Hanesbrands (NYSE:HBI) - Share price, News & Analysis

Q: What is the Fair Price of HBI when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

HBI ($11.2) is trading below our estimate of [[fair value]] ($29.43)

HBI fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	2/6
Past Performance	4/6
Financial Health	2/6
Dividends	4/6

HBI Stock Overview

Hanesbrands Inc., a consumer goods company, designs, manufactures, sources, and sells a range of basic apparel for men, women, and children.

Rewards

Trading at 61.9% below our estimate of its fair value

Earnings are forecast to grow 7.73% per year

Earnings grew by 465.3% over the past year

Risk Analysis

Debt is not well covered by operating cash flow

Unstable dividend track record

Hanesbrands Competitors

Under Armour

NYSE:UAA

US$4.0b

PVH

NYSE:PVH

US$4.3b

Carter's

NYSE:CRI

US$3.2b

Columbia Sportswear

NasdaqGS:COLM

US$4.6b

Price History & Performance

Summary of all time highs, changes and price drops for Hanesbrands
Historical stock prices
Current Share Price	US$11.20
52 Week High	US$20.74
52 Week Low	US$9.58
Beta	1.46
1 Month Change	3.99%
3 Month Change	-11.11%
1 Year Change	-43.55%
3 Year Change	-25.68%
5 Year Change	-53.20%
Change since IPO	129.74%

Recent News & Updates

Jul 22

Why Hanesbrands Is A Compelling Dividend Buy

Hanesbrands has plenty of upside potential as it grows its Champion brand internationally and continues to return cash to shareholders. It has its own manufacturing facilities, which makes it better positioned than rivals in face of supply chain disruptions. The dividend and stock price appear to be attractive at the current valuation. Who says you should take emotions out of investing? As a buy and hold type of investor, I take pride in ownership, especially in companies whose products I use on a regular basis. This brings me to Hanesbrands (HBI), whose namesake and Champion clothing I have worn for many years, and recently, I became a shareholder in the company. In this article, I highlight why HBI is currently trading at an appealing price for income and growth, so let's get started. Why HBI? Hanesbrands is a consumer goods company that produces a range of basic apparel for men, women, and children. It operates through the business segments of Innerwear, Activewear, and International, and over the last 12 months, generated $6.9 billion in total revenue. Hanesbrands' stock has seen plenty of pain over the past year, posting a 37% decline since the same time last year as the initial exuberance over work-from-home trends have worn off. Moreover, inflationary pressures and general concerns around supply chain disruptions and economic recession have further piled on the pressure. Plus, a strong dollar doesn't help when the company translates its international sales back to the USD. It would seem as if the company is doing horribly based on the stock price performance, but that doesn't appear to be the case. This is considering the modest but respectable 5% YoY revenue increase (7% on a constant currency basis) during the first quarter, driven by strong Champion brand sales of 6% YoY (constant currency). While U.S. Innerwear sales increased by just 1.5% YoY, it's worth noting that sales have held up well against a difficult comparable last year, when many consumers worked from home and loaded up on the company's products. Notably, sales on a 2-year stacked basis grew by an impressive 37%. Looking forward, management expects strong growth for the Champion brand, and is guiding for $3.2 billion in annual sales by 2024, up from $2 billion last year. This includes seeking to grow its market share through expanded product offerings for younger female consumers in this brand. It also leads with product innovation, which includes its X-Temp technology, providing cooling and wicking benefits that especially help during hot summertime weather. HBI also has key competitive advantages in its supply chain, through ownership of its own manufacturing facilities. This operating flexibility enabled HBI to simultaneously launch recent products in both the U.S. and Australia, with coordinated support from regional marketing campaigns. This strength was noted by Morningstar in its recent analyst report: Another key strategy for Hanes is to improve the efficiency of its supply chain. It has already made progress in this area, having achieved a 15% increase in manufacturing output over the past four years. Hanes, unlike many rivals, primarily operates its own manufacturing facilities. More than 70% of the more than 2 billion apparel units sold by the company each year are manufactured in its own plants or those of dedicated contractors. We believe the combination of strong pricing and production efficiencies should allow Hanes to maintain operating margins around 20% for its American innerwear business despite somewhat inconsistent sales. Moreover, it appears that HBI has plenty of greenfield opportunities internationally, as noted by management during the recent conference call: Looking specifically at Champion, we continued our expansion in China adding new stores in the quarter through our partners. In Europe, we continue to reach new consumers with new styles and silhouettes for kids. And we doubled our spring summer footwear sales driven by an expanded product offerings across channels and geographies.

