) reached a new 52-week high of $53.13 on Jul 8 on the back of
bright prospects for 2013, driven by the company's plans to roll
out new products.
Shares of this textile retailer closed at $52.59 on Jul 8,
recording a healthy return of 48.3% on a year-to-date basis. The
company's long-term estimated EPS growth rate is 14%. Average
volume of shares traded over the last three months came in at
Hanesbrands plans to stick to its 'Innovate to Elevate'
strategy that helped it to achieve higher unit selling prices and
lower unit costs, thus contributing to margin enhancement and
improved profitability in 2013. Further, Hanesbrands' focus on
innovation, emphasis on higher-priced and higher-margin products,
lower cotton costs and prudent expense management is expected to
drive solid results in 2013.
The company also has substantial cash flows, which will create
many opportunities for increasing shareholder returns.
Hanesbrands initiated a regular quarterly dividend payment of 20
cents in Apr 2013 and intends to make dividend payout of 20% to
25% of free cash flow in the coming years. The company also plans
to engage in acquisitions and share repurchases in order to
maximize the value of cash flows.
Hanesbrands reported first-quarter 2013 earnings of 51 cents
compared to a loss of 25 cents in the comparable prior-year
quarter. The upswing was driven by lower cotton costs and
disciplined cost management. Earnings also beat the Zacks
Consensus Estimate by 1.9%. In fact, Hanesbrands has topped
earnings estimates in the last five quarters.
Gross margin increased 140 basis points (bps) in the quarter
on the back of positive pricing and closure of underperforming
businesses. Operating margin also expanded 790 bps to 9.0% on the
back of lower cotton costs, positive pricing and success of the
Other Stocks to Consider
Hanesbrands holds a Zacks Rank #3 (Hold). Other stocks in the
textile and apparel industry that are also worth considering are
Michael Kors Holding Ltd
G-III Apparel Group Inc
), all of them carrying a Zacks Rank #2 (Buy).
G-III APPAREL (GIII): Free Stock Analysis
HANESBRANDS INC (HBI): Free Stock Analysis
MICHAEL KORS (KORS): Free Stock Analysis
PVH CORP (PVH): Free Stock Analysis Report
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