Hanesbrands Reports $3.5 Billion in Net Sales, Faces Decline in Profitability

Hanesbrands Inc. reported a total net sales of $3.5 billion for the fiscal year ending December 28, 2024, a decrease of approximately 4% compared to $3.6 billion in 2023. The company's operating profit also declined significantly, falling to $186 million from $266 million in the previous year, marking a 30% decrease. This decline in profitability was attributed to increased restructuring and other action-related charges, which rose to $229 million in 2024 from $23 million in 2023. The diluted loss per share from continuing operations was $(0.28), a stark contrast to the earnings of $0.08 per share reported in 2023.

The company underwent significant strategic changes during the fiscal year, including the divestiture of its U.S. Sheer Hosiery business and the global Champion business, which was sold to Authentic Brands Group for $857 million in cash and potential additional contingent cash consideration of up to $300 million. The exit from the U.S.-based outlet store business was also completed in July 2024. These divestitures were part of a broader strategy to streamline operations and focus on core innerwear and basic apparel segments, which now comprise the company's two reportable segments: U.S. and International.

Operationally, Hanesbrands faced challenges due to macroeconomic pressures, including a slowdown in consumer spending and unfavorable foreign currency exchange rates, which negatively impacted its International segment. The U.S. segment reported net sales of $2.6 billion, a decrease of 2.1% from the previous year, while the International segment saw a 2.6% decline in net sales to $908 million. The company also reported a significant reduction in its inventory levels, which was part of its ongoing efforts to improve inventory management and reduce SKU counts.

Looking ahead, Hanesbrands aims to build on its recent momentum by continuing to focus on its core business and exploring new market opportunities. The company is committed to enhancing shareholder value through strategic investments and debt reduction, having paid down $1.1 billion of its outstanding term debt in 2024. Despite the challenges posed by the current economic environment, management remains optimistic about the company's ability to adapt and grow, emphasizing a disciplined approach to capital allocation and operational efficiency.