Innerware manufacturer HanesBrands (NYSE:HBI) has to contend with fierce competition, powerful retailers, and a balance sheet that is far less than ideal. Although apparel manufacturing is going to remain a tough business for the foreseeable future and HanesBrands doesn't look cheap by conventional metrics, investors who look no further than the P/E or EV/EBITDA ratios may miss an interesting free cash flow expansion story in its early stages.
A Tough Quarter
For a variety of reasons, HanesBrands delivered another poor quarter. Sales were slightly negative, as the company had to deal with retailers clearing out cold weather inventories, aggressive competition in graphic tees and some turbulence with Wal-Mart (NYSE:WMT). At the same time, higher cotton prices thumped margins (gross margin down more than a point) and operating income fell about 8%.
Please click here for more:
http://stocks.investopedia.com/stock-analysis/2012/Hanesbrands-May-Soon-Start-Stretching-Out-Its-Free-Cash-Flow-HBI-MFB-KSS-WRC0228.aspx
No comments:
Post a Comment