Factors Likely to Affect Hanesbrands' (HBI) Q2 Earnings

Hanesbrands Inc. HBI is slated to report second-quarter 2022 earnings on Aug 11. The designer, manufacturer and seller of apparel is likely to have witnessed revenue and earnings declines in the to-be-reported quarter.

The Zacks Consensus Estimate for revenues is pegged at $1,698 million, suggesting a decrease of 3.1% from the prior-year quarter’s reported figure. The Zacks Consensus Estimate for quarterly earnings has been unchanged in the past 30 days at 33 cents per share, suggesting a 29.8% decline from the prior-year quarter’s reported figure.

Hanesbrands delivered an earnings surprise of 21.4% in the last reported quarter. The company has a trailing four-quarter earnings surprise of 14.3%, on average.

Factors To Note

Hanesbrands has been reeling under rising inflation and elevated freight cost to support new retail space gains and product innovation. The company has been grappling with COVID-induced supply-chain logistic headwinds. These, along with the war in Eastern Europe, are likely to have dented the second-quarter performance.

The company has been exposed to unfavorable currency fluctuations, owing to its international presence. The weakening of foreign currencies against the U.S. dollar is likely to have been concerning.

On its last reported quarter’s earnings call, management expected second-quarter 2022 net sales from continuing operations to include an adverse impact of $40 million from currency movements.

However, the company’s Full Potential plan, which includes growing the global Champion brand, re-igniting innerwear growth, driving consumer-centricity and focusing on the portfolio, bodes well. Strength in Hanesbrands’ Champion brand has been a key growth driver. The Zacks Consensus Estimate for sales in the Innerwear segment is pegged at $746 million, which suggests an improvement from the $579 million reported in the prior quarter.

Also, management has been streamlining the portfolio, shedding non-core lower-margin businesses and lowering skews for business simplification. Investments in data analytics and supply-chain improvements to fuel growth, enhanced consumer brand experience, reduced costs and improved efficiencies are expected to have provided some cushion to the stock.

Hanesbrands Inc. Price and EPS Surprise

 

Hanesbrands Inc. price-eps-surprise | Hanesbrands Inc. Quote

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Hanesbrands this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Hanesbrands has a Zacks Rank #4 (Sell) and an Earnings ESP of 0.00%.

Stocks With Favorable Combination

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

Hyatt Hotels H currently has an Earnings ESP of +216.67% and a Zacks Rank of 3. The company is likely to register an increase in the bottom line when it reports second-quarter 2022 results. Although the Zacks Consensus Estimate for the bottom line moved down from earnings of 2 cents to a loss of a penny per share, it suggests a surge of 99.1% from the year-ago quarter’s reported number.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Hyatt Hotels’ top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $1.36 billion, suggesting a rise of 105.6% from the figure reported in the prior-year quarter.

Malibu Boats MBUU currently has an Earnings ESP of +3.78% and a Zacks Rank of 3. The company is likely to register an increase in the bottom line when it reports fourth-quarter fiscal 2022 results. The Zacks Consensus Estimate for quarterly earnings is pegged at $2.31, which indicated a year-over-year improvement of 25.5%. The consensus mark has been unchanged in the past 30 days.

The Zacks Consensus Estimate for Malibu Boats’ quarterly revenues is pegged at $330.8 million, suggesting growth of 19.6% from the year-ago quarter’s reported number. MBU has delivered an earnings beat of 16.1%, on average, in the trailing four quarters.

BJ’s Wholesale BJ currently has an Earnings ESP of +3.61% and a Zacks Rank of 3. The company is likely to register a decrease in the bottom line when it reports second-quarter fiscal 2022 results. The Zacks Consensus Estimate for quarterly earnings has been unchanged at 80 cents per share in the past 30 days, indicating a decline of 2.4% from 82 cents a share registered in the year-ago quarter.

However, BJ’s Wholesale’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $4.7 billion, which suggests growth of 12% from the figure reported in the prior-year quarter. BJ has delivered an earnings beat of 16.1% in the trailing four quarters, on average.

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