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Hanesbrands Plunges despite Beating 1Q18 Expectations

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Series snapshot

North Carolina–based Hanesbrands (HBI) reported its 1Q18 results on May 1. The results relate to the three-month period ended March 31. The company beat Wall Street’s top- and bottom-line expectations.

Its EPS (earnings per share) fell 10.3% YoY (year-over-year) to $0.26, beating analysts’ estimate by $0.02. The company also reiterated its fiscal 2018 guidance. Its total sales rose 4.3% YoY to $1.44 billion, beating analysts’ estimate by $8 million. Later in this series, we’ll look at the company’s financial performance and key revenue drivers during the quarter.

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Stock price movement and valuation

Despite the earnings beat, Hanesbrands stock has been trending downward. It fell 4% on May 1 and another 2.5% on May 2. Hanesbrands is currently trading at a one-year forward price-to-earnings ratio of 9.7x, whereas its three-year average is 13.2x. It is cheaper than most apparel players. In Part 4 of this series, we’ll discuss the company’s recent stock market performance.

About Hanesbrands

Hanesbrands is a global marketer of basic apparel. The company’s portfolio includes brands such as Hanes, Champion, Playtex, Just My Size, Wonderbra, and Gear For Sports. The company sells bras, panties, shapewear, sheer hosiery, men’s underwear, children’s underwear, socks, sweatshirts, fleece, and other activewear. Investors seeking exposure to HBI could consider the Guggenheim S&P 500 Equal Weight Consumer Discretionary ETF (RCD), which invests 1.2% of its portfolio in HBI.

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