Company Also Announces Long-Term Annual Growth Targets of 2 Percent to 4 Percent for Net Sales and 10 Percent to 20 Percent for EPS

Hanesbrands Inc. (NYSE: HBI) today announced that it could double diluted earnings per share over the next three to four years based on expectations for 2010 net sales growth of 5 percent to 8 percent and earnings per share growth of 25 percent to 35 percent coupled with long-term annual growth targets.

Management will discuss its growth expectations and targets along with sales, marketing and supply-chain initiatives at an investor meeting to be held at 9 a.m. EST today at the Jumeirah Essex House in New York City. The meeting, which will end by noon, will also be webcast on the Internet, accessible at www.hanesbrands.com.

The company’s expectation for 2010 sales growth is based on significant shelf-space and distribution gains and a potential rebound in consumer spending. Expectations for EPS growth in 2010 depend on these increased sales, continued cost reduction and effective use of free cash flow.

“Hanesbrands is at an inflection point to begin realizing its significant growth potential,” Hanesbrands Chairman and Chief Executive Officer Richard A. Noll said. “We have spent the last few years building a strong growth platform that utilizes our big brands to drive top-line growth domestically and internationally, a low-cost global supply chain to drive margin improvement, and strong cash flow to support multiple strategies for earnings growth. We see very strong growth in 2010 and are targeting consistently strong growth for the longer term.”

For 2011 and beyond, the company has long-term annual growth targets supported by its growth platform of big brands, low-cost supply chain and strong cash flow.

  • Annual net sales growth target range of 2 percent to 4 percent.
  • Annual EPS growth target range of 10 percent to 20 percent.

“As we leverage our growth platform, we have the potential to double EPS over the next three to four years by increasing sales, improving operating margins and effectively using our cash flow,” Hanesbrands Executive Vice President and Chief Financial Officer E. Lee Wyatt said.

At the investor meeting, the company will illustrate different scenarios in which it could achieve EPS of $3 or $4 using multiple planning assumptions. That compares with EPS excluding actions of $1.66 in 2009. The illustrations and the company’s forward-looking expectations and planning assumptions expressed in this press release and at the investor meeting are based on a business climate of modest economic growth, moderate cost inflation and slowly increasing interest rates.

Sales Growth

Hanesbrands, which had sales of approximately $3.9 billion last year, has five major business segments: Innerwear, Outerwear, Direct to Consumer, Hosiery and International. Using big brands to drive top-line sales increases is the first plank of the company’s growth platform.

The company has locked in shelf-space gains that are expected to generate approximately $200 million of additional sales in 2010, or 5 percent. With a consumer spending rebound, sales could increase up to another 3 percentage points, or $50 million to $100 million.