HanesBrands (HBI) Q4 2024 earnings summary

Executive summary

• Delivered strong Q4 and full-year 2024 results, exceeding expectations across sales, margins, EPS, operating cash flow, and debt reduction, driven by transformation strategy and operational improvements.

• Announced exit of Champion Japan license, reclassifying the business to discontinued operations in Q4 2024.

• Announced leadership succession plan as company enters next growth phase, with CEO transition expected by end of 2025.

Financial highlights

• Q4 net sales increased 4.5% year-over-year to $888 million; organic constant currency sales up nearly 4%.

• Q4 gross margin rose 400 bps to 44.1%; operating margin up 300 bps to 14.2%; adjusted EPS was $0.17, up from $0.05 last year.

• Full-year gross margin improved 580 bps to 41.4%; operating margin expanded 390 bps to 11.8%.

• Full-year cash flow from operations was $264 million; over $1 billion in debt paid down in 2024.

• Year-end leverage ratio improved to 3.4x net debt/Adjusted EBITDA from 5.2x last year.

Outlook and guidance

• FY2025 net sales expected at $3.47–$3.52 billion, up ~1% organically; adjusted operating profit guidance: $450–$465 million; adjusted EPS: $0.51–$0.55.

• Q1 2025: net sales up 1% to ~$750 million, operating profit up nearly 30%, adjusted EPS of ~$0.02.

• Margin expansion expected to continue, with gross and operating margins both improving year-over-year.

• All free cash flow to be used for debt paydown; leverage targeted at ~3x by end of 2025; refinancing of 2026 maturities planned in Q1 2025.