Core Viewpoint - Hanesbrands is experiencing a recovery in profitability driven by cost reductions, but faces significant revenue challenges across all segments, particularly with Champion brand, leading to a Hold rating on the stock [2][3][27] Financial Performance - In 1Q24, all segments of Hanesbrands reported negative revenue results, with Champion experiencing a 25% year-over-year decline [4] - The innerwear segment, primarily Hanes in the US, saw an 8% decrease, while the international segment declined by 9% [5] - Despite revenue declines, gross margins improved by 770 basis points year-over-year due to cost reductions in cotton and freight [6] - Adjusted operating margin for 1Q24 is estimated at 9% after accounting for restructuring charges and increased marketing expenses [7][8] Champion Brand Sale Considerations - Management did not provide updates on the potential sale of Champion, although there are rumors of interest from Authentic Brands at a price between $1 billion and $1.5 billion [9][10] - Champion's global sales are estimated to have fallen to approximately $1.5 billion from a peak of $2 billion in FY21 [13] - The potential sale could impact revenues significantly, with estimates suggesting a decrease of $1.5 billion in revenues and a reduction in operating income by $120 million if sold [22] Valuation Insights - Hanesbrands currently has a market cap of $1.8 billion and an enterprise value (EV) of $4.85 billion, with a suggested EV/NOPAT multiple of 15x deemed excessive for the company’s current challenges [14][18] - If Champion is sold for $1 billion, the adjusted EV would be $3.85 billion, leading to a P/E ratio of 13.8x, which is still considered high given the company's circumstances [25][26] Future Outlook - The company reaffirmed its FY24 guidance, projecting revenues of approximately $5.4 billion and operating income of about $430 million [8] - There are potential upside risks, including a higher sale price for Champion, lower-than-expected sales and profits post-sale, or a successful turnaround of the Champion brand [28][29][30]

Core Insights - The article emphasizes the importance of value investing as a strategy to identify strong stocks in various market conditions [2][3] - Hanesbrands (HBI) is highlighted as a stock currently attracting investor attention, with a strong Zacks Rank and favorable valuation metrics [4][7] Valuation Metrics - HBI has a Forward P/E ratio of 9.32, significantly lower than the industry average of 12.02, indicating potential undervaluation [4] - The stock's P/B ratio stands at 5.16, compared to the industry's average of 6.43, suggesting a solid valuation relative to its book value [5] - HBI's P/S ratio is 0.32, which is lower than the industry's average of 0.7, reinforcing the notion of undervaluation [6] Investment Outlook - The combination of HBI's strong earnings outlook and favorable valuation metrics positions it as one of the strongest value stocks in the market [7]

Hanesbrands Inc. (HBI) reported mixed first-quarter 2024 results, with the top line declining year over year and missing the Zacks Consensus Estimate. The bottom line improved from the year-ago quarter’s reported figure and surpassed the consensus mark. Management reaffirmed its 2024 guidance.Q1 in DetailThe company posted an adjusted loss from continuing operations of 2 cents per share, narrower than the Zacks Consensus Estimate, which was pegged at a loss of 6 cents. The metric improved from a loss of 6 c ...

