Hanesbrands HBI 2025Q2 Earnings Preview Upside Potential Driven by Cost Optimization and Growth Strategy

Forward-Looking Analysis
For the second quarter of 2025, Hanesbrands is projected to report net sales of approximately $970 million, with a potential headwind of $15 million from foreign exchange rates. The company expects GAAP operating profit around $129 million and adjusted operating profit close to $136 million, accounting for restructuring charges. Interest and other expenses are anticipated to be around $50 million and $9 million, respectively. Hanesbrands projects GAAP EPS from continuing operations at $0.16 and adjusted EPS at $0.18, with about 357 million diluted shares outstanding. The company remains confident in its ability to mitigate cost headwinds through strategic cost reductions and pricing actions, leveraging its efficient supply chain and strong retail relationships. Hanesbrands reiterates its full-year guidance, including expected tariff impacts, projecting net sales between $3.47 billion and $3.52 billion and adjusted EPS between $0.51 and $0.55. Overall, the company remains optimistic about capturing new revenue opportunities and maintaining robust financial performance through its strategic growth initiatives.

Historical Performance Review
In the first quarter of 2025, Hanesbrands reported net sales of $760.15 million, achieving a gross profit of $316.70 million. Despite a net income loss of $9.46 million, the company recorded an EPS of $-0.03. The quarter was marked by a 2.1% increase in net sales over the previous year, driven by cost-saving initiatives and improved assortment management. The gross margin rose to 41.7%, reflecting a 170 basis point improvement. While the U.S. segment saw a slight decline, international sales grew by 4% on a constant currency basis. The company continues to focus on optimizing its supply chain and reducing fixed costs.

Additional News
Hanesbrands has effectively reduced its debt by more than $500 million over the past year and is on track to retire an additional $300 million in 2024. The company recently surpassed Wall Street expectations with its Q1 2025 EPS of $0.07, outperforming the forecasted $0.03, showcasing strong financial performance. Hanesbrands has also reiterated its positive outlook for the fiscal year 2025, projecting an EPS range of $0.51 to $0.55 and Q2 2025 EPS of $0.18. Additionally, the company continues to focus on its growth strategy and cost optimization, with a robust financial outlook for the upcoming quarters.

Summary & Outlook
Overall, Hanesbrands exhibits strong financial health with a forecasted Q2 2025 EPS of $0.18, driven by strategic cost optimization and growth initiatives. The company's ability to manage cost headwinds through pricing actions and supply chain efficiencies positions it favorably for continued success. Despite a Q1 net income loss, Hanesbrands demonstrated resilience with sales growth and improved margins. The company's debt reduction efforts and full-year EPS guidance of $0.51 to $0.55 underscore a solid financial foundation. Future prospects remain bullish, with potential growth catalysts in new revenue opportunities and ongoing transformation initiatives.