Standard & Poor’s was only partially impressed by the presentation of Hanesbrands’ new business plan by its new CEO, Steve Bratspies. The rating agency maintained a negative outlook on the parent company of Champion, citing an “execution risk” for the three-year growth plan due to increased capital investment and marketing costs and the evolving nature of consumer purchasing patterns after the Covid pandemic is over. S&P thus affirmed its BB issuer credit rating on Hanesbrands, its BBB- rating on the company’s senior secured debt and a BB rating on its unsecured debt. The company’s debt/equity leverage is expected to go below 4 times as Ebitda will start to normalize in 2021, but the loss of its facemask business and the planned sale of its European innerwear operations will need to be replaced by other sources of revenue that will require incremental marketing expenditures. S&P also points out that the company’s first-quarter sales were partially aided by a U.S. government stimulus to consumption that may reduce disposable income due to rising inflation.

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