US' HanesBrands Q2 profit surges 345%, raises FY25 guidance

On an adjusted basis, the gross profit reached $408 million with a 145-bps increase in gross margin to 41.2 per cent. The operating margin rose 2,210 bps to 15.6 per cent.

The adjusted operating profit was $153 million, rising 22 per cent with a margin of 15.5 per cent (up 255 basis points). Earnings per share (EPS) jumped 162 per cent YoY to $0.24, while adjusted EPS increased 60 per cent to the same value. Interest and other expenses fell by $4 million to $57 million, driven by lower debt balances, HanesBrands said in a press release.

Region-wise, US sales declined by $5 million, though gains were seen in basics, active, and new businesses; these were offset by softness in intimate apparel. US operating margin rose 360 bps to 25 per cent. International sales declined 3 per cent on a reported basis (flat in constant currency), with regional growth in the Americas, flat sales in Australia, and a decline in Asia. International operating margin fell 225 basis points to 10.7 per cent, affected by higher promotional activity, unfavourable mix, and FX headwinds.

The company’s leverage ratio improved to 3.3 times net debt-to-adjusted EBITDA, down from 4.6 times in the prior year. Inventory rose 4 per cent YoY to $957 million, while cash flow from operations totalled $36 million, and free cash flow stood at $27 million, compared to $78 million and $71 million, respectively, last year.

“For the third consecutive quarter, we delivered revenue, profit and earnings per share growth that exceeded our expectations as we continue to see the benefits of our growth strategy and prior transformation initiatives,” said Steve Bratspies, CEO at HanesBrands Inc. “With our strong performance to date and our visibility to cost savings and input costs, we raised our full-year outlook, which continues to reflect our expected impact from US tariffs.”

“Our strategy is delivering consistent results, and we’re confident it positions us for continued long-term success. We have multiple avenues to drive increased shareholder returns over the next several years through consistent sales growth, additional margin expansion, and continued debt reduction,” added Bratspies.

For the third quarter (Q3) FY25, ending September 27, outlook includes net sales of $900 million (with a $7 million FX headwind), GAAP operating profit of $116 million, adjusted operating profit of $122 million (excluding $6 million in charges), interest expense of $46 million, other expenses of $10 million, tax expense of $10 million, GAAP EPS of $0.14, and adjusted EPS of $0.16, with 357 million diluted shares outstanding. The company also forecasts diluted shares outstanding at approximately 357 million.

ALCHEMPro News Desk (SG)