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Hanesbrands (HBI)
NYSE:HBI
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Hanesbrands
(NYSE:HBI)
Rating:52Neutral
Price Target:
$5.00
▲( 2.25% Upside)
Positive Factors
Earnings
HBI delivered solid top and bottom line performance in 4Q, with all regions returning to growth, including a positive inflection in the US and accelerated growth internationally.
Financial Performance
The company pushes toward continued margin expansion as they expect to expand another 125bps this year, with focused GM improvements and SG&A reductions.
Negative Factors
Leadership
The respected CEO Bratspies announced he will depart by 2025 end, creating concerns around the sustainability of HBI's recent successes.
Market Perception
Despite a strong 4Q, HBI is viewed much more favorably post its strong 2024 move, but is now added to the 'not good enough' basket this EPS season.
Hanesbrands (HBI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.73B
Dividend YieldN/A
Average Volume (3M)6.26M
Price to Earnings (P/E)―
Beta (1Y)1.20
Revenue Growth-33.72%
EPS Growth-892.32%
CountryUS
Employees38,000
SectorConsumer Cyclical
Sector Strength74
IndustryApparel - Manufacturers
Share Statistics
EPS (TTM)0.07
Shares Outstanding353,639,600
10 Day Avg. Volume5,756,144
30 Day Avg. Volume6,260,118
Financial Highlights & Ratios
PEG Ratio0.14
Price to Book (P/B)52.71
Price to Sales (P/S)0.00
P/FCF Ratio7.92
Enterprise Value/Market Cap2.39
Enterprise Value/Revenue0.22
Enterprise Value/Gross Profit2.58
Enterprise Value/Ebitda3.16
Forecast
1Y Price Target
$5.90Price Target Upside20.65% Upside
Rating ConsensusHold
Number of Analyst Covering5
Hanesbrands Business Overview & Revenue Model
Company DescriptionHanesbrands Inc. (HBI) is a leading global marketer of everyday basic apparel under some of the world's strongest apparel brands, including Hanes, Champion, Playtex, Bali, Maidenform, and Bonds, among others. The company operates in the apparel and activewear sectors, offering a wide range of products that include underwear, t-shirts, bras, socks, hosiery, and activewear. Hanesbrands has a strong presence in retail, wholesale, and online channels, serving consumers worldwide with high-quality, comfortable clothing options.
How the Company Makes MoneyHanesbrands Inc. generates revenue primarily through the sale of its apparel products across multiple channels, including wholesale distribution to major retailers, direct-to-consumer sales via company-owned retail stores and e-commerce platforms, and through partnerships and licensing agreements. The company's key revenue streams are driven by its diverse portfolio of brands, which cater to various consumer segments and market demands. Additionally, Hanesbrands benefits from economies of scale in manufacturing and distribution, allowing it to maintain competitive pricing while optimizing profitability. Strategic partnerships and collaborations also play a role in expanding market reach and enhancing brand visibility.
