Back to top

Analyst Blog

Basic apparels provider HanesBrands Inc. (HBI - Analyst Report) recently raised its earnings expectation for full year 2013 in the range of $3.25 to $3.40 per share, from the previous low $3 range, following early repayment of long-term debt.

HanesBrands has repaid $250 million 8% Senior Notes due 2016, the repayment of which was earlier expected in December 2013. This has reduced the company’s long term debt to $1.25 billion and thereby its interest expenses.

The company now expects interest expense of approximately $120 million for full-year 2013. The company remains committed to prepay the remaining $250 million of 8% notes in 2013.

In addition, the company expects a pretax charge of approximately $34 million related to debt prepayment expenses and non-cash unamortized debt costs to impact fourth quarter 2012 results. The company also reiterated its sales and earnings guidance for the fourth quarter of 2012. Net sales are expected in the range of approximately $1.13 billion to $1.17 billion and earnings in the range of $1.00 to $1.06 per share.

For full-year 2012, HanesBrands affirmed its earnings guidance in the range of $2.54 to $2.60 per share. Net sales is expected in the range of approximately $4.6 billion to $4.7 billion and free cash flow in the range of $300 million to $400 million.

Hanesbrands, which released its third quarter 2012 results on October 25, posted earnings of $1.11, up 31% from the prior-year quarter, on strong sales. Earnings outpaced the Zacks Consensus Estimate of $1.05 per share. Quarterly revenues inched up 2.5% to $1.219 billion, driven by sales growth in both Innerwear and Outerwear segments. This was almost in line with the Zacks Consensus Estimate of $1.224 billion.

The Zacks Consensus Estimate for the fourth quarter and fiscal year 2012 is pegged at $1.03 and $2.58 per share, respectively.

The company has a strong balance sheet and intends to use its free cash flow to reduce long-term debt. Currently, Hanesbrands carries a Zacks #2 Rank (short-term Buy rating) whereas its peer Limited Brands Inc. carries a Zacks #3 Rank (short-term Hold rating).

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

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
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%