Feb 24, 2009
Hanesbrands says may not meet '09 profit goal
Feb 24, 2009
* Does not expect to achieve 2009 profit goal
* Trying to amend credit agreement
* Says in compliance with all debt covenants
Feb 24 (Reuters) - Underwear maker Hanesbrands Inc (HBI.N) on Tuesday said it does not expect to achieve its earnings target in 2009 and that it its amending its credit facility.
The company, which expects low to mid-teen percentage unit volume declines in early 2009 amid lower consumer spending, said it was highly unlikely that it would meet its long-term sales growth target of 1 percent to 3 percent in 2009.
The company said it does not expect to achieve its long-term profit growth goal of 10 percent to 20 percent in 2009.
The recession's effect on sales and increased pension costs as a result of the stock market decline will present challenges in 2009, Hanesbrands said in a statement.
It expects pension expense of about $21 million in 2009, compared with a pension income of $12 million in 2008.
Although the company was in compliance with all debt covenants, Hanesbrands was trying to amend its first lien credit agreement amid an uncertain economic environment, Chief Financial Officer Lee Wyatt said. He said the result would become known in two weeks' time.
The company expects about $250 million in restructuring and related charges to cost-saving efforts over the three-year period ending this year. To date, it has announced $222 million in such charges and recognized $209 million.
Hanesbrands sees annualized gross savings of $200 million or more between the end of the 2008 and 2011. Last year, it generated about $75 million in gross cost reductions towards this target.
The company expects capital expenditures of about $100 million to $130 million in 2009, and $300 million to $350 million over the next three years.
Shares of the company, which was spun off from U.S. foodmaker Sara Lee Corp (SLE.N) in 2006, closed at $6.47 Monday on the New York Stock Exchange. For related alerts please double click (Reporting by Mihir Dalal in Bangalore; Editing by Amitha Rajan)
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