Hanesbrands Inc. (HBI) on the Path to Profitability

Hanesbrands Inc. (HBI) on the Path to Profitability


Many stocks have been testing new highs in 2020, and one of the most notable is Hanesbrands Inc. (HBI). Currently, HBI is trading at $13.21 and the avg recommendation for the stock is Moderate Buy. while the current analyst price target stands at $10.67.

To add more color to this target, the company’s high over the last year is $17.69 and the low is $6.96. Over the last 52 weeks, HBI is down -25.33% while the S&P 500 is up 1.21%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, HBI reported a profit of $473.73 million. Hanesbrands Inc. also saw revenues increase to $1.32 billion. In addition, HBI has free cash flow of -$108.97 million as of 03-2020 The company’s EBITDA came in at $67.62 million which compares well with its peers.

HBI booked profit margins of 7.70%, its Return on Equity (ROE) is 45.90%, and its Return on Assets is 6.60%. All told, it is clear that, HBI needs to be on your watchlist.

About Hanesbrands Inc.

If readers are unfamiliar, Hanesbrands Inc., a consumer goods company, designs, manufactures, sources, and sells a range of basic apparel for men, women, and children in the United States. The company operates through three segments: Innerwear, Activewear, and International. It sells men’s underwear, women’s panties, children’s underwear, activewear, socks, and hosiery, as well as intimate apparel, such as bras and shapewears; home goods; and T-shirts, fleece, sport shirts, performance T-shirts and shorts, sports bras, and thermals, as well as licensed logo apparel in collegiate bookstores, mass retailers, and other channels. The company licenses its Champion name for footwear and sports accessories. Hanesbrands Inc. provides its products primarily under the Hanes, Champion, Maidenform, Bali, JMS/Just My Size, Polo Ralph Lauren, Playtex, DKNY, Donna Karan, Alternative, Gear for Sports, Hanes Beefy-T, Bonds, DIM, Sheridan, Bras N Things, Nur Die/Nur Der, Lovable, Wonderbra, Berlei, Abanderado, Shock Absorber, Zorba, Explorer, Sol y Oro, and Bellinda brand names. The company markets its products through retailers, wholesalers, and third party embellishers, as well as directly to consumers through Internet. As of December 29, 2018, it operated 243 retail and direct outlet stores in the United States and the Commonwealth of Puerto Rico, as well as 690 retail and outlet stores internationally. The company also sells its products in Europe, Australia, Asia, Latin America, Canada, the Middle East, Africa, Mexico, and Brazil. Hanesbrands Inc. was founded in 1901 and is headquartered in Winston-Salem, North Carolina.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. HBI has a short ratio of 5.84 and outstanding shares of 359.02M.

Company Outlook

HBI has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 12.56 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at 1.40. Hanesbrands Inc. HBI also noted assets of $7.94 billion at the end of the last quarter. Investors should also keep an eye on sector updates as HBI has historically followed its peers on positive news.

All told, Hanesbrands Inc. HBI has strung together solid data and demonstrated underlying fundamentals. At its current valuation, HBI represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

Hanesbrands Inc. HBI is now commanding a market cap of 4.74B and a float of 333.92M. HBI is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of HBI stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in HBI, either long or short, and we have not been compensated for this article.