Report
David Swartz
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Strong Brands Provide Hanesbrands With a Narrow Moat, but Expect Short-Term Challenges to Persist

We view narrow-moat Hanesbrands as attractive despite weak third-quarter results. Investors were disappointed by soft sales of U.S. innerwear, higher input costs, and a few one-time issues. Hanesbrands blamed some of the third-quarter weakness on timing issues (just-in-time ordering). Year-over-year innerwear sales declined 6.9% versus our expectation of a modest 2% drop. Much of the underperformance came from socks and women’s intimates (sales down 14% year over year) as men’s underwear sales g...
Underlying
Hanesbrands Inc.

Hanesbrands is a marketer of basic innerwear and activewear apparel in the Americas, Europe, Australia and Asia/Pacific under some apparel brands, including Hanes, Champion, Bonds, DIM, Maidenform, Bali, Playtex, Lovable, Bras N Things, Nur Die/Nur Der, Alternative, L'eggs, JMS/Just My Size, Wonderbra, and Gear for Sports. The company's segments are: Innerwear, which includes apparel products, such as men's underwear, women's panties, children's underwear, socks and intimate apparel; Activewear, which includes T-shirts, fleece, performance apparel, sport shirts and thermals; and International, which includes innerwear, activewear, hosiery and home goods products, sold outside of the United States.

Provider
Morningstar
Morningstar

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.

Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.

We have operations in 27 countries.

Analysts
David Swartz

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