Hanesbrands Inc (HBI, Financial), a stalwart in the apparel manufacturing industry, has experienced a notable fluctuation in its stock price recently. Over the past week, the stock has declined by 12.46%, settling at $6.08. However, looking at the quarterly performance, there's a brighter picture with a 15.81% increase. Currently, the GF Value of HBI stands at $5.88, suggesting that the stock is Fairly Valued, a shift from its previous label as a Possible Value Trap when the GF Value was $8.22.
Overview of Hanesbrands Inc
Hanesbrands Inc, based in Winston-Salem, North Carolina, is a key player in the global apparel market. The company, founded in 1901, manufactures and sells a variety of basic and athletic apparel. Notable brands under its umbrella include Hanes, Playtex, and Maidenform among others. Hanesbrands is known for its significant vertical integration, producing over 70% of its products in company-controlled facilities across more than three dozen countries. This integration allows Hanesbrands to maintain control over its production processes and costs, providing a competitive edge in the apparel industry.
Assessing Profitability
Hanesbrands holds a Profitability Rank of 6/10, indicating moderate profitability within the industry. The company's Operating Margin is 5.25%, which is higher than 58.28% of its peers. However, its Return on Equity (ROE) is -6.53%, and Return on Assets (ROA) stands at -0.38%, both metrics showcasing challenges in generating returns on shareholder equity and asset investments respectively. The Return on Invested Capital (ROIC) at 4.34% is more favorable, surpassing 57.65% of industry counterparts. Over the past decade, Hanesbrands has been profitable in 7 out of 10 years, demonstrating a relatively stable financial base amidst industry fluctuations.
Growth Trajectory and Challenges
The Growth Rank for Hanesbrands is currently at 3/10, reflecting below-average growth prospects. The company has seen a 3-Year Revenue Growth Rate per Share of -2.50% and a 5-Year Rate of -1.70%. Looking ahead, the Total Revenue Growth Rate (Future 3Y to 5Y Est) is projected at -3.02%. Despite these challenging figures, the Future EPS Growth Rate (3Y to 5Y Est) is expected to surge by 124.48%, indicating potential for significant earnings improvements relative to its peers.
Investor Holdings
Notable investors in Hanesbrands include Charles Brandes, holding 4,651,133 shares (1.32%), Jim Simons with 2,139,100 shares (0.61%), and HOTCHKIS & WILEY, which owns 1,378,510 shares (0.39%). These holdings reflect a level of confidence from some savvy market players, despite the mixed financial signals.
Competitive Landscape
Hanesbrands operates in a competitive industry, with key players like Oxford Industries Inc (OXM, Financial), Ermenegildo Zegna NV (ZGN, Financial), and Under Armour Inc (UAA, Financial) also vying for market share. These companies have market caps of $1.48 billion, $2.63 billion, and $3.28 billion respectively, positioning them in close competition with Hanesbrands.
Conclusion
In conclusion, Hanesbrands Inc's recent stock performance reflects a complex interplay of market dynamics and internal financial health. While the quarterly surge in stock price highlights investor optimism, the underlying growth and profitability metrics suggest a cautious approach. The company's strategic positioning and future earnings potential will be critical as it navigates competitive pressures and market expectations. Investors should keep a close eye on upcoming financial reports and market trends to better understand the potential trajectory of Hanesbrands in the volatile apparel industry.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
