line last year.

Its international business also continued to improve with sales up 2%, although at constant exchange rates they were down 3% from last year. Hanesbrands also declared a dividend of $ 0.15 per share, the 32nd consecutive quarter of payment to shareholders.

With a forecast for first quarter sales growth of 14% in the middle of its range with a 10% increase in operating profits, Hanesbrands is poised to rise further.