Hanesbrands Reports 2% Net Sales Increase and 126% Operating Profit Growth in Q1 2025

Hanesbrands Inc. reported a net sales increase of 2% for the first quarter of 2025, reaching $760.1 million compared to $744.7 million in the same period of 2024. The company achieved an operating profit of $79.9 million, a significant rise of 126% from $35.4 million year-over-year. This improvement in profitability was attributed to cost-saving initiatives and disciplined expense management, which contributed to an operating margin increase to 10.5% from 4.8% in the prior year. Despite these gains, the company reported a net loss of $9.5 million, a reduction from a loss of $39.1 million in the previous year, primarily due to losses from discontinued operations.

In terms of operational changes, Hanesbrands has undergone significant restructuring, including the exit from its global Champion business and the U.S.-based outlet store business, which were classified as discontinued operations. The company has also streamlined its operations, reducing inventory and product SKUs to enhance efficiency. The restructuring efforts have led to a decrease in restructuring and other action-related charges, which fell to $1.1 million in the first quarter of 2025 from $15 million in the same quarter of 2024.

Geographically, the U.S. segment saw a slight decline in net sales by 1.4%, while the International segment experienced a 2.2% decrease, largely due to unfavorable foreign currency exchange rates. However, on a constant currency basis, International sales increased by 4%. The company reported that its U.S. operating margin improved to 20.9%, driven by reduced input costs and favorable assortment management, while the International segment's margin rose to 11.5%.

Hanesbrands has also made strategic financial moves, including refinancing its debt structure to enhance financial flexibility. The company refinanced its Senior Secured Credit Facility, which now includes a $750 million revolving credit facility and a $1.1 billion term loan, maturing in 2032. This refinancing was part of a broader strategy to reduce debt and improve cash flow, with the company focusing on maintaining a net debt-to-adjusted EBITDA ratio of two to three times.

Looking ahead, Hanesbrands remains cautious about the macroeconomic environment, including consumer demand headwinds and elevated interest rates. The company is committed to optimizing its capital structure and managing working capital effectively. Despite the challenges, Hanesbrands is focused on leveraging its brand portfolio and supply chain to drive growth and improve margins in the future.