UPDATE 3-Outerwear sales boost Hanesbrands results; shares rise

Q1 EPS $0.49 vs est $0.33

* Q1 sales $1.04 bln vs est $1.01 bln

* Sees FY EPS $2.70-$2.90 ve prev $2.60-$2.80

* Shares rise 11 pct to their highest in 3 years (Adds analyst comment, details on cotton costs, updates share movement)

By Mihir Dalal

BANGALORE, April 20 (Reuters) - Strong sales of outerwear products such as sport shirts and jackets helped Hanesbrands Inc , better known for its underwear brands, post strong quarterly results and raise its outlook for the year.







Shares of the company, whose brands include Hanes, Champion and Wonderbra, rose 11 percent to their highest in nearly three years.

Hanesbrands -- founded by brothers John Wesley Hanes and Pleasant Hanes in 1901 as a maker of men's underwear -- has been expanding its casual wear business and acquired GearCo, which sells logoed T-shirts and sportswear to college students, last August.

"By delivering the right quality product to retailers and backing it up by significant marketing dollars, the company increasingly opened more avenues for sales," Sterne Agee & Leach analyst Kenneth Stumphauzer said.

Sales from the company's outerwear products rose 23 percent to $330.7 million and operating profit was up nearly five-fold to $25.5 million. Sales at the innerwear segment -- its biggest -- were flat and profit fell 23 percent.

Stumphauzer expects the company's outerwear sales to continue growing strongly in 2011 before moderating next year.

Hanesbrands, which was spun off from Sara Lee Corp in 2006, has been raising prices to offset rising cotton costs.

The company said it had locked in its cotton costs for the year and expected to raise prices further.

Shares of the Winston-Salem, North Carolina-based company were up 10 percent at $31.97 on Wednesday morning. They have risen 15 percent this year through Tuesday.

The company posted a first-quarter profit of $48.1 million, or 49 cents a share, compared with $36.5 million or 37 cents a share, a year ago.

Net sales increased 12 percent to $1.04 billion.

Analysts were expecting earnings of 33 cents a share, before special items, on revenue of $1.01 billion, according to Thomson Reuters I/B/E/S. (Reporting by Mihir Dalal in Bangalore; Editing by Joyjeet Das and Saumyadeb Chakrabarty)