Core Insights - Hanesbrands Inc. reported third-quarter 2025 results, with both revenue and earnings falling short of the Zacks Consensus Estimate, although the bottom line showed year-over-year improvement [1][3]. Financial Performance - Adjusted earnings from continuing operations were 15 cents per share, missing the Zacks Consensus Estimate of 16 cents, but up from 12 cents per share in the prior year [3][9]. - Net sales from continuing operations decreased by 1% year over year to $891.7 million, missing the Zacks Consensus Estimate of $901 million; on a constant-currency basis, organic net sales fell by 4.9% [3][9]. - Adjusted gross profit was $364 million, down 3% year over year, with an adjusted gross margin of 40.8%, a decline of nearly 80 basis points [4]. Cost Management - Selling, general and administrative (SG&A) costs were $255.9 million, down 8.4% year over year, and as a percentage of net sales, SG&A costs decreased to 28.7% from 31% in the prior year [5]. - Adjusted operating profit was $116 million, up 3% year over year, with an adjusted operating margin of 13%, an increase of 45 basis points, driven by lower SG&A expenses [5]. Segment Performance - U.S. segment net sales decreased by 4.5% year over year to $647.5 million, impacted by unexpected shifts in ordering patterns; however, unit point-of-sale trends improved sequentially [6]. - The U.S. segment's operating margin was 22.2%, up almost 20 basis points, supported by reduced input costs and cost-saving initiatives [7]. - International segment net sales decreased by 8% to $204.4 million, with a $4 million headwind from unfavorable foreign exchange rates; constant-currency net sales increased in Japan but declined in the Americas and Australia [8]. Financial Position - The company ended the quarter with cash and cash equivalents of $217.6 million, long-term debt of $2.21 billion, and total stockholders' equity of $446.4 million [11]. - Net cash from operating activities was $27.6 million, with free cash flow of $22.3 million in the third quarter [11]. Strategic Outlook - Hanesbrands has entered into a definitive merger agreement to be acquired by Gildan and is no longer providing guidance; however, management indicated that performance remains consistent with previously communicated 2025 EPS outlook [12].

Core Viewpoint - HanesBrands, Inc. will not provide future guidance due to its pending acquisition by Gildan, but it is on track to meet its previously provided full-year 2025 earnings guidance [1] Group 1: Financial Performance - For fiscal 2025, HanesBrands expects earnings of approximately $0.59 per share and adjusted earnings of approximately $0.66 per share from continuing operations [1] - Analysts polled expect the company to report earnings of $0.66 per share for the year, excluding special items [2]

Core Viewpoint - The news release discusses various forward-looking statements related to the company's strategic direction, potential risks, and uncertainties that could impact future results [1] Group 1: Strategic Plans and Business Environment - The company is focused on implementing strategic plans, including supply chain restructuring and cost-saving initiatives [1] - The rapidly changing retail environment and consumer demand levels are highlighted as significant factors affecting the company's performance [1] Group 2: Geopolitical and Economic Risks - Ongoing geopolitical conflicts, such as the Russia-Ukraine conflict and Middle East tensions, are noted as potential risks impacting consumer spending and global supply chains [1] - Legal, regulatory, and economic risks related to international operations, including duties and tariffs, are emphasized as critical considerations for the company [1] Group 3: Merger and Acquisition Considerations - The company is involved in a merger agreement with Gildan, which may face delays or challenges in closing due to stockholder and regulatory approvals [1] - There are concerns regarding the realization of expected benefits or synergies from the merger, which may take longer or be more costly than anticipated [1]

