Hanes Faces Challenges: HBI Stock Forecast and Market Outlook

As times get tough in the innerwear and activewear market, the HBI stock price is undergoing changes. Listed under the ticker HBI in the Consumer Discretionary sector, Hanesbrands Inc. has a market capitalisation of 2.24 billion, classifying it as a mid-cap stock. If you’re considering purchasing shares, you’ll need a securities account, either through your bank or with a specialised broker. Before making your investment decision, it’s important to review the current HBI stock price, its forecast, and the latest news.

HBI Stock Price Today

Hanesbrands Inc. stock is trading at $5.96 at the last close. The company’s stock price has fluctuated between a low of $3.54 and a high of $6.77 over the past 52 weeks. 

Hanesbrands Inc. has paid dividends consistently for the past nine years. However, there has been no recent announcement regarding the next dividend release, and the company is not currently paying any dividends.

The company decided to eliminate its dividend completely, which will free up cash and reduce debt. For long-term financial health, eliminating dividend is the right choice. Hanesbrands needs all the cash it can get its hands on to bring its debt levels and interest payments down.

The company experienced a 16% sales decline in Q4 due to reduced consumer spending and retailer inventory cuts. 

All segments suffered, with underwear down 19% and activewear down 16%. Operating margins went down because sales were lower and costs were higher. This led to a big net loss. However, adjusted earnings per share were $0.07. 

The company anticipates continued weak demand in 2023, projecting lower full-year sales and profits compared to 2022.

HBI’s price prediction target is set at $5.14. The highest price target for HBI stock is $6.40. The lowest would be at $5.00. 

HBI/USD 5-Day Chart

Key Facts to Remember About Hanes Stock

The current market scenario for underwear is challenging; however, as is typical for this category, the demand for replenishing products is expected to rise as consumers seek to replace worn items. 

Hanes has established a slight competitive advantage through its strong brand equity, reflected in a 60% market share in various regions. 

HanesBrands has also prioritised a premium market stance by purchasing Champion, but the most significant growth potential may lie in enhancing the efficiency of its primary loungewear division.

How do you get competitive in the basic underwear sector? That’s the question HanesBrands investors are asking as their “replenishment” apparel faces more gimmicky private label offerings.

Investors may sell as competition heats up. But experts remind that while the threat of private label apparel is often a risk to HanesBrands, it’s not new and shouldn’t affect the company’s competitiveness.

Will Hanes Remain the King of Underwear?

To boost growth, HanesBrands bought Champion introducing premium items like “X-temp” underwear. However, inflation and lower demand for clothing may hurt these products. Hanes could get back to basics by maintaining its leadership position in the underwear market, working to improve supply chain efficiency and eventually, people will need to restock their sock drawers.

Champion is a competitor in a growing activewear space, but competition is fierce. The brand is popular in North America and Europe. It has a lot of potential for growth in China and other less explored markets.

Hanesbrands has successfully introduced brand extensions that have allowed it to expand shelf space and increase price points in the typically static core apparel category.

HBI Stock, Buy or Sell?

The company has attracted interest from an activist shareholder. We believe there may be an opportunity to create value through more aggressive cost cutting and other changes.

Hanes has lost market share in the competitive women’s underwear market. The cause could be struggling US department stores.

Also, Hanes sells large quantities of basic clothing at relatively low prices. It may be difficult for the company to pass on any increase in input costs to consumers through higher prices. In addition, consumers may reduce their total spending on clothing for economic reasons.

Despite the challenges, Hanesbrands Inc.’s strong brand presence and strategic focus on premium markets, along with potential improvements in supply chain efficiency, could position the company for a gradual recovery as consumer demand rebounds.