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Hanesbrands (HBI) Queued for Q4 Earnings: Things to Note

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·6 min read
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Hanesbrands Inc. HBI is likely to witness a decline in the top line when it reports fourth-quarter 2021 numbers on Feb 3. The Zacks Consensus Estimate for revenues is pegged at $1,748 million, suggesting a fall of almost 3% from the prior-year quarter’s reported figure. The consensus mark for 2021 revenues is pegged at $6,798 million, indicating growth of 2% from the year-ago period’s reported figure.

Hanesbrands’ bottom line is likely to grow year over year in the fourth quarter. The Zacks Consensus Estimate for quarterly earnings has moved up by a penny in the past 7 days to 44 cents per share, suggesting 15.8% growth from the prior-year quarter’s reported figure. The company’s consensus mark for the 2021 bottom line is pegged at $1.83 per share, indicating growth of 26.2% from the year-ago period’s reported figure. The designer, manufacturer and seller of apparel has a trailing four-quarter earnings surprise of 28.6%, on average. Hanesbrands delivered an earnings surprise of 12.8% in the last reported quarter.

Hanesbrands Inc. Price, Consensus and EPS Surprise

Hanesbrands Inc. Price, Consensus and EPS Surprise
Hanesbrands Inc. Price, Consensus and EPS Surprise

Hanesbrands Inc. price-consensus-eps-surprise-chart | Hanesbrands Inc. Quote

Things To Note

Hanesbrands is benefiting from a growing e-commerce channel. In this regard, the company is on track to make investments in technology, data science and core digital capabilities to deliver online growth. Strength in its Full Potential plan, designed around four pillars — grow global Champion, re-ignite innerwear growth, drive consumer-centricity and focus on the portfolio — bodes well. In addition, the company is benefiting from solid demand across its global innerwear and activewear businesses.

For fourth-quarter 2021, net sales from continuing operations are anticipated in the range of $1.71-$1.78 billion. The mid-point of the guidance suggests year-over-year net sales growth of 3% and includes an expected gain of $6 million from favorable currency movements. Adjusted for PPE and the 53rd week in 2020, net sales at the midpoint are expected to have increased 8%. For 2021, net sales from continuing operations are anticipated in the range of $6.76-$6.83 billion, including $108-million benefits from favorable currency rates. The mid-point of the guidance suggests almost 11% year-over-year growth. Adjusted operating profit is likely to have come in the range of $910-$930 million for 2021. The mid-point of the guidance indicates 18% year-over-year growth.

On its third-quarter 2021 earnings call, management stated that Hanesbrands is grappling with broad-based inflation pressures. Apart from this, the company is facing transportation bottlenecks worldwide. Thanks to the ongoing disruptions across the global transportation environment, the company is facing increased pressure from higher freight costs, mainly ocean freight and escalated labor costs in distribution centers.

Adjusted operating profit is likely to have come between $200 million and $220 million for the fourth quarter. At the mid-point, this indicates an operating margin of roughly 12%, including the impacts of cost inflation and higher brand investment. Adjusted earnings per share (EPS) are likely to have come in the range of 40-45 cents per share for the quarter under review. Adjusted EPS for 2021are envisioned in the range of $1.79-$1.84, reflecting higher cost inflation year over year and on a two-year basis and increased brand marketing investment.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Hanesbrands this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Hanesbrands carries a Zacks Rank #4 (Sell) and has an Earnings ESP of +0.92%.

Some Stocks With Favorable Combinations

Here are some companies that you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat.

Gildan Activewear GIL currently has an Earnings ESP of +9.57% and a Zacks Rank of 2 at present. GIL is likely to register an increase in the bottom line when it reports fourth-quarter 2021 numbers. The Zacks Consensus Estimate for quarterly earnings per share of 58 cents suggests an increase of almost 29% from the year-ago quarter’s reported number.

Gildan Activewear’s top line is expected to increase from the prior-year quarter’s reported number. The Zacks Consensus Estimate for quarterly revenues is pegged at $731 million, suggesting growth of 5.9% from the prior-year quarter’s tally. GIL has a trailing four-quarter earnings surprise of 85%, on average.You can see the complete list of today’s Zacks #1 Rank stocks here.

Skechers SKX currently has an Earnings ESP of +1.05% and a Zacks Rank of 2. The company is expected to register top and bottom-line growth when it reports the fourth-quarter 2021 numbers. The Zacks Consensus Estimate for SKX’s quarterly revenues is pegged at $1.53 billion, which suggests growth of 15.8% from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for Skechers’ quarterly earnings has moved up by a penny in the last 30 days at 32 cents per share, suggesting 33.3% growth from the year-ago reported number. SKX has delivered an earnings beat of 18.7%, on average, in the trailing four quarters.

Ralph Lauren Corporation RL currently has an Earnings ESP of +0.86% and a Zacks Rank of 3 at present. RL is expected to register bottom-line growth when it reports third-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for earnings is pegged at $2.18 per share, suggesting growth of 30.5% from the year-ago quarter’s reported figure.

Ralph Lauren’s top line is expected to increase from the prior-year quarter’s reported number. The Zacks Consensus Estimate for revenues is pegged at $1.64 billion, indicating a rise of 14.3% from the year-ago quarter’s reported figure. RL has a trailing four-quarter earnings surprise of 86%, on average.

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Skechers U.S.A., Inc. (SKX) : Free Stock Analysis Report

Ralph Lauren Corporation (RL) : Free Stock Analysis Report

Hanesbrands Inc. (HBI) : Free Stock Analysis Report

Gildan Activewear, Inc. (GIL) : Free Stock Analysis Report

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