HBI Hanesbrands Inc

By Allison Prang 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (August 2, 2018).

Shares of Hanesbrands Inc. tumbled 19% Wednesday after the company said it wasn't renewing a contract to sell an exclusive line of Champion activewear to Target Corp.

The company's current contract with the big-box retailer that allows Target to sell an exclusive line as part of the Champion brand, called C9 by Champion, expires at end of January 2020, Hanesbrands said.

The company said it doesn't expect the end of the contract to change its projection of Champion sales topping $2 billion by 2022

In the past year, Hanesbrands took in about $380 million in sales from the C9 line, the company said Wednesday.

In 2017, Target accounted for 13% of Hanesbrands's total sales and 25% of the company's activewear sales, according to Hanesbrands's annual report.

The C9 brand includes activewear for children, plus-size and maternity customers and adults. It also includes shoes and equipment.

Hanesbrands Chief Executive Gerald Evans said in prepared remarks that "Champion has significant momentum in all geographies globally" and that the company would focus on growing the Champion portfolio.

A Target spokeswoman said in an email that the C9 brand makes up a "significant portion" of the company's performance-wear business, but declined to provide an exact figure. She also said Target will have more information on additions to its portfolio of brands next year but didn't elaborate.

Following widespread popularity in the 1990s, the Champion brand has undergone a revival in the past few years, in part because of collaborations with streetwear brands such as Supreme, Undefeated and Vetements.

Wednesday, Hanesbrands also reported its second-quarter profit fell 18% from a year earlier to $140.6 million, or 39 cents a share.

Net sales climbed 4.2% to $1.72 billion, helped by strong international sales. However, sales from Hanesbrands's innerwear segment, the company's largest, fell 3.4% from a year earlier.

Shares of Hanesbrands fell 19% at $18 in afternoon trading.

Write to Allison Prang at allison.prang@wsj.com

Write to Allison Prang at allison.prang@wsj.com

(END) Dow Jones Newswires

August 02, 2018 02:47 ET (06:47 GMT)

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