Hanesbrands' 2024 Earnings: A Mixed Bag, But Room for Optimism

Alright, folks, let's dive into Hanesbrands' full-year 2024 earnings. Now, I know what you're thinking, "Oh no, another earnings report!" But stick with me, because there's a lot to unpack here, and it's not all doom and gloom.

First things first, let's talk about the elephant in the room. Hanesbrands missed expectations for the fourth quarter, with sales coming in at $888.47 million, falling short of the estimated $950.27 million. Now, I know that's not great, but let's not throw the baby out with the bathwater just yet. On an organic constant currency basis, net sales increased 3.8% over prior year, which is still a solid growth rate.

Now, let's talk about the good stuff. Adjusted EPS of $0.17 beat the analyst consensus of $0.14, which is always a nice surprise. U.S. net sales increased 3% over prior year, driven primarily by innerwear innovation, including Hanes Absolute Socks, Hanes Moves, Hanes Supersoft, and Bali Breathe. International sales increased 6% on a constant currency basis compared to prior year, with sales growing in Australia, the Americas, and Asia. Gross margin expanded 380 basis points Y/Y to 43.9%, and operating margin expanded 240 basis points to 13.5%, with operating income for the quarter jumping 26.7% to $119.7 million. Inventories decreased 9% to $871 million, and the company held $214.85 million in cash and equivalents as of Dec. 28, 2024. Cash flow from operations for the quarter was $67.4 million.



Now, let's talk about the outlook for 2025. Hanesbrands expects FY25 sales of $3.47 billion – $3.52 billion versus an estimate of $3.655 billion. It sees FY25 adj EPS of $0.51 – $0.55 versus the $0.57 estimate. For the first quarter, the company anticipates sales of $750 million, against an estimate of $785.28 million. It sees adjusted EPS of $0.02 against an estimate of $0.03. So, while the guidance is a bit lower than expected, it's not a complete disaster.

leadership succession is also a concern. Hanesbrands announced that Steve Bratspies will depart as Chief Executive Officer at the end of 2025, or upon the appointment of his successor. Bratspies will step down from the Board concurrent with the end of his tenure as CEO. This could introduce some uncertainty during the search for a new CEO, but the company is confident in its succession plan.



In conclusion, Hanesbrands' 2024 earnings were a mixed bag, with some bright spots and some areas for concern. While the company missed expectations for the fourth quarter, it still managed to beat EPS estimates and deliver solid growth in key areas. The outlook for 2025 is a bit lower than expected, but not catastrophic. As always, it's important to keep an eye on the company's progress and make informed decisions based on the latest information.