Hanesbrands Has Plenty of Ways to Grow the Champion Brand
Despite a challenging retail environment for some brick-and-mortar stores, Hanesbrands (NYSE: HBI) continues to post revenue and earnings growth. In the third quarter, revenue grew 1%, and adjusted earnings increased by 4% year over year. That doesn't look like much, but it's a good sign for a value stock that's trading for around 10 times trailing earnings.
Investors are completely focused on the negative side of Hanesbrands, which is driven by poor performance from the innerwear segment. U.S. innerwear sales (which is one-third of total sales) slid 3.5% year over year last quarter, reflecting a tough environment for brick-and-mortar stores.
However, 7.q% growth in the international segment more than offset the decline in the rest of the business. Management expects international to increase as a mix of total sales, which is already the company's largest segment. A key part of the growth strategy is expanding the Champion brand, which continues to experience tremendous momentum, with sales up 26% excluding the mass retail channel last quarter.
Source Fool.com
