HanesBrands (HBI) Stock: Climbing On Strong Earnings


HanesBrands Inc. (NYSE: HBI) is having an incredibly strong start to the trading session this morning, and for good reason. The company reported its earnings for the fourth quarter, beating expectations and exciting investors. Today, we’ll talk about:

  • The earnings report;
  • what we’re seeing from HBI stock as a result; and
  • what we’ll be watching for ahead. 

HBI Is Climbing On Strong Results

As mentioned above, HanesBrands is having a great day in the market today after reporting its earnings for the fourth quarter. Here’s what we saw from the report:

  • Net Income – During the fourth quarter, HBI reported net income of $161.6 million. That proved to be positive as the company reported a loss in the same quarter the year before. 
  • Earnings Per Share – On a per-share basis, the company said that it generated earnings in the amount of $0.44. Once adjusted for costs relating to mergers and acquisitions, earnings came to $0.48 per share. This figure beat expectations with Wall Street expecting to see earnings of $0.47 per share. 
  • Revenue – Revenue fro the quarter came in at $1.77 billion. That figure also beat analyst expectations. Analyst were expecting that the company would generate revenue in the amount of $1.72 billion. 
  • Full Year – On a full year bsis, HBI generated revenue in the amount of $6.8 billion with profits of $553.1 milllion or $1.52 per share. 
  • Guidance – Finally, for the first quarter, the company is expecting to generate earnings per share in the range between $0.24 and $0.26. Revenue is expected to come in between $1.52 and $1.55 billion. On a full year basis, the company is expecting to produce earnings in the range between $1.72  and $1.80 per share on revenue between $6.89 and $6.99 billion. 

In a statement, Gerald W. Evans Jr. CEO at HBI, had the following to offer:

We had a strong fourth quarter with organic sales growth, margin expansion, double-digit operating profit growth, strong cash generation, and significant debt and leverage reduction.

Our diversification strategy is working. We had strong double-digit global Champion growth, International innerwear growth in Australia, Asia and the Americas, and increased sales for underwear and shapewear in the United States. Adjusted operating profit increased 10 percent, and adjusted operating margin increased 40 basis points. We generated record operating cash flow in the fourth quarter, and we paid down half a billion dollars of debt in the second half to reduce our leverage. Our outlook remains strong, including organic sales growth and significant cash flow growth expected in 2019, which underscores our progress toward achieving our long-term goals and enhancing value creation.

What We’re Seeing From The Stock 

One of the first lessons that we learn when we start to work in the market is that the news leads to moves. When it comes to HanesBrands, the news proved to be overwhelmingly positive. Not only did the company report strong earnings, revenue growth and guidance were also positive points. So, it’s not surprising to see that excited investors are pushing the stock up in the market today. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (11:04), HBI is trading at $18.32 per share after a gain of $2.75 per share or 17.66% thus far today. 

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What We’ll Be Watching For Ahead

Moving forward, the CNA Finance team will continue to keep a close eye on HBI. In particular, we’re interested in following the story surrounding the company’s continued work to expand sales, revenue and margins. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!

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