Financial Performance - Net Sales for Q3 2025 were $892 million, a decrease of 1% compared to the prior year[4] - Operating Profit increased by 14% to $108 million, with Operating Margin rising by 160 basis points to 12.1%[4] - Earnings per Share (EPS) rose by 986% to $0.76, including a $0.64 per share discrete tax benefit[4] - Adjusted EPS increased by 25% to $0.15, compared to $0.12 per diluted share in the prior year[11] - Net sales for the quarter ended September 27, 2025, were $891.7 million, a decrease of 1.0% compared to $900.4 million in the same quarter of 2024[30] - Gross profit for the quarter was $363.5 million, down 2.7% from $373.5 million year-over-year, with a gross margin of 40.8%[30] - Operating profit increased by 14.3% to $107.5 million, compared to $94.0 million in the prior year, representing 12.1% of net sales[30] - Net income for the quarter was $270.7 million, significantly up from $30.0 million in the same quarter of 2024, with earnings per share (EPS) of $0.76 compared to $0.09[30] - For the nine months ended September 27, 2025, net sales were $2.64 billion, a slight increase of 0.9% from $2.62 billion in the same period of 2024[30] - The company reported a gross profit of $1.09 billion for the nine months, up 12.7% from $969.3 million year-over-year[30] - Operating profit for the nine months surged to $342.1 million, a 416.4% increase from $66.2 million in the previous year[30] - The diluted EPS from continuing operations for the nine months was $1.04, compared to a loss of $0.41 in the same period of 2024[30] Sales and Market Trends - U.S. net sales decreased by 4.5% due to unanticipated shifts in ordering patterns, but unit point-of-sale trends improved each month[12] - International net sales decreased by 8% on a reported basis, with a $4 million headwind from unfavorable foreign exchange rates[14] - The impact of foreign currency on net sales for the quarter was a decrease of $4.3 million, while the constant currency sales showed a decline of only 0.5%[32] - U.S. segment net sales for the quarter decreased by 4.5% to $647.5 million, while international segment net sales decreased by 8.1% to $204.4 million[43] Cash Flow and Liquidity - Cash Flow from Operations was $28 million, down from $92 million in the prior year, with Free Cash Flow at $22 million compared to $88 million last year[16] - Cash and cash equivalents as of September 27, 2025, were $217.6 million, compared to $316.8 million a year earlier[45] - Net cash from operating activities for the quarter was $27.597 million, a decrease from $92.215 million in the prior year[47] - Free cash flow for the quarter ended September 27, 2025, was $22,266 thousand, compared to $88,127 thousand in the same quarter of 2024[54] Debt and Leverage - The leverage ratio improved to 3.3 times net debt-to-adjusted EBITDA, down from 4.3 times in the prior year[16] - Long-term debt remained stable at approximately $2.21 billion, compared to $2.19 billion at the end of 2024[45] - Net debt as of September 27, 2025, was $2,042,260 thousand, down from $2,977,998 thousand a year earlier[53] - The leverage ratio, defined as Debt/Income from continuing operations, was 5.7 as of September 27, 2025, compared to (73.5) for the same period in 2024[53] Inventory and Assets - Inventory at the end of Q3 2025 was $991 million, an increase of 10% year-over-year, primarily due to tariffs[16] - Total assets increased to $4.28 billion from $3.84 billion at the end of 2024[45] - The company experienced a significant inventory write-down charge of $113.528 million during the nine months ended September 27, 2025[47] Strategic Initiatives - The company is focused on strategic plans including supply chain restructuring and cost-saving initiatives to enhance operational efficiency[30] - HanesBrands and Gildan entered into a definitive merger agreement, and no guidance will be provided due to the pending transaction[4] Other Financial Metrics - Total segment operating profit for the quarter was $164.8 million, down 7.1% from $177.3 million in the prior year[43] - The total operating profit margin for the quarter improved to 12.1%, up from 10.4% in the same quarter of 2024[43] - The company reported a significant increase in other net sales, which rose to $39.8 million from a loss of $0.4 million in the prior year quarter[43] - The company’s retained earnings increased to $577.5 million from $234.5 million at the end of 2024[45] - GAAP gross profit for the quarter was $363.450 million, representing 40.8% of net sales, compared to $373.477 million or 41.5% in the prior year[49] - Non-GAAP operating profit for the quarter was $115.808 million, which is 13.0% of net sales, up from 12.5% in the same quarter of 2024[49] - The company incurred restructuring and other action-related charges, including $3.119 million for professional services in the quarter[50] - The company incurred total restructuring and other action-related charges of $33,864 thousand for the last twelve months ended September 27, 2025[53] - The company reported a discrete tax benefit of $(227,732) thousand for the quarter ended September 27, 2025[51] - Non-GAAP income from continuing operations, as adjusted, was $52,455 thousand for the quarter ended September 27, 2025, up from $43,667 thousand in the prior year[51] - GAAP income from continuing operations for the quarter ended September 27, 2025, was $271,907 thousand, compared to a loss of $143,663 thousand for the same period in 2024[51] - Total EBITDA for the last twelve months ended September 27, 2025, was $455,868 thousand, significantly higher than $208,956 thousand for the same period in 2024[53]

