http://www.huffingtonpost.com/2012/10/09/underwear-sales-growth-economy_n_1952214.html Underwear Sales Increase, Suggesting A Rebounding Economy Posted: 10/09/2012 4:09 pm EDT Updated: 10/10/2012 2:20 pm EDT WASHINGTON -- There is an old saying among economists that the best way to assess the state of the economy is to look at people's underwear. OK, there's no such saying. But when he served as chairman of the Federal Reserve, Alan Greenspan did use the sales of male underpants as a way to take the temperature of the country's economic well being. And if the Maestro were to take a peek right now, he'd find evidence that things are gradually improving. The NPD Group, Inc., a leading market research company, has shown an uptick in sales of men's underwear over the past year. Between Aug. 2010 and Aug. 2011, sales for all men's "underwear bottoms" were roughly $2.074 billion. In the period between Aug. 2011 and Aug. 2012, that number was $2.194 billion. That represents a 6 percent jump in sales from year to year. Looking closer at the data, specific undergarment companies are flourishing in the current economy. HanesBrands Inc., for example, has seen underwear sales increase steadily over the past three years, climbing from $1.83 billion in 2009 to $2.01 billion in 2010 to $2.06 billion in 2011, according to SEC files. Sales for the first half of 2012 -- the most recent available data -- are also stronger, coming in at $1.17 billion, compared to $1.15 billion in the first half of 2011. The company's stock price, which hit a 6-month low of $24.78 per share on May 18, was over $33 per share on Monday. Limited Brands Inc., the parent company of Victoria's Secret, does not separate that company's revenues from those of its other brand names, like Bath and Body Works. The company's overall store sales for the first half of 2012, however, were up 8 percent from the first half of 2011, according to its latest earnings statement, and it saw its stock price rise from $45.11 on May 18 to more than $50 on Monday. Greenspan's theory on underwear sales as an economic indicator was fairly straightforward. "If you look at sales of male underpants it's just pretty much a flat line, it hardly ever changes," NPR's Robert Krulwich explained of the theory, after Greenspan's book "The Age Of Turbulence" was published. "But on those few occasions where it dips that means that men are so pinched that they are deciding not to replace underpants. And [Greenspan] said 'that is almost always a prescient, forward impression that here comes trouble.'" In 2009, that certainly was the case. In April of that year, as The Huffington Post reported, the leading global research company Mintel produced a study showing a 2.3 percent drop in sales of all men's underwear products in 2009. The recession had come quickly and unexpectedly. In November 2008, Mintel had forecast underwear sales to grow by 2.6 percent in 2009. Men, in short, were cutting back so dramatically on their spending habits that they were no longer buying underwear regularly. Three years later, with the economy showing some signs of growth -- albeit slow growth -- they're splurging a bit more. But the theory has its limits. The Huffington Post reached out to several men who have endured lean times, but found none who obeyed Alan Greenspan's law of underwear sales. Doug Walter of Ivyland, Pa. lost his job at a car dealership in 2009 and spent two years unemployed before starting a business. He said he doesn't expect to make a ton of money from his new Warrington, Pa. consignment store, but even in boom times he wouldn't go out of his way to buy underwear. "Personally I figure I won't be buying underwear for myself," Walter, 45, said in an email. "That's what the holidays are for." Walter's son, who helps at the store, suggested improved underwear sales might "be representative of men heading back into the dating scene in the aftermath of failed marriages caused by the recession." Jim Chukalas of Fredon Township, N.J., said he hasn't started shopping for underwear less frequently since losing his job. "I'm the kind of guy who buys underwear only when I have to," Chukalas said. "They could have more holes than swiss cheese, and be completely falling apart, before I trash them." Chukalas added that his underwear habit drives his wife insane. ====================================================================================================== http://www.usatoday.com/story/money/business/2014/11/22/cheat-sheet-underwear-economy/19280999/ Can underwear give us economic clues? Eric McWhinnie, Cheat Sheet 6 a.m. EST November 22, 2014 Underwear can say a lot about a person, but can it tell us anything about the economy? Alan Greenspan, former chairman of the Federal Reserve, ran his own economic consulting firm in the 1970s. One of the most peculiar economic indicators he utilized was the sale of men underwear. The theory is that sales remain stable in regular economic times, and decline when the economy worsens. While the usefulness of this indicator is debatable, two popular companies in the underwear industry might be providing credibility to the economic recovery. The recent round of earnings reveals that business is booming for America's leading manufacturer of branded underwear. Last month, HanesBrands (HBI) reported its third consecutive quarter of double-digit sales and profit growth. In the quarter ended September 27, 2014, net sales jumped 17% to $1.4 billion, while adjusted operating profit surged 23% to $217 million. Net sales increased for each business segment. In fact, the company is so upbeat about its outlook that it raised earnings guidance for the full year. "Our business continues to perform very well, particularly in an uncertain consumer environment," explained Richard A. Noll, Chairman and Chief Executive Officer of HanesBrands, in a press release. "We have delivered more earnings in the first three quarters of 2014 than we did all of last year." The lingerie industry is also attracting attention. L Brands (LB), which owns and operates Victoria's Secret, PINK, Bath & Body Works, La Senza, and Henri Bendel, reported net sales of $700 million for October, up 3% from the same period a year earlier. Net sales for the 13 weeks ended November 1, 2014, grew 7% year-over-year to $2.32 billion. Victoria's Secret was a strong segment for the most recent quarter, despite have a difficult year-over-year comparison. "The Victoria's Secret segment grew both sales and operating income on top of a record performance last year," explained Sharen Turney, Victoria's Secret CEO. "Total sales increased 5% and comp sales increased 3%, with operating income increasing $17.6 million or 6%." Investors already seem to be taking notice of strong company fundamentals and a slowly improving economy. Shares of HanesBrands have gained 55% this year, while L Brands shares have increased 26%. In comparison, the S&P 500 is up about 10% year-to-date. You never want to rely on a single indicator to gauge something as complicated as the American economy, but the strength in the underwear industry correlates with solid economic growth. In the third quarter, the economy expanded at a 3.5% annual rate, stronger than expected and the strongest back-to-back quarters since 2003. Follow Eric on Twitter @Mr_Eric_WSCS. The Cheat Sheet is a USA TODAY content partner offering financial news and commentary. Its content is produced independently of USA TODAY. ===========================================================