Who knew so many people were buying their underwear at Kmart and Sears?
Underwear maker Hanesbrands cut its fourth quarter revenue guidance by $15 million and operating profit outlook by about $5 million, specifically because of Sears Holdings' bankruptcy. The company owns Sears and Kmart.
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Hanesbrands also set aside $14 million for what it expects to lose as a creditor of Sears. The company said Sears and Kmart accounted for only about 1% of its sales - it still expects fourth quarter sales of $1.7 billion.
But the lower profit guidance worried investors, who sent shares of Hanesbrands (HBI) down 8% in midday trading on Thursday. Shares are down about 23% for the year.
Sears filed for bankruptcy on Oct. 15. It says it intends to stay in business but it plans to close about 200 of the 700 stores that remain open. And its ability to remain in business is in doubt, according to some of its bankrutpcy court filings.
Hanesbrands sells underwear and lingerie under the Hanes, Champion and Maidenform brands.