Financial Data and Key Metrics Changes - Net sales for Q1 2024 were $1.16 billion, a decrease of $233 million or nearly 17% compared to the prior year, with adjustments accounting for approximately 10% decline year-over-year [24][25] - Gross margin improved to 39.9%, up 720 basis points from the previous year, driven by lower input costs and cost-saving initiatives [27][28] - Operating margin for the quarter was 7.3%, an increase of 270 basis points over last year [28][29] - Earnings per share for the quarter was a loss of $0.02, which was better than expected [29] Business Line Data and Key Metrics Changes - U.S. Innerwear sales decreased by 8% compared to the prior year, with a 50 basis point market share gain [25][16] - U.S. Activewear sales decreased approximately 31%, with two-thirds of the decline attributed to timing-related items from the previous year [26] - Global Champion sales decreased 25% on a constant currency basis, with the transition of the kids' business to a license model accounting for a significant portion of the decline [17] Market Data and Key Metrics Changes - International sales decreased by 9% in constant currency, with growth in Latin America, Japan, and China offset by declines in Europe and Australia [27] - The U.S. e-commerce business was up 12% in the first quarter, indicating a positive trend in that channel [84] Company Strategy and Development Direction - The company is increasing brand marketing investments to support innovation and build relevance with younger consumers [9][10] - A focus on the Champion brand's performance enhancement plan is underway, with strategic collaborations and new product offerings [10][11] - The company aims to reduce debt and enhance shareholder value through a lower fixed-cost structure and improved operating models [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the full-year operating profit guidance of $500 million to $520 million, despite a challenging consumer environment [32][39] - The macro consumer environment is expected to remain challenging, but management anticipates a gradual improvement in sales trends throughout the year [31][32] - Management believes the underlying financial model is strong, with healthy margins and consistent cash generation expected to drive future growth [18][20] Other Important Information - The company has taken out more than $200 million in fixed costs over the past three years, contributing to improved financial flexibility [18] - The process of evaluating strategic alternatives for the Global Champion business is ongoing, with strong interest from various parties [11][67] Q&A Session Summary Question: Can you elaborate on the visibility into the company's profit recovery? - Management expressed high confidence in the operating profit guidance, expecting year-over-year improvement in margins despite a challenging environment [39] Question: What are the expectations for gross margin for the rest of the year? - Management is confident in maintaining a gross margin of 38.5% to 39% for the remainder of the year, with good visibility on input costs [44] Question: Are there differences in trends in Australia? - Management noted some improvement in Australia, particularly in the wholesale business, and expects the business to rebound in the second half of the year [65] Question: What are the brand marketing investments focused on? - The company is concentrating marketing investments on innovation and brand strengthening, with a significant increase in advertising for new product launches [71] Question: What is the outlook for the U.S. Innerwear segment? - Management expects a moderating trend in the U.S. Innerwear segment, guiding for a 3% to 4% year-over-year decline in Q2 [60] Question: Will the company maintain control of Champion? - Management confirmed that the evaluation process for Champion is ongoing, with no announcements regarding a sale at this time [67]

For the quarter ended March 2024, HanesBrands (HBI) reported revenue of $1.16 billion, down 16.8% over the same period last year. EPS came in at -$0.02, compared to -$0.06 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $1.17 billion, representing a surprise of -1.44%. The company delivered an EPS surprise of +66.67%, with the consensus EPS estimate being -$0.06.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Stre ...

HanesBrands (HBI) came out with a quarterly loss of $0.02 per share versus the Zacks Consensus Estimate of a loss of $0.06. This compares to loss of $0.06 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 66.67%. A quarter ago, it was expected that this underwear, T-shirt and sock maker would post earnings of $0.09 per share when it actually produced earnings of $0.03, delivering a surprise of -66.67%.Over the last four quarters ...

