HanesBrands (HBI) Q1 2025 earnings summary

Executive summary

• Transformation and cost-saving initiatives led to a healthier, more profitable company, with significant debt reduction and supply chain optimization.

• Q1 2025 net sales increased 2.1% year-over-year to $760 million, with operating profit up 126% to $80 million and EPS rising to $0.07 (adjusted).

• The company completed the exit of the global Champion business, U.S.-based outlet stores, and finalized plans to exit Champion Japan, all now reported as discontinued operations.

• Growth strategy and portfolio simplification are driving strong results, including margin expansion and improved leverage.

• The company is well-positioned to manage tariff headwinds and capitalize on market disruptions for incremental revenue opportunities.

Financial highlights

• Q1 2025 net sales were $760.1 million (up 2.1% year-over-year); U.S. sales down 1%, international sales up 4% constant currency.

• Gross margin improved to 41.7% (up 170 bps GAAP, 165 bps adjusted); operating margin up to 10.7% (adjusted).

• SG&A expenses decreased 9.6% year-over-year to $236.8 million, supporting margin improvement.

• EPS rose 240% to $0.07 (adjusted); net loss improved to $(9.5) million from $(39.1) million in Q1 2024.

• Net debt to Adjusted EBITDA leverage improved to 3.6x, with net debt at $2.2 billion.

Outlook and guidance

• Q2 2025 guidance: net sales of ~$970 million, GAAP EPS $0.16, adjusted EPS $0.18.

• Full-year 2025 outlook reiterated: net sales $3.47–$3.52 billion, adjusted operating profit $450–$465 million, adjusted EPS $0.51–$0.55.

• Tariff cost headwinds expected in Q4, with mitigation plans in place.

• Capital expenditures for 2025 expected at $65 million.

• Management expects sufficient liquidity to support operations and strategies for at least the next 12 months.