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Hanesbrands Delivers Weak 2Q16 Results: What Happened?

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Snapshot of the series

North Caroline–based Hanesbrands (HBI) reported its results for the second quarter of 2016 after the Market closed on August 2, 2016. The company missed profit and sales expectations, reporting EPS (earnings per share) of $0.51 on $1.5 billion in sales.

Analysts on average were expecting the company to report EPS of $0.52 on revenue of $1.5 billion.

The company also lowered its 2016 EPS GAAP (generally accepted accounting principles) guidance to $1.44–$1.54 from the previous estimate of $1.51–$1.57. It also revised its GAAP operating profit range downward to $760 million–$795 million compared to $780 million–$815 million guided previously.

The company has bottomed out its one-year forward earnings multiple and is currently trading at 11.9x. It’s cheaper than most apparel and accessory companies such as PVH (PVH), Ralph Lauren (RL), and VF (VFC), which are trading at 14.3x, 17.2x, and 18x, respectively.

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About Hanesbrands

Hanesbrands is a global marketer of leading everyday basic apparels such as Hanes, Champion, Playtex, Bali, Maidenform, JMS/Just My Size, Wonderbra, and Gear for Sports. The company sells bras, panties, shapewear, sheer hosiery, men’s underwear, children’s underwear, socks, T-shirts, sweatshirts, fleece, and other activewear throughout the world.

HBI is a member of the S&P 500 Index and is ranked no. 490 on the Fortune 500 list. The iShares Morningstar Mid-Cap Growth (JKH) invests 0.66% of its holdings in Hanesbrands.

What is the series all about?

This series is an overview of Hanesbrands’ 2Q16 results. We’ll look at the company’s financial performance in 2Q16, analyze the performance of its major segments, and look at the company’s fiscal 2016 guidance. We’ll also evaluate its stock market performance and look at its current valuation compared to its peers.

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