Core Insights - Hanesbrands Inc. (HBI) is expected to report year-over-year earnings growth for Q3 2025, with an estimated earnings per share of 16 cents, up from 15 cents in the same quarter last year [1][10] - The consensus estimate for quarterly revenues is $900.6 million, reflecting a 3.9% decline from the previous year's figure [2] Revenue Estimates - The revenue estimates for HBI's U.S. and international segments are $671.6 million and $209.1 million, indicating year-over-year declines of 1% and 19.3%, respectively [4] - Management projected net sales of $900 million for Q3, accounting for a $7 million foreign currency exchange rate headwind, suggesting modest year-over-year softness [5] Market Conditions - HBI is facing ongoing consumer softness and specific category pressures, particularly in the U.S. innerwear market, which is sluggish, especially in the intimate apparel category [3][10] - Broader macroeconomic challenges are also impacting key international markets [3] Profitability Factors - The company's transformation and cost-efficiency initiatives are expected to support profitability, with management anticipating adjusted operating profit of $122 million and adjusted earnings per share of 16 cents for Q3 [6] - Structural improvements, including a leaner cost structure, supply-chain efficiencies, and reduced interest expenses from debt paydown, are likely to offset weaker sales and support the bottom line [7] Earnings Prediction Model - The current model does not predict an earnings beat for HBI, as it has an Earnings ESP of 0.00% and a Zacks Rank of 3 [8]

Core Insights - Gildan Activewear's Q3 earnings exceeded expectations, with adjusted per-share earnings at $1, surpassing analysts' estimates of $0.98 [1] - The company reported a 2.2% year-on-year growth in Q3 sales, reaching $911 million, driven by a 5.4% increase in the activewear segment [2] - Despite the sales increase, net earnings declined from $131.5 million in Q3 2024 to $120.2 million in Q3 2025 [3] Sales Performance - Activewear sales contributed positively with a 5.4% year-on-year increase due to a favorable product mix and higher net prices [2] - Hosiery and underwear sales experienced a significant decline, dropping over 22% year-on-year to $80 million, attributed to weak demand and unfavorable product mix [2] Acquisition Plans - The company plans to acquire HanesBrands for $2.2 billion in cash and stock, expected to close in late 2025 or early 2026 [4] - The CFO expressed confidence in the acquisition as a beneficial path forward for Gildan [4][5] Financial Guidance - Gildan adjusted its guidance for the remainder of 2025, raising its projected adjusted operating margin increase from 50 basis points to 70 basis points [6] - The company expects capital expenditures to be 4% of sales, down from the previously projected 5% [6] Supply Chain Considerations - Companies are hesitant to shift their supply chains to Gildan's vertical factories due to tariff-related uncertainties [7] - The CEO noted that supply chain adjustments should not be knee-jerk reactions, emphasizing the potential for further optimization and exploration of new product categories [8]

Group 1 - Wipro Limited has signed a multi-year strategic agreement with Hanesbrands Inc. to transform its IT infrastructure and cybersecurity operations using an AI-first approach [1][2] - The agreement is part of HanesBrands' IT 2.0 transformation initiative, which aims to implement a unified, AI-led managed services model [2][3] - Wipro will enhance HanesBrands' security by enabling AI-powered predictive and preventive operations, automating security workflows, and improving regulatory compliance [3] Group 2 - Wipro operates as an IT, consulting, and business process services company globally, with segments in IT Services and IT Products [4] - Hanesbrands Inc. designs, manufactures, sources, and sells a variety of innerwear apparel across multiple regions including the Americas, Europe, and Asia Pacific [4]

