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•GAAP and Adjusted operating margins for the quarter were 13.5% and 14.2%, respectively, an increase of 240 and 300 basis points, respectively, compared to prior year.

•GAAP earnings per share (EPS) of $0.13 and Adjusted EPS of $0.17.

WINSTON-SALEM, N.C. (February 13, 2025) – HanesBrands Inc. (NYSE: HBI), a global leader in iconic apparel brands, today announced results for fourth-quarter and full-year 2024.

“We delivered a strong quarter and full-year with results across all key metrics exceeding our expectations as the benefits of our transformation strategy are clearly working,” said Steve Bratspies, CEO. “We enter 2025 as a new Company. We are a more simplified, focused business with a powerful asset base and significant competitive advantages. We believe we are well positioned to build on fourth quarter’s momentum and deliver positive sales growth, additional margin expansion, strong cash generation and continued debt reduction, providing us multiple levers to create additional shareholder value in 2025 and beyond.”

Net Sales from continuing operations were $888 million.

•Net sales increased 4.5% compared to the prior year.

•On an organic constant currency basis, net sales increased 3.8% over prior year (Table 2-B).

Gross Profit and Gross Margin increased year-over-year driven by the benefits from accelerated cost savings initiatives and lower input costs.

•The Company continued its consolidation and other optimization actions in its supply chain to lower fixed cost, increase efficiencies, and further improve customer service and in-stocks with lower levels of inventory. The Company expects these actions to drive continued benefits in 2025.

•Gross Profit and Adjusted Gross Profit were $390 million and $392 million, respectively, an increase over prior year of 14% and 15%, respectively.

•Gross Margin and Adjusted Gross Margin increased 380 and 400 basis points, respectively, to 43.9% and 44.1%, respectively.

•Adjusted Gross Profit and Adjusted Gross Margin exclude certain costs related to restructuring and other action-related charges (Table 6-A).

Selling, General and Administrative (SG&A) Expenses, as a percentage of net sales, increased over prior year as planned, strategic increased brand investments drove a 125 basis point increase in SG&A, which was partially offset by benefits from cost savings initiatives and disciplined expense management.

•The Company continued its strategic actions to improve its processes and lower fixed cost and expects the savings from these actions to continue to build over the next several quarters.

•SG&A Expenses were $271 million, or 30.5% of net sales, which represents an increase over prior year of 9% and 140 basis points, respectively.

•Adjusted SG&A Expenses were $266 million, or 29.9% of net sales, which represents an increase of 8% and 100 basis points, respectively.

•Adjusted SG&A Expenses exclude certain costs related to restructuring and other action-related charges (Table 6-A).

Operating Profit and Operating Margin increased over prior year driven by gross margin improvement and SG&A savings initiatives, which supported a 125 basis point increase in brand investments.

•Operating Profit increased 27% to $120 million and Operating Margin increased 240 basis points to 13.5% as compared to prior year.

•Adjusted Operating Profit increased 33% to $126 million and Adjusted Operating Margin increased 300 basis points to 14.2% as compared to prior year.

•Adjusted Operating Profit and Adjusted Operating Margin exclude certain costs related to restructuring and other action-related charges (Table 6-A).

•Interest expense of $46 million decreased 13% compared to prior year driven by lower debt balances.

•Other expenses of $18 million included $9 million of an expected write-off of debt issuance costs related to debt pay down in the quarter. Adjusted Other expenses of $9 million increased $2 million over prior year (Table 6-A).

•Tax expense was $9 million as compared to a tax benefit of $(65) million in the prior year. Effective Tax Rate for fourth-quarter 2024 was 16.6%.

•Adjusted Tax Expense was $9 million as compared to $16 million in fourth-quarter 2023. Adjusted Tax Rate was 12.9% as compared to 46.3% last year (Table 6-A).

•The Company's effective tax rate for 2024 and 2023 is not reflective of the U.S. statutory rate due to valuation allowances against certain net deferred tax assets.

•Income from continuing operations totaled $46 million, or $0.13 per diluted share, in fourth-quarter 2024. This compares to income from continuing operations of $99 million, or $0.28 per diluted share, in fourth-quarter 2023.

•Adjusted Income from continuing operations totaled $61 million, or $0.17 per diluted share. This compares to adjusted income from continuing operations of $18 million, or $0.05 per diluted share, last year (Table 6-A).

