What caused HBI's earnings surprises in 2024?

Hanesbrands Inc. (HBI) experienced an earnings surprise in the fourth quarter of 2024, with an EPS surprise of $0.03 and a revenue surprise of -$11.26 million. The company's earnings have been challenging throughout the year, with significant fluctuations and misses against expectations, particularly in the second and third quarters. However, the fourth quarter showed strong results with improved sales and margin growth. The full-year 2024 earnings were robust with results across all key metrics exceeding expectations.

1. **Strategic Restructuring and Debt Reduction**: HBI's strategic restructuring and significant debt reduction efforts have positively impacted its financial performance. The company paid down over $1 billion of debt, reducing leverage to 3.4 times net debt to adjusted EBITDA. This strategic move has enhanced the company's financial health and improved its profitability.
2. **Cost-Saving Measures and Expense Management**: HBI implemented cost-saving measures and exercised careful expense management, which helped mitigate the impact of sales challenges and contributed to the improved profitability seen in the third quarter. This focus on efficiency has been crucial in boosting the company's bottom line.
3. **Gross Margin and Operating Margin Improvements**: The company's gross margin increased significantly, rising by 750 basis points year-over-year to 39.9%, surpassing company expectations. This improvement, along with a boost in operating margin, has led to enhanced profitability and operating profit growth.

In conclusion, HBI's earnings surprises in 2024 can be attributed to strategic restructuring, debt reduction, cost-saving measures, and improvements in gross and operating margins. These factors, among others, have contributed to the company's strong financial performance and exceeded expectations in key financial metrics.