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Hanesbrands (HBI) Gears Up to Post Q2 Earnings: What in Store?

Hanesbrands Inc. HBI is likely to register a decline in the top and the bottom line when it reports second-quarter 2021 numbers on Aug 5.

The Zacks Consensus Estimate for quarterly earnings, which has remained unchanged in the past 30 days at 39 cents per share, suggests a slump of 35% from the year-ago quarter’s reported figure. The designer, manufacturer and seller of apparel has outperformed the Zacks Consensus Estimate by 50% in the last reported quarter and by a significant margin in the trailing four quarters, on average.

The Zacks Consensus Estimate for second-quarter revenues is pegged at $1.6 billion, which suggests a decline of 7% from the figure reported in the prior-year quarter.

Hanesbrands Inc. Price and EPS Surprise

Hanesbrands Inc. Price and EPS Surprise
Hanesbrands Inc. Price and EPS Surprise

Hanesbrands Inc. price-eps-surprise | Hanesbrands Inc. Quote

Things To Note

During Hanesbrands’ last earnings call, management highlighted that it expects year-over-year decline in adjusted operating margin in the second quarter. Management expects adjusted operating profit in the range of $200-$210 million. At the midpoint, this indicates an operating margin of 13% compared with 15.2% in the year-ago quarter. Inflation and higher brand investment are likely to have affected operating margin in the quarter to be reported.

Hanesbrands’ Activewear segment has been bearing the brunt of pandemic-led hurdles. Notably, the sports and college licensing business is seeing softness thanks to campus shutdowns and restrictions on sports attendance amid the pandemic. We believe that persistence of the trend is likely to have affected the company’s performance in the second quarter.

That being said, the company is focused on making incremental investments in its online business to keep pace with consumers’ evolving shopping patterns. Also, strength in Hanesbrands’ Full Potential plan bodes well. For the second quarter, net sales are anticipated in the range of $1.56-$1.59 billion. The midpoint of the guidance suggests net sales increase of nearly 2% year over year and includes an expected gain of nearly $35 million from favorable currency movements. Excluding PPE, net sales at the midpoint are likely to have surged 69%. Also, adjusted earnings per share are envisioned in the band of 37-40 cents for the to-be-reported quarter.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Hanesbrands this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Hanesbrands currently carries a Zacks Rank #3 and has an Earnings ESP of 0.00%.

Some Stocks With Favorable Combinations

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat in the to-be-reported quarter.

Gildan Activewear Inc. GIL currently has an Earnings ESP of +1.41% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Callaway Golf Company ELY currently has an Earnings ESP of +900.00% and carries a Zacks Rank #3.

Under Armour, Inc. UAA currently has an Earnings ESP of +35.38% and a Zacks Rank of 3.


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Hanesbrands Inc. (HBI) : Free Stock Analysis Report

Gildan Activewear, Inc. (GIL) : Free Stock Analysis Report

Callaway Golf Company (ELY) : Free Stock Analysis Report

Under Armour, Inc. (UAA) : Free Stock Analysis Report

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