See the Note on Adjusted Measures and Reconciliation to GAAP Measures later in this news release for additional discussion and details of actions, which include restructuring and other action-related charges.

•U.S. net sales increased 3% over prior year driven primarily by innerwear innovation, including Hanes Absolute Socks, Hanes Moves, Hanes Supersoft and Bali Breathe, as well as incremental holiday programming, and new category growth.

Operating margin of 23.1% increased approximately 525 basis points over prior year. The increase was driven primarily by the benefits from cost savings initiatives and lower input costs, which helped fund a 30% increase in brand investments to drive consumer demand behind new product innovation in both Men’s and Women’s.

•International net sales increased 2% on a reported basis, which included a $9 million headwind from unfavorable foreign exchange rates. International sales increased 6% on a constant currency basis compared to prior year as sales grew in Australia, the Americas, and Asia.

Operating margin of 12.6% decreased approximately 550 basis points compared to prior year driven primarily by transactional foreign exchange headwinds, business mix, and brand investments, which was partially offset by lower input costs and the benefits from cost savings initiatives.

•Total liquidity position at the end of fourth-quarter 2024 was more than $1.2 billion, consisting of $215 million of cash and equivalents and approximately $1.0 billion of available capacity under the Company’s credit facilities.

•Based on the calculation as defined in the Company’s senior secured credit facility, the Leverage Ratio at the end of fourth-quarter 2024 was 3.4 times on a net debt-to-adjusted EBITDA basis, which was below its fourth-quarter 2024 covenant of 6.38 times and below prior year’s 5.2 times (See Table 6-B). The Company paid down more than $1.0 billion of debt in 2024.

•Inventory at the end of fourth-quarter 2024 of $871 million decreased 9%, or $85 million, year-over-year. The year-over-year decrease was driven predominantly by the benefits of the Company’s inventory management capabilities, including SKU discipline and lifecycle management, lower input costs as the Company continued to anniversary the impact from peak inflation, and improving sales trends.

•Cash Flow from Operations for the full-year was $264 million as compared to $562 million last year. Free Cash Flow for the full-year was $226 million as compared to $518 million last year.

Announces Exit of Champion Japan License

At the time of closing for the sale of its global Champion business on September 30, 2024, the Company indicated it would continue to operate the Champion Japan business as a licensee for a temporary period of time until it was ultimately transitioned to Authentic Brands Group, in accordance with the terms of the definitive agreement. In the fourth-quarter 2024, the Company notified Authentic Brands Group of its plan to exit the license by the end of 2025 and transition the business ahead of schedule. As a result, the Champion Japan business was reclassified to discontinued operations in the fourth-quarter 2024. For the full-year 2024, the Champion Japan business generated approximately $124 million of net sales and an adjusted operating profit of approximately $12 million.

The Company is providing guidance on tax expense due to the expected fluctuation of its quarterly tax rate, stemming from the deferred tax reserve matter previously disclosed in the fourth quarter of 2022. Importantly, the reserve does not impact cash taxes. Some portion of the reserve may reverse in future periods.

The Company defines organic constant currency net sales as net sales excluding the ‘other’ segment and the year-over-year impact from foreign exchange rates.

For fiscal year 2025, which ends on January 3, 2026 and includes a 53rd week, the Company currently expects:

•    Net sales from continuing operations of approximately $3.47 billion to $3.52 billion, which includes projected headwinds of approximately $60 million from changes in foreign currency exchange rates. At the midpoint, net sales are expected to be relatively consistent with prior year on a reported basis and increase approximately 1% on an organic constant currency basis.

•    GAAP operating profit from continuing operations of approximately $420 million to $440 million.

•    Adjusted operating profit from continuing operations of approximately $450 million to $465 million, which excludes pretax charges for restructuring and other action-related charges of approximately $25 million to $30 million. The operating profit outlook includes a projected headwind of approximately $8 million from changes in foreign currency exchange rates.

•    GAAP and Adjusted Interest expense of approximately $190 million.

•    GAAP Other expenses of approximately $49 million. Adjusted Other expenses of approximately $36 million, which excludes approximately $13 million of estimated pretax refinancing charges.

•    GAAP and Adjusted Tax expense of approximately $40 million.

