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What happened

Shares of Hanesbrands Inc. (HBI 2.01%) were busting out of their seams today, climbing on a solid third-quarter earnings report and a strong outlook for the fourth quarter. As of 11:49 a.m. EDT, the stock was up 9.7%.

So what

The parent of brands including Hanes, Champion, Playtex, and Maidenform said adjusted earnings from continuing operations increased 12% to $0.56, matching estimates, while revenue was up 11% to $1.76 billion, just shy of expectations at $1.77 billion.

The solid performance comes at a time when much of the apparel-retail industry has been challenged, with department-store stocks tumbling amid the rise of online competition. Hanesbrands' results show that at least in basics, big brand names remain strong.

CEO Gerald Evans said, "Our sales initiatives have reaccelerated organic growth in several core categories, including 2 percent growth in the quarter for the Innerwear segment." He also noted the company generated record cash flow in the quarter.

Now what

The apparel-maker narrowed its guidance range for full revenue from $6.15 to $6.25 billion down to $6.15 to $6.18 billion, and on full-year earnings per share from $1.89 to $1.95 down to $1.89 to $1.92. However, the market seemed to be encouraged by its fourth-quarter revenue forecast of $1.70 to $1.73 billion, better than the consensus of $1.68 billion.

Hanesbrands has been boosted by a number of acquisitions recently, including Pacific Brands, Champion Europe, and GTM Sportswear, and management said acquisitions would add $460 million in revenue for the full year and $250 million in the fourth quarter. That guidance indicates flat full-year organic revenue growth. Still, its acquisition strategy has delivered solid results, and I'd expect earnings to keep moving higher. With the stock's modest valuation, that should be enough to make it a winner.