Hanesbrands Inc. (NYSE:HBI) has amended its existing cooperation agreement with activist investor group Barington, extending the collaboration period until November 30, 2025. This extension, effective as of January 16, 2025, was announced in a recent SEC filing. The company's stock has shown remarkable momentum, delivering an 82% return over the past year according to InvestingPro data, though it currently trades above its Fair Value.
The original cooperation agreement, dating back to November 16, 2023, outlined the terms for board composition, advisory services, voting, and standstill agreements between the apparel company and Barington. The amendment also modifies the timeframe during which Barington's advisory services can be terminated early, now set to begin after March 31, 2025. If Barington chooses to terminate its advisory services after this date, it will also result in the termination of the entire cooperation agreement. The company maintains a healthy liquidity position with a current ratio of 1.49, indicating sufficient assets to cover short-term obligations.
Barington has been providing Hanesbrands with advice on business, operations, strategic and financial matters, corporate governance, and board composition. This collaboration is part of the company's ongoing efforts to enhance its performance and value.
The specifics of the amendment are detailed in a document attached to the SEC filing, which serves as the source of this information. The financial terms and other related details of the agreement were not disclosed in the filing.
This extension indicates a continued relationship between Hanesbrands and Barington, with potential implications for the company's strategic direction and governance. The extension of the cooperation period suggests that both parties see value in continuing their collaborative efforts.
InvestingPro analysis reveals positive momentum in analyst sentiment, with 5 analysts revising earnings estimates upward for the upcoming period, suggesting potential improvements in company performance. Discover more insights and 12 additional ProTips with an InvestingPro subscription.
In other recent news, Hanesbrands has experienced several significant developments. UBS upgraded the company's stock from Neutral to Buy, citing a positive shift in business fundamentals that is expected to result in a 24% compound annual growth rate in earnings per share (EPS) over the next fiscal year. The firm also increased the price target for Hanesbrands to $11.00 from the previous $9.00.
Simultaneously, Stifel, another financial services firm, raised its price target for Hanesbrands to $8.00 while maintaining a Hold rating on the stock. This adjustment followed Hanesbrands' third-quarter revenue and EPS outperforming estimates. Hanesbrands reported an adjusted EPS of $0.15, surpassing both Wall Street's prediction of $0.12 and the $0.11 estimate from Stifel.
The company's recent financial performance has been bolstered by successful debt reduction strategies, including the sale of the Champion brand and a substantial debt repayment in October. This resulted in a decrease in Hanesbrands' net debt to $2.0 billion. The company aims to reach a sub-3x net leverage range by 2026, supported by profitability improvements.
Furthermore, Hanesbrands' fiscal year 2024 guidance projects revenues to hover around $3.61 billion, with an improved adjusted EPS outlook of $0.39. Despite a slight decrease in Q3 net sales due to the divestiture of its hosiery business and foreign exchange headwinds, Hanesbrands exceeded its profitability guidance. The company expects Q4 net sales to reach around $900 million, a 3% year-over-year increase, and projects an operating profit of approximately $115 million.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.