•    GAAP earnings per share from continuing operations of approximately $0.39 to $0.45.

•    Adjusted earnings per share from continuing operations of approximately $0.51 to $0.55.

•    Cash flow from operations of approximately $350 million.

•Capital investments of approximately $65 million, consisting of approximately $50 million of capital expenditures and approximately $15 million of cloud computing arrangements.

•    Free cash flow of approximately $300 million.

•    Fully diluted shares outstanding of approximately 361 million.

For first-quarter 2025, which ends on March 29, 2025, the Company currently expects:

•    Net sales from continuing operations of approximately $750 million, which includes projected headwinds of approximately $15 million from changes in foreign currency exchange rates. This represents an approximate 1% increase as compared to prior year on a reported basis and on an organic constant currency basis net sales are expected to be consistent with prior year.

•    GAAP operating profit from continuing operations of approximately $55 million.

•    Adjusted operating profit from continuing operations of approximately $65 million, which excludes pretax charges for restructuring and other action-related charges of approximately $10 million. The operating profit outlook includes a projected headwind of approximately $1 million from changes in foreign currency exchange rates.

•    GAAP and Adjusted Interest expense of approximately $47 million.

•    GAAP Other expenses of approximately $21 million. Adjusted Other expenses of approximately $8 million, which excludes approximately $13 million of estimated pretax refinancing charges.

•    GAAP and Adjusted Tax expense of approximately $3 million.

•GAAP loss per share from continuing operations of approximately $(0.05) based on 354 million diluted shares outstanding, as calculated under GAAP (no dilution due to GAAP loss from continuing operations)

•Adjusted earnings per share from continuing operations of approximately $0.02 based on fully diluted shares outstanding of approximately 360 million.

HanesBrands has updated its quarterly frequently-asked-questions document, which is available at www.Hanes.com/FAQ.

In a separate press release issued today, HanesBrands announced that Steve Bratspies will depart as Chief Executive Officer of the Company at the end of 2025, or upon the appointment of his successor. Bratspies will also step down from the Board of Directors concurrent with the end of his tenure as CEO. The HanesBrands Board has begun a comprehensive search to identify the Company’s next CEO as part of the Company’s leadership succession planning process and has retained Spencer Stuart, a leading executive search firm, to support its work. Bratspies will stay on in an advisory role once a new CEO is named to support a smooth transition.

HanesBrands has chosen to present these non‐GAAP measures to investors to enable additional analyses of past, present and future operating performance and as a supplemental means of evaluating operations absent the effect of our supply chain restructuring and consolidation and other actions that are deemed to be material stand-alone initiatives apart from the Company’s core operations. HanesBrands believes these non-GAAP measures provide management and investors with valuable supplemental information for analyzing the operating performance of the Company’s ongoing business during each period presented without giving effect to costs associated with the execution of any of the aforementioned actions taken.

Net debt is defined as the total of current debt, long-term debt, and borrowings under the accounts receivable securitization facility (excluding long-term debt issuance costs and debt discount and borrowings of unrestricted subsidiaries under the accounts receivable securitization facility) less (x) other debt and cash adjustments and (y) cash and cash equivalents. Leverage ratio is the ratio of net debt to adjusted EBITDA as it is defined in our Credit Agreement.

The Company defines free cash flow as net cash from operating activities less capital expenditures. Management believes that free cash flow, which measures our ability to generate additional cash from our business operations, is an important financial measure for use in evaluating the Company's financial performance. The Company defines organic net sales as net sales excluding the ‘other’ segment and excluding those derived from businesses acquired or divested within the previous 12 months of the reporting date.

HanesBrands is a global company that reports financial information in U.S. dollars in accordance with GAAP. As a supplement to the Company’s reported operating results, HanesBrands also presents constant currency financial information, which is a non-GAAP financial measure that excludes the impact of translating foreign currencies into U.S. dollars. The Company uses constant currency information to provide a framework to assess how the business performed excluding the effects of changes in the rates used to calculate foreign currency translation.

To calculate foreign currency translation on a constant currency basis, operating results for the current-year period for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the average exchange rates in effect during the comparable period of the prior year (rather than the actual exchange rates in effect during the current year period).

Non‐GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as an alternative to, or substitute for, financial results prepared in accordance with GAAP.