Hanesbrands Financial Statement Overview
Summary
Hanesbrands is facing significant financial challenges with declining revenues, high leverage, and minimal equity. The income and balance sheet scores reflect these issues, although cash flow management shows some resilience.Income Statement
Hanesbrands has experienced a significant decline in revenue and profitability over the years. The recent gross profit margin is 38.8%, and the net profit margin is negative, indicating losses. The revenue growth rate has been negative, with a notable drop from 2021 to 2024. The EBIT and EBITDA margins are also decreasing, showing declining operational efficiency.45
Neutral
Balance Sheet
The company has a very high debt-to-equity ratio, indicating high leverage and financial risk. The equity ratio is alarmingly low at 0.9%, suggesting minimal equity buffer. ROE is negative due to net losses, further indicating poor financial health.30
Negative
Cash Flow
Operating cash flow has shown some resilience, with a positive operating cash flow to net income ratio, indicating better cash management despite the net losses. Free cash flow is positive, but its growth rate is negative, reflecting reduced cash flow generation capacity.55
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 3.51B | 5.64B | 6.23B | 6.80B | 6.66B | Gross Profit |
| 1.36B | 1.90B | 2.22B | 2.65B | 1.85B | EBIT |
| 185.95M | 288.78M | 519.54M | 797.73M | -16.63M | EBITDA |
| 230.56M | 363.37M | 700.59M | 860.71M | 156.26M | Net Income Common Stockholders |
| -320.43M | -17.73M | -131.17M | 520.97M | -75.58M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 214.85M | 205.50M | 238.41M | 536.28M | 909.44M | Total Assets |
| 3.84B | 5.64B | 6.50B | 7.07B | 7.70B | Total Debt |
| 2.55B | 3.77B | 4.30B | 3.74B | 4.51B | Net Debt |
| 2.34B | 3.56B | 4.06B | 3.21B | 3.60B | Total Liabilities |
| 3.81B | 5.22B | 6.11B | 6.37B | 6.88B | Stockholders Equity |
| 34.01M | 419.35M | 398.26M | 702.49M | 813.96M |
| Cash Flow | Free Cash Flow | |||
| 226.35M | 517.69M | -573.92M | 554.14M | 394.73M | Operating Cash Flow |
| 264.24M | 561.75M | -358.80M | 623.41M | 448.47M | Investing Cash Flow |
| 813.03M | -23.48M | -216.43M | -52.45M | -41.08M | Financing Cash Flow |
| -1.05B | -580.08M | 295.83M | -888.02M | 142.17M |
Hanesbrands Technical Analysis
Negative
4.89
Price Trends
5.12
Negative
6.22
Negative
6.77
Negative
Market Momentum
0.03
Negative
43.74
Neutral
9.50
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HBI, the sentiment is Negative. The current price of 4.89 is below the 20-day moving average (MA) of 5.02, below the 50-day MA of 5.12, and below the 200-day MA of 6.77, indicating a bearish trend. The MACD of 0.03 indicates Negative momentum. The RSI at 43.74 is Neutral, neither overbought nor oversold. The STOCH value of 9.50 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HBI.
Hanesbrands Risk Analysis
Hanesbrands disclosed 38 risk factors in its most recent earnings report. Hanesbrands reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 2 New Risks
1.
The use of artificial intelligence in our operations poses inherent risks that could adversely affect our business. Q4, 2024
2.
We will be a less diversified business following the sale of our global Champion business and the exit from our U.S. outlet store business, which may adversely affect our results of operations and financial condition. Q4, 2024
Hanesbrands Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $7.01B | 19.96 | 18.03% | 2.93% | 4.63% | 187.50% | |
63 Neutral | $3.49B | 16.30 | 12.34% | 1.88% | -1.69% | -4.01% | |
62 Neutral | $2.76B | ― | -9.95% | ― | -7.47% | -131.70% | |
62 Neutral | $6.84B | 11.22 | 2.83% | 3.95% | 2.65% | -21.93% | |
53 Neutral | $4.68B | ― | -2.39% | 3.00% | -8.42% | 57.91% | |
52 Neutral | $1.73B | ― | -23.24% | ― | -33.72% | -892.32% | |
47 Neutral | $2.76B | ― | -9.95% | ― | -7.47% | -131.70% |
* Consumer Cyclical Sector Average
Performance Comparison
HBI
Hanesbrands
4.89
0.11
2.30%
COLM
Columbia Sportswear
63.80
-17.89
-21.90%
UA
Under Armour
6.24
-0.41
-6.17%
VFC
VF
12.00
-0.10
-0.83%
LEVI
Levi Strauss & Co
17.74
-4.20
-19.14%
UAA
Under Armour
6.69
-0.15
-2.19%
Hanesbrands Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: 0.00%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Positive
The earnings call reflected a positive sentiment with strong financial performance, international sales growth, successful debt reduction, and margin expansion achievements. However, challenges in the domestic market, particularly in the intimate apparel category and potential tariff impacts, were noted as areas of concern. The company remains confident in its strategy to mitigate these challenges.Q1-2025 Updates
Positive Updates
Strong Financial Performance
Sales increased 2% to $760 million, operating profit increased 61%, and EPS increased 240% over prior years.
