) continues to be on a roll. The apparel maker recently beat the
Zacks Consensus Estimate for the 8th quarter in a row. This Zacks
Rank #1 (Strong Buy) also raised 2014 guidance.
HanesBrands is known for its underwear. But in addition to
underwear, it sells bras, panties, shapewear, socks, hosiery,
T-shirts and activewear under the brands of Hanes, Champion,
Playtex, Bali, Maidenform, Flexees, Just My Size, barely there,
Wonderbra and Gear for Sports.
HanesBrands is a global company, with employees in 25 countries.
Big Beat in Q4
On Jan 29, HanesBrands reported fourth quarter sales and kept its
earnings surprise winning streak intact by beating the Zacks
Consensus Estimate by 8.9%. Earnings were $0.98 compared the Zacks
Consensus of $0.90.
Sales jumped 12% to $1.3 billion but were boosted by the
acquisition of Maidenform Brands, which contributed 9% of the sales
growth in the quarter. The Maidenform acquisition closed on Oct 7,
2013 and integration of front-end, supply chain and logistics
operations is still ongoing.
Operating margin rose 320 basis points to 12.9% due to lower cotton
costs and benefits of the Innovate-to-Elevate initiatives.
Raised Full Year Guidance
HanesBrands surprised the Street by raising its previous guidance
to a range of $4.60 to $4.80 from previous guidance of $4.25 to
The analysts were already at the high end of the previous range as
the Zacks Consensus Estimate had been calling for $4.47. But after
the earnings report, the analysts raised estimates again which
pushed up the Zacks Consensus to $4.71.
That's earnings growth of 20.5%.
Dividend Increased 50%
HanesBrands also demonstrated the belief in its business model by
raising its dividend by 50% to $0.30 a quarter. It first offered a
dividend only a year ago, in April 2013. For the prior four
quarters it had paid out at $0.20.
The new dividend will be paid March 11, 2014 to stockholders of
record at the close of business Feb 18, 2014.
"Hanes is generating significant value for shareholders through
earnings growth, a strong balance sheet and significant cash flow,"
said Chairman and Chief Executive Officer Richard A. Noll.
"We are in a great position to increase the amount of cash we can
return to stockholders, while retaining ample flexibility to pursue
other growth opportunities, including acquisitions," he added.
Shares at Multi-Year High
Shareholders of HanesBrands have been amply rewarded over the last
But even though shares are at multi-year highs, valuations aren't
stretched. HanesBrands has a forward P/E of just 14.5 which is
below the average of the S&P 500 of 14.8.
If you're looking for a company that is bullish on 2014 and is
expected to grow earnings by the double digits, then HanesBrands
should be on your short list.
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HANESBRANDS INC (HBI): Free Stock Analysis
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