Further, the non-GAAP measures presented may be different from non-GAAP measures with similar or identical names presented by other companies.

Reconciliations of these non-GAAP measures to the most directly comparable GAAP financial measures are presented in the supplemental financial information included with this news release.

This news release contains information that may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements that do not relate solely to historical or current facts, and can generally be identified by the use of words such as “may,” “believe,” “could,” “will,” “expect,” “outlook,” “potential,” “project,” “estimate,” “future,” “intend,” “anticipate,” “plan,” “continue” or similar expressions. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. All statements regarding our intent, belief and current expectations about our strategic direction, prospects and future results are forward-looking statements and are subject to risks and uncertainties that could cause actual results to differ materially from those implied or expressed by such statements. These risks and uncertainties include, but are not limited to, trends associated with our business; our ability to successfully implement our strategic plans, including our supply chain restructuring and consolidation and other cost savings initiatives; trends associated with our business; the rapidly changing retail environment and the level of consumer demand; the effects of any geopolitical conflicts (including the ongoing Russia-Ukraine conflict and Middle East conflicts) or public health emergencies or severe global health crises, including effects on consumer spending, global supply chains, critical supply routes and the financial markets; our ability to deleverage on the anticipated time frame or at all; any inadequacy, interruption, integration failure or security failure with respect to our information technology; future intangible assets or goodwill impairment due to changes in our business, market condition or other factors, significant fluctuations in foreign exchange rates; legal, regulatory, political and economic risks related to our international operations; our ability to effectively manage our complex international tax structure; our future financial performance; and other risks identified from time to time in our most recent Securities and Exchange Commission reports, including our annual report on Form 10-K and quarterly reports on Form 10-Q. Because it is not possible to predict or identify all of the risks, uncertainties and other factors that may affect future results, the above list should not be considered a complete list. Any forward-looking statement speaks only as of the date on which such statement is made, and Hanesbrands undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

HanesBrands (NYSE: HBI) is a global leader in manufacturing basics and Innerwear brands that are synonymous with comfort, quality, and value, and have been trusted by consumers around the world for generations. Among the Company’s iconic brands are Hanes, the leading basic apparel brand in the U.S.; Bonds, an Australian staple since 1915 that is setting new standards for design and innovation; Maidenform, America’s number one shapewear brand; and Bali, Americas number one national bra brand in the U.S. HanesBrands owns the majority of its worldwide manufacturing facilities and has built a strong reputation for workplace quality and ethical business practices.

 

 

 

Condensed Consolidated Statements of Cash Flows1

 

1			Free cash flow includes the results from continuing and discontinued operations for all periods presented.

The Company is unable to reconcile projections of financial performance beyond 2025 without unreasonable efforts, because the Company cannot predict, with a reasonable degree of certainty, the type and extent of certain items that would be expected to impact these figures in 2025 and beyond, such as net sales, operating profit, tax rates and action related charges.

Updated February 13, 2025 – New or updated information is in red

General and Current Period FAQs (Guidance comments as of February 13, 2025)

Unless otherwise indicated, all guidance and related commentary as well as comparisons to prior periods reflect continuing operations.

(1) Q: What are the main components of your full-year 2025 guidance?

(2) Q: What are the main components of your first-quarter 2025 guidance?

(3) Q: Can you size any exposure to Mexico, Canada, and China given the current tariff environment?

***For prior FAQs that are applicable to their respective quarters, please see our prior Securities and Exchange Commission reports, including our Current Reports on Form 8-K.***

# # #

HanesBrands has chosen to present these non‐GAAP measures to investors to enable additional analyses of past, present and future operating performance and as a supplemental means of evaluating operations absent the effect of our supply chain restructuring and consolidation and other actions that are deemed to be material stand-alone initiatives apart from the Company’s core operations. HanesBrands believes these non-GAAP measures provide management and investors with valuable supplemental information for analyzing the operating performance of the Company’s ongoing business during each period presented without giving effect to costs associated with the execution of any of the aforementioned actions taken.