International Sales Growth
International sales increased 4% on an organic constant currency basis, driven by growth in Australia and Asia.
Successful Debt Reduction
Over $1 billion of debt was paid down last year, and the company refinanced its 2026 maturities in March.
Margin Expansion Achievements
Gross margin increased by 165 basis points to 41.6%, and operating margin expanded by 390 basis points to 10.7%.
New Business Growth
New businesses, including scrubs and loungewear, grew by 60% over the previous year.
Negative Updates
U.S. Sales Decline
U.S. sales decreased 1%, with ongoing consumer headwinds impacting the innerwear market, particularly in the intimate apparel category.
Intimate Apparel Weakness
The intimates business was down mid-teen percentage points compared to last year, affected by macroeconomic conditions and challenges in the mid-tier department store channel.
Potential Tariff Challenges
While the company is confident in its ability to mitigate tariff impacts, the current tariff environment presents challenges that need to be navigated.
Company Guidance
During the Hanesbrands' First Quarter 2025 Earnings Call, the company provided several key metrics demonstrating its strong performance and strategic initiatives. They reported a 2% increase in sales, reaching $760 million, with a significant operating profit increase of 61% and a remarkable 240% rise in earnings per share (EPS). The gross margin improved by 165 basis points to 41.6%, while SG&A expenses decreased by 5%, leading to a 390 basis points expansion in operating margin to 10.7%. The company also highlighted its debt reduction efforts, having paid down over $1 billion in debt last year, which contributed to lower interest expenses. Looking ahead, Hanesbrands expects second-quarter sales of approximately $970 million, with an operating profit of about $136 million and EPS of $0.18. Despite headwinds from the current tariff environment, they remain confident in fully mitigating these impacts and continue to pursue incremental revenue opportunities, leveraging their Western Hemisphere supply chain and strong retailer relationships.Hanesbrands Corporate Events
Private Placements and FinancingBusiness Operations and StrategyFinancial Disclosures
Hanesbrands Reports Strong Q1 2025 Financial Results
Positive
May 8, 2025
HanesBrands Inc. reported better-than-expected financial results for the first quarter of 2025, with net sales of $760 million, marking a 2.1% increase over the previous year. The company saw significant improvements in gross and operating margins due to cost-saving initiatives and lower input costs. Despite challenges such as U.S. tariffs, HanesBrands reiterated its full-year guidance, expecting to mitigate cost headwinds through strategic actions. The company also completed refinancing of its 2026 maturities, reducing leverage and positioning itself advantageously for future growth.
Shareholder MeetingsBusiness Operations and Strategy
Hanesbrands Increases Shares Under Incentive Plan
Positive
May 5, 2025
On April 29, 2025, Hanesbrands Inc. held its Annual Meeting of Stockholders, where the stockholders approved an amendment to increase the number of shares reserved under the 2020 Omnibus Incentive Plan by 16,210,000 shares. Additionally, the stockholders elected the proposed directors, ratified the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for 2025, and approved executive officer compensation, reflecting strong support for the company’s governance and strategic initiatives.
Executive/Board ChangesBusiness Operations and Strategy
Hanesbrands Chief Legal Officer Announces Departure
Neutral
Apr 18, 2025
Kristin L. Oliver, who holds the positions of Chief Legal Officer, Chief Human Resources Officer, and Executive Vice President of Communications at Hanesbrands Inc., announced her intention to leave the company to pursue another business opportunity. Her departure is set to take effect on May 9, 2025, which may impact the company’s executive leadership and strategic direction.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.