Jul 22

Hanesbrands (NYSE:HBI) Has A Somewhat Strained Balance Sheet

The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says...

Jul 07

At US$10.19, Is Hanesbrands Inc. (NYSE:HBI) Worth Looking At Closely?

While Hanesbrands Inc. ( NYSE:HBI ) might not be the most widely known stock at the moment, it received a lot of...

Jul 01

Wolverine World Wide divest Champion trademarks to Hanesbrands for $90M

Wolverine World Wide (NYSE:WWW) said on Thursday that Keds, its wholly-owned subsidiary, has sold the Champion trademarks for footwear in the United States and Canada to its longtime licensee, HanesBrands (NYSE:HBI) for $90M in cash. The transaction includes a perpetual license for the company to continue using the trademarks on its Keds Champion footwear. The deal also successfully resolves outstanding litigation between the parties.

Shareholder Returns

	HBI	US Luxury	US Market
7D	0.2%	0.5%	1.0%
1Y	-43.5%	-32.7%	-12.9%

Return vs Industry: HBI underperformed the US Luxury industry which returned -32.7% over the past year.

Return vs Market: HBI underperformed the US Market which returned -12.8% over the past year.

Price Volatility

Is HBI's price volatile compared to industry and market?
HBI volatility
HBI Average Weekly Movement	6.3%
Luxury Industry Average Movement	7.3%
Market Average Movement	7.9%
10% most volatile stocks in US Market	17.1%
10% least volatile stocks in US Market	3.2%

Stable Share Price: HBI is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: HBI's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1901	58,000	Steve Bratspies	https://www.hanes.com

Hanesbrands Inc., a consumer goods company, designs, manufactures, sources, and sells a range of basic apparel for men, women, and children. The company operates through three segments: Innerwear, Activewear, and International. It sells men’s underwear, women’s panties, children’s underwear, activewear, and socks, as well as intimate apparel, such as bras and shapewears; home goods; and T-shirts, fleece, performance apparel, sport shirts, performance T-shirts and shorts, sports bras, teamwear, and thermals, as well as licensed logo apparel in collegiate bookstores, mass retailers, and other channels.

Hanesbrands Fundamentals Summary

How do Hanesbrands's earnings and revenue compare to its market cap?
HBI fundamental statistics
Market Cap	US$3.91b
Earnings (TTM)	US$506.74m
Revenue (TTM)	US$6.87b

7.7x

P/E Ratio

0.6x

P/S Ratio

Is HBI overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
HBI income statement (TTM)
Revenue	US$6.87b
Cost of Revenue	US$4.23b
Gross Profit	US$2.64b
Other Expenses	US$2.13b
Earnings	US$506.74m

Last Reported Earnings

Apr 02, 2022

Next Earnings Date

Aug 11, 2022

Earnings per share (EPS)	1.45
Gross Margin	38.45%
Net Profit Margin	7.38%
Debt/Equity Ratio	447.2%

How did HBI perform over the long term?

See historical performance and comparison

Dividends

5.4%

Current Dividend Yield

42%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is HBI undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for HBI?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for HBI. This is calculated by dividing HBI's market cap by their current preferred multiple.
What is HBI's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$3.91b

HBI key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1.1x
Enterprise Value/EBITDA	7.4x
PEG Ratio	1x

Price to Earnings Ratio vs Peers

How does HBI's PE Ratio compare to its peers?

HBI PE Ratio vs Peers

The above table shows the PE ratio for HBI vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	10.4x
UAA Under Armour	11.8x	4.5%	US$4.0b
PVH PVH	4.4x	10.6%	US$4.3b
CRI Carter's	11.3x	2.1%	US$3.2b
COLM Columbia Sportswear	14x	7.7%	US$4.6b
HBI Hanesbrands	7.7x	7.7%	US$3.9b

Price-To-Earnings vs Peers: HBI is good value based on its Price-To-Earnings Ratio (7.7x) compared to the peer average (10.4x).

