Shares of the apparel chain
) reached 52-week high of $47.71 on Monday Apr 8, following the
company's announcement to initiate a quarterly dividend of 26
cents from Jun 3 that implies a yield of 58.6%.
The closing price of the textile retailer on Apr 8 was $47.65,
representing a solid 1-year return of about 69.3% and
year-to-date return of about 33.9%. Average volume of shares
traded over the last three months stands at approximately
Hanesbrands has a solid free cash flow. The company is
committed to use the excess cash to return value to its
shareholders. Hanesbrands intends to use almost 20% to 25% of its
free cash flow to pay dividend.
Winston-Salem, NC-based Hanesbrands is geared to maximize
returns to shareholders. Apart from paying in the form of
dividends, the company also intends to repurchase shares,
although it is yet to formulate its share buyback strategy.
In the recently concluded 2012-fourth quarter, Hanesbrands
delivered earnings of $1.07 per share, which more than doubled
from the prior year quarter and exceeded the Zacks Consensus
Estimate by 7%.
Hanesbrands' focus on the 'Innovate to Elevate' strategy is
helping the company boost its earnings. The strategy focuses on
value added, higher-priced and higher margin items that can be
supplied at lower cost. Revenue growth was fuelled by the
undergarment categories like Tagless, Comfort Blend and Smart
Sizes which consistently occupy major share in the market.
The company also hinted that some bolt-on-acquisitions are
also in the way, as it wants to deploy free cash in some
strategic buyout in the near future.
For the first quarter 2013, Hanesbrands expects sales to be
$945 million. Operating profits are expected between $82 million
and $85 million for the quarter. Earnings are expected to lie
within the range of 48 cents to 51 cents per share.
For full year 2013, the company reaffirmed its sales guidance
of $4.6 billion. It expects operating profits between $500
million to $550 million for the year. Earnings are expected to
lie within the band of $3.25 to $3.40 per share.
Hanesbrands engages in marketing innerwear, outerwear and
hosiery apparel and carries a Zacks Rank #2 (Buy). Other stocks
in the same industry that are worth a look include
Joe's Jeans Inc.
Ralph Lauren Corp
). All of them carry a Zacks Rank #2 (Buy).
HANESBRANDS INC (HBI): Free Stock Analysis
JOES JEANS INC (JOEZ): Free Stock Analysis
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