--- title: "Is Hanesbrands (NYSE:HBI) A Risky Investment?" description: "Hanesbrands (NYSE:HBI) faces risks due to its significant debt, totaling $2.35 billion, with net debt at $2.17 billion after accounting for cash. The company's liabilities exceed its cash and receivab" type: "news" locale: "en" url: "https://longbridge.com/en/news/251339304.md" published_at: "2025-08-03T12:35:33.000Z" --- # Is Hanesbrands (NYSE:HBI) A Risky Investment? > Hanesbrands (NYSE:HBI) faces risks due to its significant debt, totaling $2.35 billion, with net debt at $2.17 billion after accounting for cash. The company's liabilities exceed its cash and receivables by $3.26 billion, indicating potential financial strain. Despite a low interest cover ratio of 2.3, Hanesbrands has shown a 58% increase in EBIT, suggesting resilience. However, only 26% of EBIT has converted to free cash flow, complicating debt management. Overall, while the debt situation is concerning, the growth in EBIT offers some optimism for shareholders. Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of permanent loss is the risk I worry about... and every practical investor I know worries about.' So it seems the smart money knows that debt - which is usually involved in bankruptcies - is a very important factor, when you assess how risky a company is. We note that **Hanesbrands Inc.** (NYSE:HBI) does have debt on its balance sheet. But should shareholders be worried about its use of debt? AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. ## When Is Debt A Problem? Debt and other liabilities become risky for a business when it cannot easily fulfill those obligations, either with free cash flow or by raising capital at an attractive price. Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers. However, a more usual (but still expensive) situation is where a company must dilute shareholders at a cheap share price simply to get debt under control. Of course, the upside of debt is that it often represents cheap capital, especially when it replaces dilution in a company with the ability to reinvest at high rates of return. When we examine debt levels, we first consider both cash and debt levels, together. ## What Is Hanesbrands's Net Debt? You can click the graphic below for the historical numbers, but it shows that Hanesbrands had US$2.35b of debt in March 2025, down from US$3.30b, one year before. However, it does have US$175.9m in cash offsetting this, leading to net debt of about US$2.17b. ## A Look At Hanesbrands' Liabilities We can see from the most recent balance sheet that Hanesbrands had liabilities of US$1.11b falling due within a year, and liabilities of US$2.67b due beyond that. Offsetting this, it had US$175.9m in cash and US$342.1m in receivables that were due within 12 months. So its liabilities outweigh the sum of its cash and (near-term) receivables by US$3.26b. The deficiency here weighs heavily on the US$1.44b company itself, as if a child were struggling under the weight of an enormous back-pack full of books, his sports gear, and a trumpet. So we'd watch its balance sheet closely, without a doubt. At the end of the day, Hanesbrands would probably need a major re-capitalization if its creditors were to demand repayment. Check out our latest analysis for Hanesbrands We measure a company's debt load relative to its earnings power by looking at its net debt divided by its earnings before interest, tax, depreciation, and amortization (EBITDA) and by calculating how easily its earnings before interest and tax (EBIT) cover its interest expense (interest cover). The advantage of this approach is that we take into account both the absolute quantum of debt (with net debt to EBITDA) and the actual interest expenses associated with that debt (with its interest cover ratio). While we wouldn't worry about Hanesbrands's net debt to EBITDA ratio of 4.4, we think its super-low interest cover of 2.3 times is a sign of high leverage. So shareholders should probably be aware that interest expenses appear to have really impacted the business lately. Looking on the bright side, Hanesbrands boosted its EBIT by a silky 58% in the last year. Like a mother's loving embrace of a newborn that sort of growth builds resilience, putting the company in a stronger position to manage its debt. When analysing debt levels, the balance sheet is the obvious place to start. But ultimately the future profitability of the business will decide if Hanesbrands can strengthen its balance sheet over time. So if you want to see what the professionals think, you might find this free report on analyst profit forecasts to be interesting. Finally, a business needs free cash flow to pay off debt; accounting profits just don't cut it. So we always check how much of that EBIT is translated into free cash flow. In the last three years, Hanesbrands's free cash flow amounted to 26% of its EBIT, less than we'd expect. That weak cash conversion makes it more difficult to handle indebtedness. ## Our View We'd go so far as to say Hanesbrands's level of total liabilities was disappointing. But on the bright side, its EBIT growth rate is a good sign, and makes us more optimistic. Looking at the bigger picture, it seems clear to us that Hanesbrands's use of debt is creating risks for the company. If all goes well, that should boost returns, but on the flip side, the risk of permanent capital loss is elevated by the debt. The balance sheet is clearly the area to focus on when you are analysing debt. However, not all investment risk resides within the balance sheet - far from it. For example - Hanesbrands has **1 warning sign** we think you should be aware of. Of course, if you're the type of investor who prefers buying stocks without the burden of debt, then don't hesitate to discover our exclusive list of net cash growth stocks, today. ### Related Stocks - [HBI.US - Hanesbrands](https://longbridge.com/en/quote/HBI.US.md) ## Related News & Research | Title | Description | URL | |-------|-------------|-----| | 吉爾丹在其 2024 年氣候變化披露中保持了 A - CDP 排名 | Gildan 在 2024 年 CDP 氣候變化披露中保持了 A-的評級，這標誌着其連續第六次被納入領導級別。該公司因其在範圍 3 排放和治理方面的表現而受到認可。在收購了同樣獲得 A 評分的 HanesBrands 後，Gildan 旨在 | [Link](https://longbridge.com/en/news/274697946.md) | | 拳擊 - 弗洛伊德·梅威瑟將再次復出 | 弗洛伊德·梅威瑟，這位前多級別世界拳擊冠軍，宣佈將結束近十年的退役，進行他的首場正式比賽，推廣方為 CSI Sports/Fight Sports。在此之前，他將與邁克·泰森進行一場表演賽，具體細節尚待確認。梅威瑟曾三次退役，他聲稱自己仍然 | [Link](https://longbridge.com/en/news/276504029.md) | | 08:31 ET 西德克薩斯的冠軍安哥拉牧場近百年來首次掛牌出售 | 位於德克薩斯州西部的冠軍安哥拉牧場首次上市，售價為 9,760,000 美元。該牧場佔地 4,795 英畝，擁有歷史悠久的卡薩皮埃德拉大廈，這是一座 7,000 平方英尺的維多利亞風格住宅。曾經是一個著名的安哥拉山羊養殖帝國的總部，該物業現 | [Link](https://longbridge.com/en/news/276338535.md) | | 綜合格鬥 - 羅西將在十年後重返 MMA，與卡拉諾展開對決 | 前 UFC 冠軍羅達·勞西將在十年後重返 MMA，宣佈將於 5 月 16 日與吉娜·卡拉諾對戰，主辦方為 Most Valuable Promotions。這場羽量級比賽將在 Netflix 上直播，並將在洛杉磯的 Intuit Dome | [Link](https://longbridge.com/en/news/276145814.md) | | 更正和替換：FREOPP 將在自由與進步會議上授予國會議員 Virginia Foxx 弗雷德裏克·道格拉斯獎 | FREOPP 將在 2025 年 11 月 20 日在華盛頓特區的自由與進步會議上授予國會議員弗吉尼亞·福克斯（Virginia Foxx）弗雷德裏克·道格拉斯獎（Frederick Douglass Award）。該獎項表彰她在促進所有美 | [Link](https://longbridge.com/en/news/276364845.md) | --- > **Disclaimer**: This article is for reference only and does not constitute any investment advice.