Hanesbrands Inc (HBI)
Interest coverage
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 288,782 | 253,020 | 328,502 | 406,352 | 519,545 | 614,776 | 707,978 | 778,118 | 797,728 | 245,655 | 200,096 | 184,835 | 42,666 | 682,588 | 760,572 | 788,039 | 889,730 | 890,438 | 879,424 | 869,062 |
| Interest expense (ttm) | US$ in thousands | 277,429 | 255,331 | 224,443 | 183,562 | 157,073 | 109,463 | 70,323 | 39,688 | 12,305 | 13,512 | 14,115 | 14,022 | 11,565 | 12,013 | 11,092 | 10,414 | 10,731 | 9,348 | 9,409 | 9,375 |
| Interest coverage | 1.04 | 0.99 | 1.46 | 2.21 | 3.31 | 5.62 | 10.07 | 19.61 | 64.83 | 18.18 | 14.18 | 13.18 | 3.69 | 56.82 | 68.57 | 75.67 | 82.91 | 95.25 | 93.47 | 92.70 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $288,782K ÷ $277,429K
= 1.04
The interest coverage ratio of Hanesbrands Inc has shown a decreasing trend over the recent quarters, indicating potential challenges in meeting its interest payment obligations. The ratio has decreased from a high level of 95.25 in December 2019 to 1.04 in December 2023. This significant decline indicates a weakening ability to cover interest expenses from operating income.
The sharp decline in interest coverage may raise concerns about the company's financial health and ability to service its debt effectively. A declining interest coverage ratio may signal increased financial risk, potentially leading to liquidity issues and difficulties in managing debt obligations.
It is important for investors and stakeholders to closely monitor Hanesbrands Inc's financial performance and leverage levels, as well as the company's strategies to improve its interest coverage and overall financial stability.