Hanesbrands (HBI, Financial), a leading manufacturer of undergarments and athletic apparel, subtracted 46 basis points from the Fund’s return, as its stock fell 11.0% from $17.22 to $15.32. The company’s U.S. innerwear segment, its highest-margin business, continued to navigate a challenging retail environment amid further risks of department store closures and bankruptcies. Management seems not yet ready to commit to a turnaround and expects U.S. innerwear segment sales to decline 2% this year. Investors were also concerned about the sustainability of Champion’s growth, as the brand posted global sales growth of more than 50% over the last trailing twelve months.
From Jerome Dodson (Trades, Portfolio)'s third-quarter 2019 Endeavor Fund shareholder letter.
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