Why Hanesbrands Stock Dove by 8% on Thursday

A double miss on its latest set of earnings put Hanesbrands (HBI 0.22%) stock in the investor doghouse on Thursday. Compounding that, the storied apparel maker's guidance didn't meet analyst expectations for guidance either. The market expressed its disapproval by collectively trading the stock down by more than 8% on Thursday. This occurred on a day when the S&P 500 index closed in positive territory by 0.6%.

Top- and bottom-line slides in the fourth quarter

Hanesbrands unveiled its fourth-quarter and full-year 2023 results before market open. These revealed that the company's net sales for the quarter were slightly under $1.3 billion for the period, which was down by 12% on a year-over-year basis. Non-GAAP (adjusted) income from continuing operations fell more steeply, to $12 million ($0.03 per share) from the fourth quarter of 2022's $24 million.

Both figures fell short of analyst estimates. On average, these were $1.36 billion on the top line and $0.09 per share for adjusted income from continuing operations.

In its earnings release, Hanesbrands quoted CEO Steve Bratspies saying that the quarter's "performance did not meet our expectations as the sales environment proved to be more challenging than expected."

Sounding a positive note for the coming months, he added:

However, we saw several positive indicators that give us confidence margins and leverage have reached a positive inflection point and demonstrate progress on our strategy to simplify our business, reduce inventory, cut costs, and reignite innerwear.

Full-year guidance missed analyst projections

Yet Hanesbrands' full-year 2024 guidance calls for a decline in net sales. It believes it will earn $5.35 billion to $5.47 billion for the former line item. However, analysts are collectively estimating $5.6 billion. Adjusted income from continuing operations should be $0.42 to $0.48 per share; the consensus pundit expectation is $0.43.

For full-year 2023, Hanesbrands' net sales were over $5.6 billion, and its per-share adjusted income from continuing operations was $0.06.