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Comparing HanesBrands’ Shareholder Returns to Peers

Sonya Bells

A Sneak Peek inside HanesBrands ahead of Its 1Q16 Results

(Continued from Prior Part)

Stock market performance

As of April 15, 2016, HanesBrands’ stock has lost 5% YTD (year-to-date), after having gained 6% in 2015. The company’s stock plummeted by ~15% on February 5, 2016, on weaker-than-expected fourth quarter results.

By comparison, S&P 500 Apparel and Accessories index improved by 8% YTD as of April 15. HBI, PVH Corp (PVH), Michael Kors (KORS), Coach (COH), and VFC Corp (VFC) are all components of S&P 500 Apparel and Accessories index. PVH Corp (PVH) and Michael Kors (KORS) have gained 29% and 30% YTD, Coach (COH), and VFC Corp (VFC) gained 16% and 5.3%, respectively, YTD as of April 15, 2016.

Dividends

HanesBrands pays healthy dividends to its shareholders. The company’s current dividend payout stands at 38%. By comparison, PVH Corp’s (PVH) and Ralph Lauren’s (RL) dividend payouts are around 2.2% and 23%, respectively. Coach (COH) has one of the highest dividend payouts among fashion companies, which stands at 93%. HBI’s one-year forward dividend yield stands at 1.6%, as compared to RL’s 2.2% and Coach’s 3.6%.

Shareholder’s Returns

HBI’s YTD total shareholder returns provided to shareholders through dividends stands at -5.1%. This is among the lowest in the fashion industry. While PVH Corp’s YTD returns stand at 30%, Kate Spade (KATE) has given the highest returns of around 38%. The differential in total returns was due to HBI’s poor stock market performance, particularly after its weak 4Q16 results.

HanesBrands’ stock repurchase program

In fiscal 2015, HBI repurchased 12 million shares for $352 million. The company expects to spend a similar amount in share repurchases in fiscal 2016. Notably, the iShares Morningstar Mid-Cap Growth Index Fund (JKH) invests 0.81% of its total holdings in HanesBrands.

In the next and final part of the series, we’ll analyze the company’s fiscal 2016 guidance and current valuations.

Continue to Next Part

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