Hanes(HBI) - 2024 Q2 - Quarterly Results

Supplemental Information Overview Basis of Presentation The report presents revised historical financials reflecting the exit from certain businesses and a new segment structure - The company exited the global Champion and U.S.-based outlet store businesses, now reported as discontinued operations[2] - Reportable segments were realigned into two new segments, U.S. and International, applied retroactively to all periods[2] - The 'Other' category now consists of the U.S. Sheer Hosiery business and certain supply chain sales to European Innerwear[2] Condensed Consolidated Statements of Operations Table 1-A: As Reported (GAAP) GAAP results show a Q1 2024 net loss of $39.1 million, driven by losses from both continuing and discontinued operations Q1 2024 vs Q1 2023 GAAP Performance (in thousands) | Metric | Q1 2024 (Mar 30, 2024) | Q1 2023 (Apr 1, 2023) | Change (YoY) | | :--- | :--- | :--- | :--- | | Net Sales | $778,213 | $884,030 | -12.0% | | Gross Profit | $309,315 | $282,379 | +9.5% | | Operating Profit | $39,108 | $25,544 | +53.1% | | Income (Loss) from Continuing Operations | $(30,610) | $(50,594) | N/A | | Net Income (Loss) | $(39,122) | $(34,404) | N/A | Q1 2024 Diluted Earnings (Loss) Per Share (GAAP) | Category | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Continuing Operations | $(0.09) | $(0.14) | | Discontinued Operations | $(0.02) | $0.05 | | Net Income (Loss) | $(0.11) | $(0.10) | Table 1-B: As Adjusted (Non-GAAP) - Continuing Operations Adjusted results for continuing operations show improved operating profit and a narrower loss compared to the prior year Q1 2024 vs Q1 2023 Adjusted Performance - Continuing Operations (in thousands) | Metric | Q1 2024 (Mar 30, 2024) | Q1 2023 (Apr 1, 2023) | Change (YoY) | | :--- | :--- | :--- | :--- | | Net Sales | $778,213 | $884,030 | -12.0% | | Adjusted Gross Profit | $309,518 | $283,895 | +9.0% | | Adjusted Operating Profit | $54,077 | $28,553 | +89.4% | | Adjusted Income (Loss) from Continuing Operations | $(15,641) | $(40,489) | N/A | Q1 2024 Adjusted Diluted Loss Per Share - Continuing Operations | Category | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Adjusted EPS from Continuing Operations | $(0.04) | $(0.12) | Reconciliation of GAAP to Non-GAAP Measures Table 2-A: Reconciliation for Continuing Operations This section details adjustments for restructuring and other charges to reconcile GAAP to non-GAAP results - The company presents non-GAAP measures to enable additional analyses of operating performance, absent restructuring effects[8] - Key restructuring and action-related charges include supply chain alignment, headcount actions, and technology modernization[7] Reconciliation of Operating Profit - Q1 2024 (in thousands) | Description | Amount | | :--- | :--- | | Operating profit, as reported (GAAP) | $39,108 | | Supply chain restructuring and consolidation | $2,107 | | Headcount actions and related severance | $12,187 | | Technology | $181 | | Professional services | $490 | | Other | $4 | | Operating profit, as adjusted (Non-GAAP) | $54,077 | Table 2-B: Reconciliation for Discontinued Operations Discontinued operations' GAAP results are reconciled to non-GAAP by adjusting for restructuring charges Discontinued Operations Performance - Q1 2024 (in thousands) | Metric | As Reported (GAAP) | Adjustments | As Adjusted (Non-GAAP) | | :--- | :--- | :--- | :--- | | Net Sales | $377,988 | N/A | $377,988 | | Operating Profit | $12,998 | $16,752 | $29,750 | | Income (Loss), net of tax | $(8,512) | $16,752 | $8,240 | Diluted EPS from Discontinued Operations - Q1 2024 | Metric | Amount | | :--- | :--- | | As Reported (GAAP) | $(0.02) | | Restructuring Charges | $0.05 | | As Adjusted (Non-GAAP) | $0.02 | Supplemental Financial Information by Business Segment Segment Performance (Continuing Operations) The U.S. segment drove sales and operating profit, while the International segment saw declines in both metrics Segment Net Sales (in thousands) | Segment | Q1 2024 | Q1 2023 | Change (YoY) | | :--- | :--- | :--- | :--- | | U.S. | $543,891 | $599,884 | -9.3% | | International | $233,549 | $256,339 | -8.9% | | Total Net Sales | $778,213 | $884,030 | -12.0% | Segment Operating Profit (before restructuring charges, in thousands) | Segment | Q1 2024 | Q1 2023 | Change (YoY) | | :--- | :--- | :--- | :--- | | U.S. | $98,263 | $66,607 | +47.5% | | International | $20,498 | $22,544 | -9.1% | Impact of Foreign Currency and Organic Constant Currency Currency and Organic Growth Analysis (Q1 2024) Foreign currency and divestitures impacted reported sales, with organic constant currency sales declining by 8.2% Q1 2024 Net Sales Growth Reconciliation (YoY) | Metric | % Change | | :--- | :--- | | As Reported (GAAP) | (12.0)% | | Constant Currency | (10.2)% | | Organic Constant Currency | (8.2)% | Q1 2024 Impact of Foreign Currency (in thousands) | Metric | As Reported | Impact from Foreign Currency | Constant Currency | | :--- | :--- | :--- | :--- | | Net Sales | $778,213 | $(15,364) | $793,577 | | Gross Profit | $309,315 | $(9,270) | $318,585 | | Operating Profit | $39,108 | $(3,090) | $42,198 | - The company sold its U.S. Sheer Hosiery business on September 29, 2023, and its impact is removed for organic growth[20]