Stock Analysis & Valuation Hanesbrands Inc. (HN9.DE)

• Previous Close: €10.95
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, €	Upside, %
Artificial intelligence (AI)	n/a	n/a
Intrinsic value (DCF)		n/a
Graham-Dodd Method		n/a
Graham Formula	12.40	13

Strategic Investment Analysis

Company Overview

Hanesbrands Inc. (HN9.DE) is a leading global consumer goods company specializing in everyday basic innerwear and activewear apparel. Headquartered in Winston Salem, North Carolina, the company operates across the Americas, Europe, Australia, and Asia Pacific, employing 68,000 full-time workers. Hanesbrands operates through three key segments: Innerwear, Activewear, and International. The Innerwear segment includes intimate apparel, men's underwear, women's panties, children's underwear, socks, and hosiery. The Activewear segment leverages strong brands like Champion, Hanes, and JMS/Just My Size to compete in the growing athleisure market. The International segment spans both innerwear and activewear, reinforcing the company's global footprint. As a major player in the Apparel - Retail sector, Hanesbrands benefits from its vertically integrated supply chain, brand recognition, and diversified product portfolio. The company's focus on essential apparel categories provides resilience against economic downturns, while its activewear segment capitalizes on the booming demand for comfortable, performance-oriented clothing.

Investment Summary

Hanesbrands presents a mixed investment case. On the positive side, the company boasts strong brand equity, particularly with Champion and Hanes, and a vertically integrated supply chain that enhances cost efficiency. Its diversified product mix across innerwear and activewear provides stability, with innerwear being a recession-resistant category. However, the company carries a high debt load (€3.74 billion), which could constrain financial flexibility. The beta of 1.68 indicates higher volatility compared to the market, likely reflecting sensitivity to consumer spending trends. While the company generated €680 million in revenue and €521 million in net income for FY2021, investors should monitor its ability to manage debt and maintain margins amid inflationary pressures. The dividend yield (based on €1.35 per share) may appeal to income-focused investors, but sustainability depends on continued cash flow generation.

Competitive Analysis

Hanesbrands competes in the highly fragmented apparel retail sector, where it differentiates itself through brand strength, vertical integration, and a focus on essential apparel categories. The company's Champion brand gives it a strong position in the activewear market, competing with premium sportswear brands while maintaining broader accessibility. In innerwear, Hanesbrands benefits from long-standing consumer trust and shelf space in mass retail channels. However, the company faces intense competition from both value players and premium brands. Its vertically integrated manufacturing provides cost advantages but may limit agility compared to competitors relying on outsourced production. The international segment offers growth potential but exposes the company to currency fluctuations and geopolitical risks. Hanesbrands' scale allows for significant retail distribution, though it must continually invest in marketing to maintain brand relevance against digital-native competitors. The activewear segment's growth is promising but requires ongoing innovation to compete with specialized athletic brands. Overall, Hanesbrands' competitive position is solid in its core categories, but it must navigate the challenges of debt management and evolving consumer preferences.

Major Competitors

• PVH Corp. (PVH): PVH Corp. owns iconic brands like Calvin Klein and Tommy Hilfiger, competing with Hanesbrands in underwear and activewear segments. PVH has stronger premium brand positioning but lacks Hanesbrands' vertical integration. The company has greater international exposure, particularly in Europe and Asia, but faces higher fashion risk due to its emphasis on designer labels.
• Gildan Activewear Inc. (GIL): Gildan is a strong competitor in basic apparel manufacturing, with a focus on blank activewear and underwear sold through wholesale channels. The company has lower brand recognition than Hanesbrands but competes aggressively on price. Gildan's manufacturing efficiency rivals Hanesbrands', but it has less control over retail distribution and weaker consumer brand loyalty.
• Nike, Inc. (NKE): Nike dominates the premium activewear market, putting pressure on Hanesbrands' Champion brand. Nike's innovation, marketing power, and athlete endorsements create significant competitive barriers. However, Hanesbrands competes effectively in more affordable price segments and has stronger positioning in basic underwear categories where Nike is less focused.
• Under Armour, Inc. (UA): Under Armour competes directly with Hanesbrands' Champion line in performance activewear. While Under Armour has stronger technology and performance credentials, it has struggled with profitability. Hanesbrands benefits from more diversified product lines and better economies of scale in basic apparel manufacturing.
• L Brands, Inc. (LB): L Brands (now separated into Bath & Body Works and Victoria's Secret) competed with Hanesbrands in intimate apparel. Victoria's Secret had stronger brand cachet in women's lingerie but faced recent struggles with brand relevance. Hanesbrands maintains broader distribution and more affordable positioning in basics.