What happened Shares of Hanesbrands (NYSE: HBI) were heading lower today after the seller of apparel basics issued disappointing guidance in its third-quarter earnings report. Though the results were better than expected, the guidance shows performance decelerating heading into the holiday season, as the company is experiencing some of the same impacts as other apparel brands. Hanesbrands shares were down 20% as of 2:28 p.m. EST. Image source: Hanesbrands. So what The owner of brands including Champion, Playtex, and its namesake said that revenue in the quarter ticked down 3.1% to $1.81 billion, ahead of estimates at $1.67 billion. Innerwear, which includes underwear and t-shirts, rose 8.4% as consumers spent more time at home, but activewear plunged 41%, or 27% excluding the impact of Target's decision to stop selling the Champion C9 brands. The decline shows that Champion did not benefit from broader trends supporting exercise gear. On the bottom line, earnings per share adjusted for charges related to COVID-19, as well as supply-chain restructuring and program exits, fell from $0.47 to $0.42, which topped estimates at $0.37. Separately, the company announced an in-depth business review as it sought to refine its long-term strategy. CEO Steve Bratspies acknowledged that some of the company's brands are aging a bit, but touted the quarterly performance, saying, "I'm pleased with our third-quarter results as we saw significant improvements across our business and exceeded our expectations for sales, profits and cash flow from operations." Still, the combination of the business review, weak performance in activewear, and disappointing guidance seemed to sink the stock. Now what Citing uncertainty around the COVID-19 pandemic and a new round of lockdowns in Europe, the company forecast fourth-quarter revenue of $1.6 to $1.66 billion, equal to a 7% decline at the midpoint, and earnings per share of $0.25 to $0.30, compared to $0.51 a year ago. Both numbers were below the analyst consensus at $1.71 billion and $0.45, respectively. Hanesbrands shares had bounced back strongly from the March sell-off, but the guidance shows the company still faces stiff headwinds. 10 stocks we like better than HanesbrandsWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Hanesbrands wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of October 20, 2020 Jeremy Bowman owns shares of Target. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.Source