) reached a new 52-week high of $83.48 on May 13, recording a
healthy year-to-date return of 19.2%. Share prices have been
soaring ever since the company reported solid first-quarter fiscal
2014 results on Apr 24, 2014 and provided a positive outlook for
the fiscal year.
Though sales were slightly behind the Zacks Consensus Estimate,
Hanesbrands' first-quarter earnings per share of 76 cents shot up
49.0% from the prior-year quarter and also beat the Zacks Consensus
Estimate by 31.0%.
Earnings growth was driven by higher margins on the back of the
success of the 'Innovate-to-Elevate' strategy. Increased supply
chain operating efficiencies, lower selling, general and
administrative costs, and successful integration of the Maidenform
Brands boosted profit during the quarter.
Hanesbrands expects the business momentum to continue and upped
its guidance for fiscal 2014. The company now expects earnings per
share in the range of $4.80 to $5.00 instead of $4.60 to $4.80. The
company also expects operating profits within $665 to $685 million,
up from $640 to $660 million expected previously.
Hanesbrands plans to stick to the Innovate-to-Elevate strategy
that helped it to achieve higher unit selling prices and lower unit
costs. The strategy has thus helped the company to increase its
adjusted operating profit margin by 400 basis points over the past
Further, Hanesbrands' focus on innovation, higher-priced and
higher-margin products, lower cotton costs and prudent expense
management bode well for further profit increase.
Other Stocks to Consider
Hanesbrands sports a Zacks Rank #2 (Buy). Other stocks worth
considering in the textile-apparel sector include
Columbia Sportswear Co.
). In the broader retail sector,
Pinnacle Foods Inc.
) is also worth considering. All these stocks have the same Zacks
Rank as Hanesbrands.
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