Group 1 - Infosys Limited (NYSE:INFY) has entered a strategic ten-year alliance with HanesBrands Inc. (NYSE:HBI) to enhance innovation and efficiency in HanesBrands' IT landscape [1][3] - The partnership designates Infosys as the strategic partner for HanesBrands' digital, business applications, and data initiatives, focusing on hyper productivity and AI-driven efficiency [1][2] - Infosys will utilize its proprietary AI-first platforms, particularly the Live Enterprise Automation Platform (LEAP), to modernize HanesBrands' core operations and enhance agility [2][3] Group 2 - The collaboration aligns with HanesBrands' long-term vision for agility and customer-centricity, leveraging Infosys's AI-first approach and proven innovation scaling capabilities [3] - HanesBrands Inc. specializes in designing, manufacturing, sourcing, and selling a variety of innerwear apparel across multiple regions including the Americas, Europe, and Asia Pacific [4]

Industry Overview - The Zacks Textile – Apparel industry is currently facing challenges due to persistent inflation, supply-chain disruptions, and high selling, general and administrative (SG&A) expenses, which are impacting profitability [1][5] - The industry includes companies that manufacture, design, distribute, and sell apparel, footwear, and accessories for men and women, operating through various distribution channels [3] Current Trends - Consumer caution and a focus on value are evident as inflation and macroeconomic uncertainty lead to muted demand, straining the textile and apparel sector [4] - Persistent cost pressures from elevated input and labor costs, rising SG&A, and freight and tariff volatility are causing ongoing margin pressure [5] - Digital and AI-driven transformation is becoming a key growth driver, with companies leveraging these technologies to improve efficiency and connect with consumers [6] - Brand strength is increasingly important, with companies positioning themselves as lifestyle curators to maintain premium pricing and appeal to younger shoppers [7] Industry Performance - The Zacks Textile – Apparel industry ranks 191, placing it in the bottom 22% of over 250 Zacks industries, indicating dim near-term prospects [8] - The industry's consensus earnings estimate has declined by 8.6% since June 2025, reflecting a negative aggregate earnings outlook [9] - Over the past year, the industry has underperformed the broader Zacks Consumer Discretionary sector and the S&P 500, declining by 16.6% compared to the sector's and S&P 500's growth of 23.9% and 19.8%, respectively [10] Valuation Metrics - The industry is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 11.25X, significantly lower than the S&P 500's 23.36X and the sector's 19.98X [13] Notable Companies - **Ralph Lauren Corporation (RL)**: Focused on brand elevation and digital ecosystems, with a Zacks Rank of 2. The consensus EPS estimate has increased by 8.4% to $14.77, and shares have rallied 36.3% in the past six months [16][17] - **Hanesbrands Inc. (HBI)**: Engaging in a transformation centered on innovation and cost discipline, with a Zacks Rank of 2. The consensus EPS estimate has risen by 24.5% to $0.66, and shares have increased by 3.5% [20][21] - **Guess?, Inc. (GES)**: Advancing a global growth strategy with a focus on brand elevation and operational agility, holding a Zacks Rank of 2. The consensus EPS estimate has jumped by 8.1% to $1.60, with shares surging 36.1% [24][25] - **PVH Corp. (PVH)**: Revitalizing core brands through marketing and international expansion, with a Zacks Rank of 3. The consensus EPS estimate has increased by $0.02 to $0.84, and shares have jumped 28.8% [28][29]

Core Viewpoint - The Ademi Firm is investigating HanesBrands for potential breaches of fiduciary duty and legal violations related to its transaction with Gildan [1] Group 1: Investigation Details - The investigation focuses on possible breaches of fiduciary duty and other legal violations in the transaction between HanesBrands and Gildan [1] - Shareholders of HanesBrands will receive 0.102 shares of Gildan and $0.80 in cash for each share of HanesBrands [1] Group 2: Financial Implications - The total offer for HanesBrands shares is valued at $6 [1]