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1. Company Snapshot

1.a. Company Description

Hanesbrands Inc., a consumer goods company, designs, manufactures, sources, and sells a range of basic apparel for men, women, and children.The company operates through three segments: Innerwear, Activewear, and International.It sells men's underwear, women's panties, children's underwear, activewear, and socks, as well as intimate apparel, such as bras and shapewears; home goods; and T-shirts, fleece, performance apparel, sport shirts, performance T-shirts and shorts, sports bras, teamwear, and thermals, as well as licensed logo apparel in collegiate bookstores, mass retailers, and other channels.


The company licenses its Champion name for footwear and sports accessories.Hanesbrands Inc.provides its products primarily under the Hanes, Champion, Maidenform, JMS/Just My Size, Bali, Polo Ralph Lauren, Playtex, DKNY, Alternative, Gear for Sports, Comfortwash, Hanes Beefy-T, Bonds, DIM, Sheridan, Bras N Things, Lovable, Wonderbra, Berlei, Abanderado, Shock Absorber, Zorba, Explorer, Sol y Oro, Maidenform, Rinbros, and Bellinda brand names.


The company markets its products through retailers, wholesalers, and third-party embellishers.As of January 2, 2022, it operated 216 retail and direct outlet stores in the United States and the Commonwealth of Puerto Rico, as well as 626 retail and outlet stores internationally.The company also sells its products in Europe, Australia, Asia, Latin America, Canada, the Middle East, Africa, Mexico, and Brazil.


Hanesbrands Inc.was founded in 1901 and is headquartered in Winston-Salem, North Carolina.

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1.b. Last Insights on HBI

Hanesbrands' recent performance was driven by strong Q2 earnings and revenue growth, with a 1.8% sales rise and solid margin gains from cost savings. The company raised its 2025 outlook, citing benefits from its growth strategy and prior transformation initiatives. Additionally, Hanesbrands' debt reduction and asset sales efforts are positioning it for margin expansion and improved financials. Its recent EPS and revenue beats, along with a lower net leverage ratio, signal operational momentum.

1.c. Company Highlights

2. Hanesbrands Delivers Strong Q1 2025 Earnings Amidst Tariff Headwinds

Hanesbrands reported a solid first quarter for 2025, exceeding expectations across key financial metrics. The company posted sales of $760 million, a 4% increase in organic international sales, and a 1% decline in U.S. sales, pressured by consumer headwinds, particularly in the intimates category. Despite these challenges, the company saw robust growth in basics, active wear, and new businesses, with scrubs and loungewear sales surging 60%. Gross margin expanded by 390 basis points, driven by cost reductions and pricing actions, while SG&A expenses decreased 5%. Notably, EPS jumped 240% to $0.07, significantly outpacing analyst estimates of $0.03, benefiting from higher margins and lower interest expense due to debt reduction.

Publication Date: May -08

📋 Highlights
  • Strong Organic Sales Growth: Organic international sales grew 4%, while U.S. sales decreased 1%, with solid growth in basics, active, and new businesses, including 60% growth in scrubs and loungewear.
  • Gross Margin Expansion: Gross margin expanded 390 basis points, driven by cost reductions and pricing actions, contributing to improved profitability.
  • EPS Increase: EPS increased 240% to $0.07, driven by higher margins and lower interest expense due to debt reduction.
  • SG&A Cost Reduction: SG&A expenses decreased 5%, contributing to operating margin expansion and overall profitability improvement.
  • Tariff Mitigation Strategy: The company is effectively mitigating tariff impacts through a diversified supply chain, cost reductions, and strategic pricing, with no exposure to China.

Operational Highlights and Strategic Initiatives

The company’s growth strategy is gaining traction, with a diversified supply chain and strong retailer relationships positioning it well to navigate the current tariff environment. As noted by Steve Bratspies, Chief Executive Officer, “Our diversified supply chain and strong retailer relationships position us well to mitigate tariff impacts and capture incremental revenue opportunities.” Hanesbrands is leveraging its Western Hemisphere manufacturing network to shift production and offset tariff headwinds. Additionally, the company is capitalizing on opportunities as retailers seek alternatives to Chinese-sourced products.

Valuation and Financial Position

From a valuation perspective, Hanesbrands currently trades at a P/S ratio of 0.46 and an EV/EBITDA of 15.63, reflecting a balanced view of its growth prospects and operational efficiency. The company’s free cash flow yield of 12.59% and ROIC of 27.8% highlight its ability to generate strong cash flows and invest effectively in its business. However, the negative ROE of -218.75% raises concerns about equity returns, potentially impacted by the company’s elevated debt levels, with net debt to EBITDA standing at 8.83x. Despite these leverage concerns, the company’s strong balance sheet and competitive advantages provide a cushion against macroeconomic uncertainties.

3. NewsRoom

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Hanesbrands Inc. $HBI Shares Bought by Barington Capital Group L.P.

