Hanesbrands Reaches New 52-Week High - Analyst Blog
Shares of the apparel chain Hanesbrands Inc. ( HBI ) reached a new 52-week high of $51.89 on Monday Jun 17, following the company's solid results in the first quarter of 2013 and the company's decision to initiate a quarterly dividend from Jun 3, 2013.
The closing price of the textile retailer HBI was $51.71 on Jun 17, representing a solid 1-year return of about 78.3% and a year-to-date return of about 45.3%. Average volume of shares traded over the last three months stands at approximately 1089K.
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 quarter.
Hanesbrands delivered 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.
Though revenues were affected by a tough retail environment and lower consumer demand, gross margin increased 140 basis points (bps) in the quarter, resulting from positive pricing and shutting down 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.
Other Stocks to Consider
Hanesbrands carries a Zacks Rank #1 (Strong Buy). Other stocks in the textile and apparel industry that are also worth considering are Michael Kors Holding Ltd ( KORS ) and Oxford Industries Inc. ( OXM ), both carrying a Zacks Rank #2 (Buy)
HANESBRANDS INC (HBI): Free Stock Analysis Report
MICHAEL KORS (KORS): Free Stock Analysis Report
OXFORD INDS INC (OXM): Free Stock Analysis Report
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