Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Apparel retailer, Hanesbrands Inc. (HBI - Analyst Report), has completed the takeover of the underwear apparel chain, Maidenform Brands Inc., for approximately $583 million. The buyout is in accordance with Hanesbrands’ acquisition strategy.

The acquisition was funded with cash and cash equivalents and short-term borrowings through revolving credit facilities. The revolving credit facilities are expected to be retired through Hanesbrands’ free cash flow.

Maidenform sells intimate apparel, which forms a core category of Hanesbrands. The average-figure bra business of Maidenform targeting younger buyers complements Hanesbrands’ full-figure bra business targeting older women. Moreover, Maidenform’s popular shapewear category fits in very well with Hanesbrands’ established panty business.

The acquisition brings Maidenform’s popular brands like Flexees, Lilyette, Self Expressions and Sweet Nothings and Hanebrands’ market leading brands like Playtex, Bali, Just My Size, Hanes, Barely There, Wonderbra, Champion and L’eggs under one banner.

However, the international operations of the two companies are limited and overlap only in Canada and Mexico. Both the companies have small businesses in Europe. Post the takeover, Hanesbrands plans to expand the Maidenform brands across the untapped Asian markets.

The Maidenform acquisition will augment Hanesbrands’ existing portfolio and allow it to offer tough competition to the likes of  L Brands Inc.’s Victoria’s Secret, going forward.

The acquisition is expected to be accretive to Hanesbrands’ earnings in the first 12 months. Moreover, it is expected to generate additional revenues of $500 million, 60 cents in earnings per share, $80 million of operating profit and $65 million of free cash flow.

We believe that the acquisition synergy and the company’s endeavor to innovate continuously will keep Hanesbrands competitively ahead of its peers.

Currently, Hanesbrands has a Zacks Rank #3 (Hold). Investors should consider also stocks such as Michael Kors Holdings Ltd (KORS - Analyst Report) and G-III Apparel Group Ltd (GIII - Snapshot Report), all carrying a Zacks Rank #1 (Strong Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
LAKE SHORE G LSG 0.77 +6.05%
SKECHERS USA SKX 38.53 +4.50%
QUESTCOR PHA QCOR 80.07 +2.47%
VIPSHOP HOLD VIPS 156.35 +1.82%
ENLINK MIDST ENLC 36.29 +1.60%