After posting strong top- and bottom-line results after the market closed on Wednesday, shares of Hanesbrands Inc. jumped 9 percent to $39.09 at midmorning trading.
The company reported a 13.6 percent earnings gain for the third quarter on sales buoyed by a strong performance in the company’s activewear business as well as innerwear sales that came in stronger than analysts expected. Results beat analyst consensus estimates, according to Thomson Reuters.
Ike Boruchow, senior analyst at Wells Fargo Securities, said in a research note this morning that Hanesbrands “did a lot to dispel investor fears with their [third-quarter earnings-per-share] beat and raised fiscal year [guidance].”
“Specifically, the innerwear category increased plus 3 percent (well above our plus 0.5 percent estimate), primarily driven by a material inflection in the intimates business,” the analyst said, adding that he views the company’s “top-line beat as a key driver to move shares higher, as the ‘bear thesis’ on the name year-to-date had been predicated on their inability to grow organic sales — specifically within their intimates category.”
From here, Boruchow sees Hanesbrands having “significant upside potential through acquisition synergies potentially in 2016.” He has the company pegged with an “outperform” rating.