NEW YORK (TheStreet) -- Hanesbrands (HBI - Get Report) shares are up 6.1% to $79.99 on Friday following the release of the company's first quarter earnings report.
The company raised full year 2014 financial guidance, increasing EPS estimates by 20 cents to between $4.80 and $5.00, and adjusted operating profit predictions up by $25 million to between $665 million and $685 million.
Adjusted earnings per share were 76 cents, a 49% year over year quarterly increase.
Hanesbrands reported a year over year quarterly net sales increase of 12% to $1.06 billion, missing analysts estimates of $1.35 billion.
TheStreet Ratings team rates HANESBRANDS INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate HANESBRANDS INC (HBI) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, notable return on equity, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to its closing price of one year ago, HBI's share price has jumped by 64.61%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, HBI should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- Despite its growing revenue, the company underperformed as compared with the industry average of 15.4%. Since the same quarter one year prior, revenues rose by 11.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Textiles, Apparel & Luxury Goods industry and the overall market, HANESBRANDS INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- Net operating cash flow has increased to $334.30 million or 39.58% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 9.92%.
- HANESBRANDS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, HANESBRANDS INC increased its bottom line by earning $3.25 versus $2.31 in the prior year. This year, the market expects an improvement in earnings ($4.72 versus $3.25).
- You can view the full analysis from the report here: HBI Ratings Report