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Hanesbrands (HBI) on Track to Achieve Target: Time to Buy?

Zacks Equity Research
Updated

Hanesbrands Inc. HBI is confident that its business momentum will continue backed by higher margins and success of its sales boosting strategy – Innovate-to-Elevate.

Hanesbrands has recently affirmed its fiscal 2015 financial guidance at the Goldman Sachs Global Retailing Conference in New York City. The company issued the outlook during the second-quarter earnings call in Jul 2015.

The outlook reflects solid double-digit growth expectations for sales, profit and earnings per share over the 2014 results. Hanesbrands continues to expect earnings in the range of $1.61 to $1.66, up 13% to 17% from the 2014 level. Net sales are likely to be a tad lower than $5.9 million. The outlook represents 11% growth from the previous year. Hanesbrands further commented that it is on track to achieve its target for the current fiscal year.

Further, Hanesbrands is optimistic about the Knights Apparel acquisition and expects higher profit from DBApparel.

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The leading sportswear retailer pursues strategic acquisitions to boost its portfolio. Over the last couple of years, Hanesbrands completed three acquisitions for a total of approximately $1.3 billion. The company acquired the DB Apparel business in Sep 2014 and again acquired the collegiate apparel maker, Knights Apparel, in Apr 2015.

The Zacks Rank #3 (Hold) company has also reported decent earnings results recently  where second-quarter earnings of 50 cents were in line with the Zacks Consensus Estimate, but grew 16% year over year. The improvement came on the back of the acquisitions and the Innovate-to-Elevate strategy. Revenues of $1.52 billion marginally missed the consensus mark, but rose 13% year over year driven by strong sales growth in the Activewear and International segments and the acquisitions.

Some better-ranked stocks in the same sector are Columbia Sports Inc. COLM, Guess Inc. GES, and Perry Ellis International Inc. PERY all carrying a Zacks Rank #1 (Strong Buy).

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COLUMBIA SPORTS (COLM): Free Stock Analysis Report
 
HANESBRANDS INC (HBI): Free Stock Analysis Report
 
GUESS INC (GES): Free Stock Analysis Report
 
PERRY ELLIS INT (PERY): Free Stock Analysis Report
 
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