• Revenue: Increased 2% over prior year to $760 million.

• Operating Profit: Increased 61% over the prior year.

• Earnings Per Share (EPS): Increased 240% to $0.07.

• Gross Margin: Increased 165 basis points to 41.6%.

• Operating Margin: Expanded by 390 basis points to 10.7%.

• SG&A Expenses: Decreased 5% compared to prior year, leveraging 225 basis points.

• International Sales: Increased 4% on an organic constant currency basis.

• US Sales: Decreased 1%, in line with expectations.

• Debt Reduction: Over $1 billion of debt paid down last year.

• Cash Flow from Operations: Use of $108 million due to seasonal inventory build.

• Leverage: 3.6 times net debt to adjusted EBITDA, 1.4 times lower than prior year.

• New Businesses Growth: Increased 60% over prior year.

• Second Quarter Guidance: Expected sales of approximately $970 million, operating profit of $136 million, and EPS of $0.18.

• Warning! GuruFocus has detected 5 Warning Signs with HBI.

Release Date: May 08, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Hanesbrands Inc (NYSE:HBI) reported better-than-expected sales, gross margin, operating profit, and earnings per share for the first quarter of 2025.

• The company achieved a 61% increase in operating profits and a 240% increase in EPS over the prior year.

• International sales increased by 4% on an organic constant currency basis, driven by growth in Australia and Asia.

• Hanesbrands Inc (NYSE:HBI) successfully reduced over $1 billion of debt last year, strengthening its balance sheet.

• The company has a diversified supply chain with zero exposure to China, allowing flexibility to manage tariff impacts.

Negative Points

• Sales in the US decreased by 1%, with ongoing consumer headwinds affecting the innerwear market, particularly the intimate apparel category.

• The intimates business was down mid-teens compared to last year, facing challenges in the current economic environment.

• The company anticipates tariff-related cost impacts starting in Q4, requiring mitigation strategies.

• Hanesbrands Inc (NYSE:HBI) faces pressure from macroeconomic conditions and consumer demand dynamics.

• Despite strong performance, the company reported a use of $108 million of cash flow from operations in the quarter due to seasonal inventory build.

Q & A Highlights

Q: Can you elaborate on your ability to mitigate the impact of tariffs and the revenue opportunities you mentioned? A: Stephen Bratspies, CEO, explained that HanesBrands can fully mitigate tariff headwinds both short and long term. The tariffs are not expected to impact until Q4, and the company has significant US content in its products, exempt from reciprocal tariffs. HanesBrands is planning for a higher tariff rate to ensure preparedness. The company has a balanced East-West manufacturing supply chain with zero exposure to China, allowing flexibility. Revenue opportunities are driven by the Western Hemisphere supply chain, with inbound interest from retail partners seeking to replace products from China. These opportunities are not related to private label but rather expanding HanesBrands' own brands.