Dec -01

Source: defenseworld.net

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Ensign Peak Advisors Inc Lowers Holdings in Hanesbrands Inc. $HBI

Dec -01

Source: defenseworld.net

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Sandisk Set to Join S&P 500; Upwork, First Interstate BancSystem, PTC Therapeutics to Join S&P SmallCap 600

Nov -24

Source: prnewswire.com

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Neo Ivy Initiates Hanesbrands Position with 627,000 Share Buy

Nov -12

Source: fool.com

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This Investor Bought $8.4 Million in Hanesbrands Stock as Clothing Giant Gears Up for Gildan Merger

Nov -12

Source: fool.com

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Hanesbrands Q3 Earnings Miss Estimates, Sales Decline Y/Y

Nov -07

Source: zacks.com

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HanesBrands Inc. Announces Third-Quarter 2025 Results

Nov -06

Source: businesswire.com

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Hanesbrands to Report Q3 Earnings: What Should Investors Expect?

Nov -05

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.69%)

6. Segments

Innerwear

Expected Growth: 4.65%

Hanesbrands' Innerwear segment growth of 4.65% is driven by increasing demand for comfort-focused and athleisure-inspired products, successful brand relaunches, and strategic pricing initiatives. Additionally, the company's focus on e-commerce and omnichannel retailing has expanded its customer reach, contributing to the segment's growth.

International

Expected Growth: 4.83%

Hanesbrands Inc.'s international segment growth of 4.83% is driven by increasing demand for innerwear and activewear in emerging markets, particularly in Asia and Latin America. Expansion of e-commerce channels, strategic partnerships, and investments in marketing and branding also contribute to growth. Additionally, the company's focus on sustainability and product innovation resonates with environmentally conscious consumers, further boosting international sales.

Activewear

Expected Growth: 9.03%

Hanesbrands' activewear segment growth of 9.03% is driven by increasing demand for comfortable and functional clothing, popularity of athleisure wear, expansion of online channels, and strategic partnerships with key retailers. Additionally, the company's focus on innovation, quality, and sustainability resonates with consumers, contributing to the segment's growth.

Other

Expected Growth: 4.83%

Hanesbrands' 4.83% growth in 'Other' segment is driven by increasing demand for Champion brand activewear, expansion of online channels, and strategic acquisitions. Additionally, the company's focus on sustainability and innovation in products such as eco-friendly fabrics and smart clothing also contribute to growth.

7. Detailed Products

Innerwear

Hanesbrands Inc. offers a wide range of innerwear products for men, women, and children, including bras, panties, shapewear, socks, and underwear.

Activewear

The company's activewear products include performance-driven apparel for men and women, such as tops, bottoms, and outerwear for fitness, running, and outdoor activities.

Socks

Hanesbrands offers a diverse range of socks for men, women, and children, including athletic socks, casual socks, and dress socks.

Hosiery

The company's hosiery products include tights, leggings, and knee-highs for women and girls.

Shapewear

Hanesbrands offers a range of shapewear products, including bodysuits, waist cinchers, and thigh slimmers.

Legwear

The company's legwear products include leggings, tights, and knee-highs for men, women, and children.

8. Hanesbrands Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Hanesbrands Inc. operates in a competitive market with many substitutes available, but the company's strong brand recognition and quality products help to mitigate the threat.

Bargaining Power Of Customers

Hanesbrands Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's strong brand portfolio and wide distribution network make it difficult for customers to negotiate prices.

Bargaining Power Of Suppliers

Hanesbrands Inc. relies on a large network of suppliers for raw materials, which gives suppliers some bargaining power. However, the company's scale and long-term relationships with suppliers help to mitigate this threat.

Threat Of New Entrants

The apparel industry has high barriers to entry, including significant capital requirements and the need for established distribution networks. This makes it difficult for new entrants to compete with Hanesbrands Inc.

Intensity Of Rivalry

The apparel industry is highly competitive, with many established players competing for market share. Hanesbrands Inc. faces intense competition from other apparel companies, which can lead to pricing pressure and reduced profit margins.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 89.04%
Debt Cost 10.37%
Equity Weight 10.96%
Equity Cost 12.10%
WACC 10.56%
Leverage 812.03%

11. Quality Control: Hanesbrands Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
G-III Apparel

A-Score: 4.9/10

Value: 8.9

Growth: 5.6

Quality: 6.8

Yield: 0.0

Momentum: 3.5

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Vince

A-Score: 4.3/10

Value: 9.6

Growth: 2.7

Quality: 4.0

Yield: 0.0

Momentum: 9.5

Volatility: 0.0

1-Year Total Return ->

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Stock-Card
Culp

A-Score: 4.1/10

Value: 9.8

Growth: 1.2

Quality: 5.0

Yield: 1.0

Momentum: 2.0

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
FIGS

A-Score: 4.1/10

Value: 1.7

Growth: 8.8

Quality: 5.8

Yield: 0.0

Momentum: 5.0

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
Lakeland Industries

A-Score: 3.5/10

Value: 9.0

Growth: 2.1

Quality: 3.7

Yield: 1.0

Momentum: 2.0

Volatility: 3.3

1-Year Total Return ->

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Stock-Card
Hanesbrands

A-Score: 3.0/10

Value: 3.5

Growth: 0.9

Quality: 4.5

Yield: 2.0

Momentum: 4.0

Volatility: 3.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

6.47$

Current Price

6.47$

Potential

-0.00%

Expected Cash-Flows