Hanesbrands Inc (HBI)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 160,838 | 178,453 | 206,124 | 340,117 | 312,624 | 255,359 | 316,532 | 437,430 | 594,327 | 765,536 | 849,646 | 892,536 | 913,138 | 244,376 | 210,125 | 222,702 | 93,097 | 801,339 | 838,642 | 837,381 |
| Interest expense (ttm) | US$ in thousands | 211,984 | 237,357 | 261,360 | 285,666 | 277,429 | 255,331 | 224,443 | 183,562 | 157,073 | 142,715 | 141,854 | 150,570 | 163,067 | 171,875 | 174,883 | 174,102 | 166,491 | 163,283 | 162,506 | 167,369 |
| Interest coverage | 0.76 | 0.75 | 0.79 | 1.19 | 1.13 | 1.00 | 1.41 | 2.38 | 3.78 | 5.36 | 5.99 | 5.93 | 5.60 | 1.42 | 1.20 | 1.28 | 0.56 | 4.91 | 5.16 | 5.00 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $160,838K ÷ $211,984K
= 0.76
Hanesbrands Inc's interest coverage ratio has fluctuated over the past few years, indicating varying levels of ability to cover its interest expenses with its operating income. The interest coverage ratio stood at a healthy level of around 5.00 to 5.99 from March 2020 to June 2022, suggesting that the company had sufficient earnings to meet its interest obligations comfortably.
However, there was a significant drop in the interest coverage ratio in the fourth quarter of 2022, plunging to 0.56. This sharp decline may raise concerns about the company's ability to cover its interest expenses with its operating income during that period.
Subsequently, the interest coverage ratio remained low from March 2023 to June 2024, ranging from 0.75 to 2.38. These lower ratios indicate that Hanesbrands Inc may have faced challenges in generating enough earnings to cover its interest payments efficiently during this period.
Overall, the trend in Hanesbrands Inc's interest coverage ratio highlights periods of both strength and weakness in its ability to service its debt obligations with its operating income. Investors and creditors may closely monitor this ratio to assess the company's financial stability and risk levels.