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Can Hanesbrands (HBI) Keep its Earnings Streak Alive in Q1? - Analyst Blog

Hanesbrands Inc.HBI is set to report first-quarter 2015 results on Apr 23, after the market closes. Last quarter, the company posted a positive earnings surprise of 2.78%. The company has also delivered positive earnings surprises in the trailing four quarters with an average surprise of 12.91%. Let us see how things are shaping up for this announcement.

Factors to Consider

Hanesbrands has been reporting decent earnings over the past few years backed by the strategic initiative - Innovate-to-Elevate. The high-margin products that the strategy focuses on should expand margins in the first quarter.

Moreover, the acquisition of Knights Apparel last month is expected to boost first-quarter sales.

Currency has ben hurting the top line for the past few quarters and it is expected to continue doing so in the first quarter as well.

Earnings Whispers

Our proven model does not conclusively show that Hanesbrands is likely to beat earnings this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 to surpass earnings estimate. However, that is not the case here due to the following factors:

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 22 cents. Hence, the difference is 0.00%.

Zacks Rank: Hanesbrands' Zacks Rank #2 (Buy) when combined with a 0.00% ESP makes surprise prediction difficult.

We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Stocks to Consider

Here are some companies that you may consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Columbia Sportswear Company COLM , with an Earnings ESP of +5.71% and a Zacks Rank #1 (Strong Buy).

Pilgrim's Pride Corporation PPC , with an Earnings ESP of +5.19% and a Zacks Rank #2.

Tyson Foods Inc. TSN , with an Earnings ESP of +2.70% and a Zacks Rank #2.

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HANESBRANDS INC (HBI): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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