Hanesbrands Inc (HBI): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
We maintain our Outperform rating on Hanesbrands following its remarkable second-quarter fiscal 2014 results. Earnings per share of $1.71 improved 44% from the year-ago results and beat the Zacks Consensus Estimate by 14%. Profit was driven by higher margins as a result of increased supply chain operating efficiencies, lower selling, general and administrative costs, and successful integration of the Maidenform Brands. Sales were in line with the Zacks Consensus Estimate but increased 12% from the year-ago results. Hanesbrands continues its strategic acquisitions and the recent DB Apparel takeover have prompted it to raise the fiscal 2014 outlook. The company is also benefiting from favorable pricing and successful implementation of the margin boosting "Innovate to Elevate" strategy. Overall, we are impressed with the company's strong brand portfolio and its continuous innovations. Moreover, it is gaining shelf space at major retail stores through several deals.

Overview:

Headquartered in Winston-Salem, NC, Hanesbrands Inc. engages in the design, manufacture, sourcing and sale of apparel essentials for men, women and children in the U.S. and internationally. The company offers products under well-established brands such as Hanes, Champion, Playtex, Bali, Just My Size, Barely There and Wonderbra.

Hanesbrands distributes its products through various channels, including mass merchants, national chains and department stores and other retail channels, such as third-party embellishers, specialty retailers, warehouse clubs and sporting goods stores.

Hanesbrands reports its operating results under four major segments:


Innerwear segment: This segment manufactures and sells core apparel products, such as women's intimate apparel, men's underwear, kids' underwear and socks, marketed under well-known brands like Hanes, Bali, Playtex, Barely There, Just My Size and Wonderbra. Innerwear segment also includes the Hosiery segment, which makes women's sheer hosiery in the United States.

Outerwear segment: The segment consists of casual wear and active wear products. The casual product category provides comfortable clothing for men, women and children under the Hanes and Just My Size brands. The active wear products include T-shirts and fleece sold to both retailers and wholesalers. The company sells this segment's products to both retailers and wholesalers.

International segment: The International segment includes sales from Latin America, Asia, Canada, Australia, Japan, Mexico and Brazil. The company also has sales offices in India and China. The segment produces and sells products under brands such as Hanes, Champion, Wonderbra, Playtex, Stedman, Zorba, Rinbros, Kendall, Soly Oro, Ritmo and Track N Field.

Direct to Consumer segment: This segment includes sales from value-based store outlets and Internet operations that sell products to its customers directly.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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