Hanesbrands Issues Preliminary Q1 Results, 2017 View Intact
Zacks Investment Research | Apr 12, 2017 10:10PM ET
Hanesbrands Inc. (NYSE:HBI) came up with the first-quarter 2017 preliminary results and reiterated its projection for the full year, which was initially issued in Feb 2017. The company is scheduled to report first-quarter results on May 2. Shares of the company inched up 1.3% following the announcement.
Hanesbrands anticipates its first-quarter net sales of roughly $1.38 billion, up from $1.22 billion in the prior-year quarter. Also, the Zacks Consensus Estimate for the same is in line with the company’s guidance range. Further, it projects adjusted earnings (excluding actions) in the band of 28–29 cents per share versus 27–29 cents, guided earlier. The company reported 26 cents in first-quarter 2016. In addition, the Zacks Consensus Estimate of 28 cents is within its projection.
Its GAAP earnings from continuing operations for the said quarter are estimated in the range of 19–20 cents per share, compared with the previous guidance range of 21–24 cents. Currently, its GAAP earnings are down from 21 cents posted in the year-ago period. However, management 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.
Hanesbrands reiterated its guidance for 2017 and expects 2017 as the fifth straight year to witness record net sales, earnings and operating profit. It continues to anticipate earnings to be in the range of $1.93–$2.03, up from $1.85 recorded in 2016. The Zacks Consensus Estimate of $1.97 is within the company’s guidance range. Its GAAP earnings are also projected in the band of $1.70 to $1.82, which is up from $1.40 delivered in the prior year.
For 2017, net sales are expected to be in the range of $6.45–$6.55 billion, up from $6.03 billion reported in 2016. In addition, the company’s sales guidance includes anticipated incremental sales from acquisitions of nearly $420–$430 million. Moreover, the Zacks Consensus Estimate of $6.48 billion is within the company’s guidance range. Its adjusted operating profit is projected to be in the range of $935–$975 million. Further, management continues to forecast GAAP operating profit in $845–$895 million range. Notably, the company will record the second year of net cash from operations, which is expected in the band of $625–$725 million.
Concurrently, Hanesbrands announced that its Chief Financial Officer, Richard D. Moss, who has served for about 11 years, is all set to retire at the end of this year. Moss, who is responsible for all the company’s financial responsibilities, will continue to remain focused on supporting company’s strategies, till the company finds its successor.
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We note that Hanesbrands has been grappling with headwinds of late. The company's sales have 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. Further, limited international exposure and deep focus on premium brands remain concerns for the company.
In fact, this Zacks Rank #4 (Sell) stock has considerably underperformed the Zacks categorized Zacks Investment Research
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