Hanesbrands, Inc. (HBI - Analyst Report) has been hot for the last 12 months, recently hitting a new multi-year high above $31 after reporting a 61% earnings surprise in late April. With a bullish next-year estimate calling for 21% earnings growth, the long-term picture looks good too.Company Description
Hanesbrands, Inc. is a consumer goods company that designs, manufactures and sells mens and womans under garments in the United States and internationally. The company sells its products through third-party distributors while operating 228 outlet stores and has a market cap of $2.73 billion.
Underwear and undershirts hardly conjure images of blistering gains in the stock market, but that's exactly what shareholders of HBI have experienced over the last year as shares of this industry leader have more than doubled on the economic rebound. The recent multi-year high at $31.45 came on the heels of the company's better than expected Q1 results from April 21 that included an awesome 61% earnings surprise.
First-Quarter Results
Revenue for the period was up 8.2% from last year to $928 million. Earnings also came in strong at 37 cents, 61% ahead of the Zacks Consensus Estimate, lifting the average earnings surprise to 26% over the last four quarters.
Hane's saw a strong performance from its Innerwear segment, led by a strong showing in mens underwear, contributing $33 million in sales growth and $28 million in operating profit.
Chairman and CEO Richard Noll was encouraged by the quarterly results and optimistic on the rest of the year, saying "We are off to a strong start to 2010 as a result of our investment in our brands and in our supply chain during the recession. We expect to maintain this momentum throughout 2010."
Estimates Rising
With a solid quarter in hand and an optimistic tone on 2010 from management, analysts have been quick to raise estimates. The current year is up 11 cents in the last 2 months to $2.28, while the next-year estimate is up 18 cents to $2.75, a bullish 21% growth projection.
Valuation
In spite of the recent gains, shares of HBI still have value, trading with a forward P/E multiples of 12.67X, a discount to the industry average of 14.29X.
2-Year Chart
Shares of HBI recently hit a new multi-year high on the great quarter before pulling back a bit on general market volatility. Look for support from the trend line on any more weakness, take a look below.
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