Why is Hanesbrands so Cheap?

People will need underwear (even more) post-pandemic.

Andrew Willis 5 November, 2021 | 4:28AM
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Andrew Willis: With everyone starting to go outside more often as restrictions lift, there may be more demand for clothing to cover up with (and move around in) as we return to sports and active life.

Hanesbrands, the owner of brands such as Champion and of course, Hanes, has the market covered when it comes to both innerwear and activewear. Equity analyst David Swartz says Hanesbrands is the market leader when it comes to basic innerwear, with nearly 70% of 2020 sales in multiple countries.

Meanwhile, investors have been keeping this stock cheap with debt concerns and instability in the innerwear space, especially with retail stores closed. But we think the company is in better shape than many competitors to face disruption, and their debt should be reduced significantly over the new few years.

Lastly in 2021 and beyond we expect increased ‘casualization’  in fashion, which could drive demand for inner and activewear as the lines blur between formal and…work from home.

For Morningstar, Andrew Willis.


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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Hanesbrands Inc5.16 USD0.58Rating

About Author

Andrew Willis

Andrew Willis  is Senior Editor at Morningstar Canada. He previously produced content for Fidelity Investments and finance industry events for Euromoney Institutional Investor and has written in the past for Thomson Reuters and CNN. Follow him on Twitter @Andrew_M_Willis.

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