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Hanesbrands Up More Than 30% in Three Months: Here's Why

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Hanesbrands Inc. (HBI - Free Report) looks well placed on the back of robust personal protective gear business amid the coronavirus outbreak. The company is benefiting from its strong online business. Also, its Project Booster Program bodes well. Notably, shares of the company have surged 30.3% in the past three months compared with the industry’s growth of 11.3%.

Let’s delve deeper.

What’s Driving Hanesbrands’ Growth?

Hanesbrands developed a product line of personal protective garments amid the pandemic. The newly-floated business resonates well with the commercial and consumer demand in the present environment. Notably, the company has sold about $752 million of personal-protection garments worldwide during the second quarter of 2020, which is well ahead of expectations.

The company is selling face masks to customers globally under Hanes, Champion, Bonds and Dim brand names. Going ahead, Hanesbrands expects to sell more than $150 million of protective garments in the second half of 2020, mostly in the third quarter. Clearly, the newly-floated protective garments business signifies an ongoing growth opportunity.


 

As consumers are increasingly resorting to online shopping, Hanesbrands continues to focus on developing its online sales. In second-quarter 2020, the company registered global online sales growth of more than 70% via the e-commerce websites, retailer websites, large internet pure-plays and business-to-business customers on a rebased year-over-year comparison. Hanesbrands, which is global partner with Amazon (AMZN - Free Report) , is focused on making incremental investments in its online business to keep pace with consumers’ evolving shopping patterns.

Apart from these, Hanesbrands launched a multi-year program in first-quarter 2017 to drive investment for growth, minimize costs as well as increase cash flow. This program, which is well-positioned for the next five years, aims to boost the company’s Sell More, Spend Less, Generate Cash strategy for additional gains, mainly from the global commercial and supply chain scale through acquisitions. Furthermore, the Project Booster cost savings along with other cash flow drivers like synergies from buyouts and diversified revenues bode well.

All these upsides are likely to help this Zacks Rank #1 (Strong Buy) company stay in investors’ good books.

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