Hanesbrands Reports Mixed Q3 Results Amid Strategic Changes, Net Sales Down 3% to $937.1M

Hanesbrands Inc. reported its financial results for the third quarter and the nine months ended September 28, 2024, reflecting a mixed performance amid significant strategic changes. For the third quarter, net sales decreased to $937.1 million, down 3% from $961.3 million in the same period last year. The decline was attributed to the divestiture of the U.S. Sheer Hosiery business and unfavorable foreign currency impacts. However, gross profit increased to $390.4 million, an 11.6% rise from $349.8 million, driven by reduced input costs and supply chain improvements.

Operating profit for the quarter rose to $103 million, a 27.1% increase from $81 million, with operating margins improving to 11.0% from 8.4%. The company reported income from continuing operations of $32.4 million, a significant turnaround from a loss of $6 million in the prior year. Net income for the quarter was $30 million, compared to a loss of $38.8 million in Q3 2023. Earnings per share for the quarter were $0.09, compared to a loss of $0.11 per share in the previous year.

For the nine months ended September 28, 2024, net sales totaled $2.71 billion, a decrease of 5.9% from $2.88 billion in the same period of 2023. Gross profit increased slightly to $1.01 billion, up 1.8% year-over-year. However, operating profit fell sharply to $79 million, down 55.3% from $176.5 million, reflecting increased restructuring charges and operational challenges. The company reported a net loss of $307.6 million for the nine months, a significant increase from a loss of $95.7 million in the prior year.

Strategically, Hanesbrands has undergone significant restructuring, including the exit from the global Champion business and U.S.-based outlet store operations, which were classified as discontinued operations starting in Q2 2024. The sale of the Champion business to Authentic Brands Group was completed on September 30, 2024, for gross cash proceeds of $857.5 million, with net proceeds used to reduce outstanding term debt. The company also reported increased restructuring charges, totaling $223 million for the nine months, compared to $22 million in the same period last year.

As of September 28, 2024, Hanesbrands had total assets of $5.46 billion and total liabilities of $5.31 billion, resulting in stockholders' equity of $149.3 million. The company maintained a cash balance of $317.3 million, reflecting a significant increase from $172.8 million at the same time last year. The company continues to focus on debt reduction and operational efficiency amid ongoing market challenges.