HanesBrands' 2023 Outlook Still Has Plenty Of Risks To Watch, Credit Suisse Says

Credit Suisse analyst Michael Binetti has reiterated a Neutral rating on the shares of HanesBrands Inc HBI with a price target of $7.
The analyst is encouraged by 4Q sales revised to now be slightly above the high end of prior guidance. The analyst thinks trends were similar, at down mid-teens% Y/Y for both Innerwear and Activewear.
That said, the analyst would've expected some EBIT upside on better sales, and EBIT dollars were only revised to the midpoint of the prior range ($70 million - $100 million).
The analyst believes the catalyst for the prerelease was the CFO departure during quiet period, and HBI wanting to reassure that near-term trends were tracking to guidance.
At some point, U.S. mass/dept stores will have to start to replenish, which could happen fast, potentially by 2Q23, said the analyst.
The analyst said by 2H23, HBI will be benefitting from lapping -150 basis points of 2H22 manufacturing pause deleverage, lapping -400 basis points of 2H22 Freight/Commodities, a massive 40% SKU reduction, consolidation around its most efficient DCs and lapping 2H retailer destocking of national brands and replenishment categories.
HBI notes that it has a line of sight to GM's back to at/above pre-COVID levels, and the analyst doesn't see why this supply chain will be impaired beyond the current destocking period.
Price Action: HBI shares are trading higher by 2.94% at $8.23 on the last check Monday.
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