By Christiana Sciaudone
Investing.com -- Hanesbrands (NYSE:HBI) tumbled 21% on Thursday after saying expenses would increase for the fourth quarter. The company also saw sales tumble as sporting events were canceled and college students stayed home.
The company provided fourth quarter guidance with net sales between $1.6 billion and $1.66 billion, and expects to continue facing profitability headwinds, with expenses pressuring margins. Adjusted EPS is expected to range from 25 cents to 30 cents.
Earnings per share for the third quarter came in at 42 cents versus the estimated 38 cents on sales of $1.81 billion, higher than the expected $1.65 billion, but below the $1.87 billion reported a year earlier.
While sales at Athleta and Lululemon Athletica Inc (NASDAQ:LULU) have been solid during the pandemic, activewear sales at Hanesbrands dropped 41%, which also includes exiting a line of Champion-branded products. Considering activewear sales without the line, sales declined 27%.
"The vast majority of these declines occurred in the segment’s sports apparel business, which was significantly impacted by Covid-related issues, such as cancelled sporting events and the closure of college bookstores," the company said in a statement.
On the upside, Hanesbrands received authorization from the U.S. Food and Drug Administration for a surgical face mask developed in conjunction with North Carolina State University, the University of North Carolina at Chapel Hill and UNC Health.