Hanesbrands Inc. has responded to activist investor Barington Capital’s recent push for change within the company. In a statement, HanesBrands reiterated its commitment to delivering “sustainable value creation for shareholders.” However, Barington Capital expressed concerns about the decline in the company’s stock value over the past year, attributing it to Hanesbrands’ ineffective response to market challenges, poor operating performance, and excessive debt.
Barington has urged Hanesbrands to take immediate action by cutting expenses by at least $300 million annually, reducing inventories to less than 170 days outstanding by the end of the year, and improving gross margins through further facility consolidation. The Wall Street Journal previously reported on Barington’s call for change.
HanesBrands’ board and management team have expressed confidence in their Full Potential plan, which they believe will unlock significant opportunities. They plan to discuss these initiatives further during their second-quarter 2023 earnings report later this week. However, the company remains open-minded about exploring additional paths to enhance performance and create more value.
Despite recent volatility, Hanesbrands’ stock showed signs of recovery, surging 2.7% to reach a five-month high during premarket trading. Over the past year, the stock has experienced a significant decline of 54.6%, while the S&P 500 index has seen a 9.1% increase.
Key Points:
- Hanesbrands Inc. responds to activist investor’s urging for change
- Barington Capital criticizes the company’s response to market challenges, poor performance, and debt
- Barington calls for expense reduction, decreased inventories, and improved gross margins
- Hanesbrands expresses confidence in its Full Potential plan but remains open-minded about additional strategies
- Despite recent decline, Hanesbrands’ stock shows signs of recovery
- Stock declined 54.6% over the past year, while the S&P 500 index gained 9.1%
