), one of the world's leading intimate, underwear, sleepwear and
casual apparel manufacturer and seller is geared up for promoting
its tagless men's underwear. The company recently undertook a
promotional campaign for its tagless men's innerwear.
Commercials for the product will be in expensive advertisement
slots in the middle of high-profile entertainment and sports
programs. The company has again roped in basketball legend Michael
Jordan to promote the tagless underwear.
Hanesbrands was the first to introduce tagless undershirts in
the American market. After the huge success of the product
innovation, the company introduced its tagless concept to its range
of briefs, boxers and boxer briefs that gave much needed comfort to
its male customers.
The promotional campaign for tagless underwear is mainly
targeted at affluent customers and it can be concluded that this is
part of Hanesbrands' strategy to focus more on its premium brands
that are less competitive. Also, we believe this is in response to
the aggressive pricing taken up by its competitors like
). The company plans to focus more on the premium and core sectors
where pricing is more favorable and does not require aggressive
Amidst high inflationary pressure on cotton prices, major
suppliers of cotton garments are adopting competitive pricing
resulting in the price of garments reaching a record low
artificially. This was putting pressure on Hanesbrands' margins.
However, its recent decision to focus on migrating its business
model to a more value based brand owner is helping the company to
maintain profit in the innerwear category.
Hanesbrands has also taken a step towards this goal by
announcing the sale of its European imagewear division and exit
from the private label category in the US. It also plans to divest
its Outer Banks brand.
While the company maintained its previously announced fiscal
2012 earnings guidance of $2.50 to $2.60, it expects the
restructuring to reduce sales in the second half of the year by
about $60 million. The company also maintained its earnings outlook
for 2013. Zacks Consensus Estimates for FY12 and FY13 are $2.55 and
Currently, we have a Neutral recommendation on Hanesbrands,
which carries a Zacks #3 Rank (short-term Hold rating).
HANESBRANDS INC (HBI): Free Stock Analysis
WARNACO GRP INC (WRC): Free Stock Analysis
To read this article on Zacks.com click here.