Hanes(US:HBI)2025-11-06 12:03Financial 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]