Zacks Investment Research upgraded
) to a Zacks Rank #1 (Strong Buy) on Jun 7 on the back of rising
estimates following impressive first quarter 2013 results
announced on Apr 23.
Why the Upgrade?
Hanesbrands' focus on innovation, emphasis on higher-priced
and higher-margin products, lower cotton costs and prudent
expense management led to the solid results. In addition, the
'Innovate to Elevate' strategy helped Hanesbrands achieve higher
unit selling prices and lower unit costs, which contributed to
margin enhancement and improved profitability in the first
Hanesbrands delivered first-quarter 2013 earnings of 51 cents
compared to a loss of 25 cents suffered in the comparable
prior-year quarter. The upswing was driven by lower cotton cost
and disciplined cost management. Earnings also beat the Zacks
Consensus Estimate by 1.9%. In fact, Hanesbrands has topped
earnings estimates in all of the last five quarters.
Though revenues were impacted by a tough retail environment
and lower consumer demand, gross margin inflated 140 basis points
(bps) in the quarter, resulting from positive pricing and
shutdown 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 Innovate-to-Elevate strategy,
which boosted margins.
Estimates have mostly increased after the strong first quarter
results. The Zacks Consensus Estimate increased 0.9% to $3.44 per
share for 2013, while it grew 2.0% to $4.05 per share for 2014
over the past 60 days.
Other Stocks to Consider
Like Hansbrands, its peer
Michael Kors Holding Ltd
) also holds a Zacks Rank #1. Other stocks in the textile and
apparel industry that are worth considering are
G-III Apparel Group, Ltd.
Joe's Jeans Inc
), both of them carrying a Zacks Rank #2 (Buy).
G-III APPAREL (GIII): Free Stock Analysis
HANESBRANDS INC (HBI): Free Stock Analysis
JOES JEANS INC (JOEZ): Free Stock Analysis
MICHAEL KORS (KORS): Free Stock Analysis
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