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Hanesbrands Inc. (HBI) is set to report fourth-quarter fiscal 2013 results on Jan 29. Last quarter, it posted a positive surprise of 7.8%. Let us see how things are shaping up for this announcement.
Factors to Be Considered This Quarter
Hanesbrands has been reporting decent earnings results for the past few quarters backed by the strategic initiative — Innovate-to-Elevate.
In spite of delivering mixed results in the third quarter, Hanesbrands upped its earnings and sales guidance for fourth-quarter fiscal 2013 on the back of opportunity to expand its margins in the coming quarter due to lower cotton costs and the Innovate-to-Elevate strategy, which focuses on high-margin products.
Hanesbrands raised the earnings per share guidance to a range of $3.75 to $3.85 from $3.50 to $3.65. Management expects the Maidenform acquisition contributed 10 cents to the earnings upside. The company expects operating profits between $580 million and $590 million for the year, higher than the previous range of $550 million to $575 million. Net sales are expected slightly above $4.6 billion compared with $4.55 billion in the year-ago period.
Earnings Whispers?
Our proven model does not conclusively show that Hanesbrands is likely to beat earnings this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 to surpass earnings estimate. However, that is not the case here due to the following factors:
Zacks ESP: ESP for Hanesbrands is 0.00%.
Zacks Rank #3 (Hold): Hanesbrands’ Zacks Rank when combined with a 0.00% ESP makes surprise prediction difficult.
We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Here are some other companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Columbia Sports Inc. (COLM), with Earnings ESP of +5.62% and a Zacks Rank #2 (Buy).
Micheal Kors Inc. (KORS), with Earnings ESP of +1.15% and a Zacks Rank #2.
Abercrombie & Fitch Co. (ANF), with Earnings ESP of +1.96% and a Zacks Rank #2.
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