Net debt is defined as the total of current debt, long-term debt, and borrowings under the accounts receivable securitization facility (excluding long-term debt issuance costs and debt discount and borrowings of unrestricted subsidiaries under the accounts receivable securitization facility) less (x) other debt and cash adjustments and (y) cash and cash equivalents. Leverage ratio is the ratio of net debt to adjusted EBITDA as it is defined in our Credit Agreement. The Company defines free cash flow as net cash from operating activities less capital expenditures. Management believes that free cash flow, which measures our ability to generate additional cash from our business operations, is an important financial measure for use in evaluating the Company's financial performance. The Company defines organic net sales as net sales excluding the ‘other’ segment and excluding those derived from businesses acquired or divested within the previous 12 months of the reporting date.

HanesBrands is a global company that reports financial information in U.S. dollars in accordance with GAAP. As a supplement to the Company’s reported operating results, HanesBrands also presents constant-currency financial information, which is a non-GAAP financial measure that excludes the impact of translating foreign currencies into U.S. dollars. The Company uses constant currency information to provide a framework to assess how the business performed excluding the effects of changes in the rates used to calculate foreign currency translation. To calculate foreign currency translation on a constant currency basis, operating results for the current-year period for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the average exchange rates in effect during the comparable period of the prior year (rather than the actual exchange rates in effect during the current year period).

Non‐GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as an alternative to, or substitute for, financial results prepared in accordance with GAAP. Further, the non-GAAP measures presented may be different from non-GAAP measures with similar or identical names presented by other companies. See

the Company's press release dated February 13, 2025, to reconcile quarterly non-GAAP measures to the most directly comparable GAAP financial measures. A copy of the press release is available at www.Hanes.com/Investors.

These FAQs contain certain information that may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements that do not relate solely to historical or current facts, and can generally be identified by the use of words such as “may,” “believe,” “could,” “will,” “expect,” “outlook,” “potential,” “project,” “estimate,” “future,” “intend,” “anticipate,” “plan,” “continue” or similar expressions. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. All statements regarding our intent, belief and current expectations about our strategic direction, prospects and future results are forward-looking statements and are subject to risks and uncertainties that could cause actual results to differ materially from those implied or expressed by such statements. These risks and uncertainties include, but are not limited to, trends associated with our business; our ability to successfully implement our strategic plans, including our supply chain restructuring and consolidation and other cost savings initiatives; trends associated with our business; the rapidly changing retail environment and the level of consumer demand; the effects of any geopolitical conflicts (including the ongoing Russia-Ukraine conflict and Middle East conflicts) or public health emergencies or severe global health crises, including effects on consumer spending, global supply chains, critical supply routes and the financial markets; our ability to deleverage on the anticipated time frame or at all; any inadequacy, interruption, integration failure or security failure with respect to our information technology; future intangible assets or goodwill impairment due to changes in our business, market condition or other factors, significant fluctuations in foreign exchange rates; legal, regulatory, political and economic risks related to our international operations; our ability to effectively manage our complex international tax structure; our future financial performance; and other risks identified from time to time in our most recent Securities and Exchange Commission reports, including our annual report on Form 10-K and quarterly reports on Form 10-Q. Because it is not possible to predict or identify all of the risks, uncertainties and other factors that may affect future results, the above list should not be considered a complete list. Any forward-looking statement speaks only as of the date on which such statement is made, and Hanesbrands undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

In the second quarter of 2024, the Company reached the decision to exit the U.S.-based outlet store business and the global Champion business, excluding the Champion Japan business, and began to separately report the results of the global Champion and U.S.-based outlet store businesses as discontinued operations. In December 2024, the Company finalized plans to exit the Champion Japan business. The Company determined that the exit of the global Champion business, U.S.-based outlet store business and the Champion Japan business represent multiple components of a single strategic plan that met held-for-sale and discontinued operations accounting criteria prior to the period ending December 28, 2024. The historical financial information included herein for 2022, 2023 and 2024 has been revised to present the results of the Champion Japan business as discontinued operations along with the global Champion and U.S.-based outlet store businesses for all periods presented.

In addition, the Company realigned its reportable segments in the second quarter of 2024 and has applied this change to all periods presented. The Company’s operations are now managed and reported in two operating segments, each of which is a reportable segment for financial reporting purposes: U.S. and International. Other consists of the Company’s U.S. Sheer Hosiery business which was sold on September 29, 2023 and certain sales from the Company’s supply chain and short term support / transition services agreements for disposed businesses.