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3Q16 Preview: After a Weak 2Q, Can Hanesbrands Bounce Back?

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Snapshot of the series

North Carolina-based Hanesbrands (HBI) is slated to report its 3Q16 results on Thursday, October 27, 2016. The results relate to the three-month period ended September 2016.

In the second quarter, the company reported EPS (earnings per share) of 51 cents on $1.47 billion in sales. It missed Wall Street’s profit and sales expectations. On average, analysts were expecting EPS of $0.52 on total sales of $1.53 billion.

For the third quarter, HBI’s sales are projected to rise 10.9% YoY (year-over-year) to $1.8 billion. Its EPS are predicted to rise 13% YoY to 56 cents. Year-to-date, HBI’s earnings have risen 2.6% YoY, while its top line has fallen 1.8% YoY.

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Valuation overview

Hanesbrands is currently trading at a one-year forward PE (price-to-earnings) ratio of 11.8x, operating close to the lower end of its 52-week PE range of 11.5x–16.5x. The company is trading at a discount to most branded apparel peers. PVH (PVH), VF Corporation (VFC), and Ralph Lauren (RL) are currently trading at 15.7x, 16.4x, and 18.1x, respectively.

About Hanesbrands

Hanesbrands is a global marketer of apparel brands such as Hanes, Champion, Playtex, Bali, Maidenform, 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.

HBI is a member of the S&P 500 and ranked as number 490 on the Fortune 500 list. The iShares Morningstar Mid-Cap Growth Index ETF (JKH) invests 0.66% of its holdings in Hanesbrands.

What’s this series about?

This series is an overview of Hanesbrands’ 3Q16 results. We’ll discuss the company’s financial performance in 2Q16, major segments, fiscal 2016 guidance, and stock market performance, and compare its valuation with peers’.

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