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Hanesbrands stock falls after weak guidance

Yahoo Finance Live examines Hanesbrands shares following losing dividends and consumer pivots away from the innerwear staple.

Video transcript


SEANA SMITH: It's time for our Triple Play, three stocks that were watching in the final 30 minutes. We've got Hanesbrands, Penn Entertainment, and GM. My pick, Hanesbrands, the t-shirt, underwear company. I'm sure you're familiar with it. Well Look, at that, shares are plunging today nearly 30%, the biggest selloff that we've seen in this name in about 15 years.

This comes after eliminating its quarterly dividend, also issuing weak guidance, the company warning about consumer spending and expected demand to be muted, given that macroeconomic uncertainty for the fourth quarter. Sales fell about 16% as retailers cut orders due to inventory positions.

Obviously, a tough environment out here for Hanesbrands. They've still got one fan over there, Dave, who, if you saw me laughing during it, it was because he was slowly unbuttoning his shirt to show off his Hanesbrands T-shirt.

- Is it even a Hanes shirt, Dave?

DAVE BRIGGS: This is a Hanes shirt.

- It is a Hanes shirt.

DAVE BRIGGS: This is a Hanes shirt, V-neck, love the Hanes. Probably have about 30 of them. I've got to recycle them like every week because I sweat lots. Anyway, let's move on.

- Well, Dave, I had asked you-- I had asked you earlier though. And it was interesting because you didn't know if it was a Hanes shirt.


- I feel like a lot of people--

SEANA SMITH: Do you wear them?

- I don't wear Hanes. I wear Amazon, which I was going to bring up as maybe a reason why Hanes has been struggling to some extent.


DAVE BRIGGS: I have now switched because he told me Amazon made T-shirts. So now I'm in.

SEANA SMITH: Well, you guys are ditching Hanes. This is part of the problem. It's why the stock might be off 30% today.

- Yeah, it was something that I had been looking at though. When you look at Hanes' performance quarter over quarter, right, this has been a consistent performance, consistent drop. You look at their gross margins. You go back to Q21-- 2021, they had gross margins of 40%. That's down to 34% now. So they really are getting squeezed when we talk about the business. And you take a look at that year chart there, down almost-- or more than 60% over the last year, guys.