Financial Performance - Net sales for Q1 2024 were $1.16 billion, a decrease of approximately 17% year-over-year, impacted by the U.S. Sheer Hosiery divestiture and unfavorable foreign exchange rates[6]. - Adjusted operating profit for Q1 2024 was $84 million, exceeding expectations and representing a 32% increase compared to the prior year[6]. - Net sales for the quarter ended March 30, 2024, were approximately $1.156 billion, representing a 16.8% decrease compared to $1.389 billion in the prior year[35]. - The company reported a net loss of approximately $39.1 million for the quarter, compared to a net loss of $34.4 million in the prior year[35]. - Total operating profit for the quarter was $52,106, down 9.1% from $57,319 in the prior year[43]. - The net loss for the quarter ended March 30, 2024, was $39.1 million, compared to a net loss of $34.4 million in the same quarter of 2023[52]. - Free cash flow for the period was approximately $335 million[18]. - Free cash flow for the quarter ended March 30, 2024, was $5,914 thousand, a decrease of 70.8% compared to $20,293 thousand for the same quarter in 2023[59]. Guidance and Projections - For Q2 2024, the company expects net sales between $1.335 billion and $1.375 billion, with GAAP operating profit guidance of $96 million to $111 million[4]. - Full-year 2024 guidance includes net sales of approximately $5.35 billion to $5.47 billion, reflecting a projected 4% decrease compared to the prior year[15]. - The company anticipates paying down more than $300 million of debt in 2024[4]. - Adjusted operating profit for the same quarter is projected to be between $115 million and $130 million, with a headwind of approximately $3 million from foreign currency exchange rates[18]. - Operating profit outlook for the quarter ending June 29, 2024, is projected to be between $96,000 thousand and $111,000 thousand, with an adjusted outlook of $115,000 thousand to $130,000 thousand[61]. - Diluted earnings per share outlook for the quarter ending June 29, 2024, is estimated to be between $0.02 and $0.06 under GAAP, and between $0.07 and $0.11 when adjusted[61]. - The company expects cash flow from operations for the year ending December 28, 2024, to be approximately $400,000 thousand[61]. - Capital expenditures outlook for the year ending December 28, 2024, is projected at $65,000 thousand[61]. - Free cash flow outlook for the year ending December 28, 2024, is estimated to be $335,000 thousand[61]. - The company is unable to provide financial performance projections beyond 2024 due to uncertainties regarding net sales and operating profit[62]. Cost and Margin Analysis - GAAP gross margin was 39.9%, an increase of 750 basis points year-over-year, driven by lower input costs and cost savings initiatives[6]. - Gross profit margin increased to 39.9% for the quarter, up from 32.4% in the previous year[35]. - Selling, general and administrative expenses for the quarter ended March 30, 2024, were $408.8 million, or 35.4% of net sales, up from $392.4 million and 28.2% in the prior year[51]. - The Innerwear segment operating margin improved to 21.9%, up from 13.1% in the previous year, reflecting a 878 basis point increase[43]. Inventory and Debt Management - The company reduced inventory by 28% year-over-year, resulting in $26 million of cash flow from operations[6]. - The company's net debt as of March 30, 2024, was $3.1 billion, compared to $3.6 billion as of April 1, 2023[56]. - The leverage ratio improved to 5.0 times net debt-to-adjusted EBITDA, down from 5.4 times in Q1 2023[12]. - The leverage ratio, defined as net debt/EBITDA, as adjusted, was 5.0 for the last twelve months ended March 30, 2024, compared to 5.4 for the same period ended April 1, 2023[56]. Segment Performance - Innerwear segment net sales decreased by 8.4% to $506,843, while Activewear segment net sales fell by 30.9% to $217,749[43]. - International sales decreased by 12% on a reported basis, with growth in Japan, China, and Latin America offset by declines in Europe and Australia[10]. - Global Champion sales excluding C9 Champion decreased approximately 26% in the first quarter of 2024 compared to the first quarter of 2023, with a $3 million unfavorable foreign currency impact[53]. Strategic Initiatives - The company is implementing the Full Potential transformation plan and the global Champion performance plan, incurring pretax charges of approximately $19 million related to these initiatives[18]. - The company incurred approximately $17 million in charges related to the Global Champion performance plan for the quarter ended March 30, 2024[50]. - HanesBrands is focusing on sustainability with aggressive goals set for 2030 to improve lives and protect the planet[33]. Other Financial Metrics - The fully diluted shares outstanding were approximately 354 million[18]. - Cash and cash equivalents at the end of the period were $191,216, down from $213,209 at the end of the previous year[47]. - Total assets decreased to $5,589,676 from $6,432,680 year-over-year[45]. - The company incurred restructuring and other action-related charges of $31,721, an increase of 418.2% compared to $6,121 in the prior year[43].

Hanesbrands Inc. (HBI) is set to report first-quarter 2024 earnings on Mar 9. The consensus mark is pegged at a loss of 6 cents per share, unchanged in the past 30 days. It incurred a loss of 6 cents in the prior-year quarter.The Zacks Consensus Estimate for revenues is pegged at $1.2 billion, suggesting a decrease of 15.6% from the year-ago quarter’s reported figure.HBI has a trailing four-quarter negative earnings surprise of 6.4%, on average. In the last reported quarter, the company posted a negative ea ...

The upcoming report from HanesBrands (HBI) is expected to reveal quarterly loss of $0.06 per share, indicating no change from the year-ago quarter compared to the year-ago period. Analysts forecast revenues of $1.17 billion, representing a decrease of 15.6% year over year.The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. This reflects how the analysts covering the stock have collectively reevaluated their initial estimates during this timeframe.Prior to a company's ear ...

Hanesbrands Inc. (HBI) is battling with greater-than-anticipated challenges in the sales environment, which is hurting its performance. The basic apparel company is battling weakness in the Activewear segment. Weakness in the International unit is also concerning.Hanesbrands’ reignite Innerwear strategy continues to gain traction. Also, the company’s ongoing cost curtailment efforts are offering respite.Let’s delve deeper.Volatile Sales EnvironmentHanesbrands is operating amid a challenging sales environmen ...