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What to Expect from Hanesbrands (HBI) this Earnings Season?
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Hanesbrands Inc. (HBI - Free Report) is slated to report first-quarter 2017 results on May 2. The question lingering in investors’ minds is whether this leading apparel retailer will be able to post a positive earnings surprise in the to-be-reported quarter. The company’s earnings have missed the Zacks Consensus Estimate in two of the past four quarters. However, it posted an average beat of 1.9% in the trailing four quarters.
Let’s delve deeper how things are shaping up for this announcement.
What Does the Zacks Model Unveil?
Our proven model does not show that Hanesbrands is likely to beat earnings estimates this quarter. This is because a stock needs to have both a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP for this to happen. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Hanesbrands has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 28 cents. Although the company’s Zacks Rank #3 increases the predictive power of ESP, we need a positive Earnings ESP in order to be confident about an earnings surprise.
Hanesbrands Inc. Price, Consensus and EPS Surprise
Hanesbrands anticipates its first-quarter net sales to be roughly $1.38 billion, up from $1.22 billion in the prior-year quarter. However, the Zacks Consensus Estimate for the same is currently pegged higher at $1.39 billion. Further, it projects adjusted earnings (excluding actions) in the band of 28–29 cents per share versus 27–29 cents. The guidance is higher than 26 cents reported in the year-ago quarter. Currently, the Zacks Consensus Estimate for the quarter is at the lower end of the company’s guidance range.
Meanwhile, its GAAP earnings from continuing operations for the to-be-reported quarter are estimated in the band of 19–20 cents per share compared with the previous guidance range of 21–24 cents. Management also looks forward to generate solid net cash from operations in the first quarter along with a modest utilization of cash in the $25–$50 million range.
Notably, Hanesbrands is armed with a robust brand portfolio, alongside undertaking strategic initiatives to boost profitability. Moreover, its e-commerce business growth and Innovate-to-Elevate strategy, which focuses on value-added, higher-priced and high-margin items, seem to be encouraging.
However, the company has been grappling with headwinds of late. Lower than expected traffic at its stores, limited international exposure and deep focus on premium brands remain potent concerns along with soft consumer spending environment. These factors have been weighing upon Hanesbrands’ sales that missed the Zacks Consensus Estimate in 11 of the past 12 quarters. Also, its earnings missed our estimate in fourth quarter 2016 after posting in-line results in the third quarter. Nonetheless, estimates have been stable ahead of the company’s first-quarter earnings release.
We note shares of Hanesbrands gained 1.8% year to date, outperforming the Zacks categorized Textile – Apparel Manufacturing industry’s decline of 6.5%.
Hanesbrands forms part of the Consumer Discretionary sector that is placed at top 44% of the Zacks Classified sectors (7 out of 16). Per the latest Earnings Preview, the earnings growth for the sector looks decent. While total earnings for the Consumer Discretionary sector are estimated to rise 3.6%, revenues are projected to improve 11.3%.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Carter's, Inc. (CRI - Free Report) has an Earnings ESP of +1.21% and a Zacks Rank #3.
Viacom, Inc. has an Earnings ESP of +3.39% and a Zacks Rank #3.
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What to Expect from Hanesbrands (HBI) this Earnings Season?
Hanesbrands Inc. (HBI - Free Report) is slated to report first-quarter 2017 results on May 2. The question lingering in investors’ minds is whether this leading apparel retailer will be able to post a positive earnings surprise in the to-be-reported quarter. The company’s earnings have missed the Zacks Consensus Estimate in two of the past four quarters. However, it posted an average beat of 1.9% in the trailing four quarters.
Let’s delve deeper how things are shaping up for this announcement.
What Does the Zacks Model Unveil?
Our proven model does not show that Hanesbrands is likely to beat earnings estimates this quarter. This is because a stock needs to have both a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP for this to happen. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Hanesbrands has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 28 cents. Although the company’s Zacks Rank #3 increases the predictive power of ESP, we need a positive Earnings ESP in order to be confident about an earnings surprise.
Hanesbrands Inc. Price, Consensus and EPS Surprise
Hanesbrands Inc. Price, Consensus and EPS Surprise | Hanesbrands Inc. Quote
Factors at Play
Hanesbrands anticipates its first-quarter net sales to be roughly $1.38 billion, up from $1.22 billion in the prior-year quarter. However, the Zacks Consensus Estimate for the same is currently pegged higher at $1.39 billion. Further, it projects adjusted earnings (excluding actions) in the band of 28–29 cents per share versus 27–29 cents. The guidance is higher than 26 cents reported in the year-ago quarter. Currently, the Zacks Consensus Estimate for the quarter is at the lower end of the company’s guidance range.
Meanwhile, its GAAP earnings from continuing operations for the to-be-reported quarter are estimated in the band of 19–20 cents per share compared with the previous guidance range of 21–24 cents. Management also looks forward to generate solid net cash from operations in the first quarter along with a modest utilization of cash in the $25–$50 million range.
Notably, Hanesbrands is armed with a robust brand portfolio, alongside undertaking strategic initiatives to boost profitability. Moreover, its e-commerce business growth and Innovate-to-Elevate strategy, which focuses on value-added, higher-priced and high-margin items, seem to be encouraging.
However, the company has been grappling with headwinds of late. Lower than expected traffic at its stores, limited international exposure and deep focus on premium brands remain potent concerns along with soft consumer spending environment. These factors have been weighing upon Hanesbrands’ sales that missed the Zacks Consensus Estimate in 11 of the past 12 quarters. Also, its earnings missed our estimate in fourth quarter 2016 after posting in-line results in the third quarter. Nonetheless, estimates have been stable ahead of the company’s first-quarter earnings release.
We note shares of Hanesbrands gained 1.8% year to date, outperforming the Zacks categorized Textile – Apparel Manufacturing industry’s decline of 6.5%.
Hanesbrands forms part of the Consumer Discretionary sector that is placed at top 44% of the Zacks Classified sectors (7 out of 16). Per the latest Earnings Preview, the earnings growth for the sector looks decent. While total earnings for the Consumer Discretionary sector are estimated to rise 3.6%, revenues are projected to improve 11.3%.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
AMC Networks Inc. (AMCX - Free Report) has an Earnings ESP of +1.02% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Carter's, Inc. (CRI - Free Report) has an Earnings ESP of +1.21% and a Zacks Rank #3.
Viacom, Inc. has an Earnings ESP of +3.39% and a Zacks Rank #3.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more. Click here for a peek at this private information >>