Hanesbrands Earnings Preview

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After beating estimates last quarter by $0.09, Hanesbrands (NYS: HBI) has set the standard for itself. The company will unveil its latest earnings on Wednesday, Feb. 15. Hanesbrands is a consumer goods company with a portfolio of apparel brands. It designs, manufactures, sources, and sells a range of apparel essentials such as T-shirts, innerwear, casualwear, activewear, socks, and hosiery.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Hanesbrands, with seven out of nine rating it a buy and the remainder rating it a hold. Analysts like Hanesbrands better than competitor Warnaco Group overall. Analysts still rate the stock a moderate buy, but they are a bit more wary about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $1.24 billion in revenue this quarter. That would represent a rise of 7.8% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.51 per share. Estimates range from $0.48 to $0.53.

What our community says:
CAPS All-Stars are in strong support of the stock, with 83.8% awarding it an outperform rating. Most of the community agrees with the All-Stars, with 82% giving it a rating of outperform. Fools are keen on Hanesbrands and haven't been shy with their opinions lately, logging 103 posts in the past 30 days. Hanesbrands' bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:
Hanesbrands' income has fallen year over year by an average of more than sevenfold over the past five quarters. Revenue has now gone up for three straight quarters.

Now let's get some insight into how efficient management is at running the business. Traditionally, margins serve as an illustration of how efficiently a company captures portions of sales dollars. The company's operating margins have been increasing year over year for the last three quarters. Operating margins reflect the total sales revenue that the company retains after costs. Here is how Hanesbrands has been doing for the last four quarters:

Quarter

Q3

Q2

Q1

Q4

Gross Margin

34.6%

34.9%

34.2%

30.3%

Operating Margin

12.4%

12.1%

9.8%

7.1%

Net Margin

7.4%

7.1%

4.6%

2.4%

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Earnings estimates provided by Zacks.

At the time this article was published

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