Price to Earnings Ratio vs Industry

How does HBI's PE Ratio compare vs other companies in the US Luxury Industry?

Price-To-Earnings vs Industry: HBI is good value based on its Price-To-Earnings Ratio (7.7x) compared to the US Luxury industry average (10x)

Price to Earnings Ratio vs Fair Ratio

What is HBI's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

HBI PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	7.7x
Fair PE Ratio	12.3x

Price-To-Earnings vs Fair Ratio: HBI is good value based on its Price-To-Earnings Ratio (7.7x) compared to the estimated Fair Price-To-Earnings Ratio (12.3x).

Share Price vs Fair Value

What is the Fair Price of HBI when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: HBI ($11.2) is trading below our estimate of fair value ($29.43)

Significantly Below Fair Value: HBI is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.

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Future Growth

How is Hanesbrands forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

7.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: HBI's forecast earnings growth (7.7% per year) is above the savings rate (1.9%).

Earnings vs Market: HBI's earnings (7.7% per year) are forecast to grow slower than the US market (12.8% per year).

High Growth Earnings: HBI's earnings are forecast to grow, but not significantly.

Revenue vs Market: HBI's revenue (2.6% per year) is forecast to grow slower than the US market (7.9% per year).

High Growth Revenue: HBI's revenue (2.6% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: HBI's Return on Equity is forecast to be very high in 3 years time (54.1%).

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Past Performance

How has Hanesbrands performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-4.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: HBI has high quality earnings.

Growing Profit Margin: HBI's current net profit margins (7.4%) are higher than last year (1.4%).

Past Earnings Growth Analysis

Earnings Trend: HBI's earnings have declined by 4.9% per year over the past 5 years.

Accelerating Growth: HBI's earnings growth over the past year (465.3%) exceeds its 5-year average (-4.9% per year).

Earnings vs Industry: HBI earnings growth over the past year (465.3%) exceeded the Luxury industry 54.4%.

Return on Equity

High ROE: Whilst HBI's Return on Equity (65.02%) is outstanding, this metric is skewed due to their high level of debt.

Discover strong past performing companies

Financial Health

How is Hanesbrands's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: HBI's short term assets ($3.3B) exceed its short term liabilities ($2.1B).

Long Term Liabilities: HBI's short term assets ($3.3B) do not cover its long term liabilities ($4.0B).

Debt to Equity History and Analysis

Debt Level: HBI's net debt to equity ratio (399.8%) is considered high.

Reducing Debt: HBI's debt to equity ratio has increased from 431.1% to 447.2% over the past 5 years.

Debt Coverage: HBI's debt is not well covered by operating cash flow (10.8%).

Interest Coverage: HBI's interest payments on its debt are well covered by EBIT (5.9x coverage).

Balance Sheet

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Dividend

What is Hanesbrands's current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

5.36%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: HBI's dividend (5.36%) is higher than the bottom 25% of dividend payers in the US market (1.52%).

High Dividend: HBI's dividend (5.36%) is in the top 25% of dividend payers in the US market (4.09%)

Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, HBI has been paying a dividend for less than 10 years.

Growing Dividend: HBI's dividend payments have increased, but the company has only paid a dividend for 9 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (41.5%), HBI's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (68.7%), HBI's dividend payments are covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

1.9yrs

Average management tenure

CEO

Steve Bratspies (54 yo)

2yrs

Tenure

US$11,031,249

Compensation

Mr. Stephen B. Bratspies, also known as Steve, serves as Chief Executive Officer and Director at Hanesbrands Inc. since August 03, 2020. Mr. Bratspies served as Executive Vice President and Chief Merchandi...

CEO Compensation Analysis

Compensation vs Market: Steve's total compensation ($USD11.03M) is above average for companies of similar size in the US market ($USD6.58M).

Compensation vs Earnings: Insufficient data to compare Steve's compensation with company performance.

Leadership Team

Experienced Management: HBI's management team is not considered experienced ( 1.9 years average tenure), which suggests a new team.

Board Members

Experienced Board: HBI's board of directors are considered experienced (8.3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/06 00:00
End of Day Share Price	2022/08/05 00:00
Earnings	2022/04/02
Annual Earnings	2022/01/01