Hanesbrands' (HBI) Global Champion Business Sale to Fuel Growth

Company Overview - Hanesbrands Inc. (HBI) is focused on accelerating growth by revitalizing its innerwear business, increasing market share, attracting younger consumers, and strengthening its operating model [2] - The company has entered into a deal to sell the intellectual property and certain operating assets of its global Champion business to Authentic Brands Group for $1.2 billion, with net proceeds expected to be nearly $900 million [2][8] Financial Performance - The adjusted operating margin for Hanesbrands stood at 7.3%, reflecting an increase of nearly 270 basis points [4] - In the first quarter of 2024, the adjusted gross margin was reported at 39.9%, up nearly 720 basis points, driven by reduced input costs and cost-saving initiatives [11] - Adjusted SG&A expenses declined by 3% to $378 million due to disciplined expense management and reduced distribution expenses [11] Strategic Initiatives - Management has streamlined the supply chain and eliminated fixed costs exceeding $200 million, with half of this amount being part of SG&A [3] - The company aims to enhance its position in the innerwear category and achieve above-market growth through consumer-centric product innovation and increased investments in leading brands such as Hanes, Bonds, Maidenform, and Bali [2] Future Outlook - Management anticipates operating profit and earnings per share to increase year over year in the second quarter and full-year 2024, despite expectations of soft sales [4] - The foundational financial model of Hanesbrands has been robust, characterized by healthy margins and steady cash generation, with ongoing enhancements in brand building, data analytics, inventory management, and SKU discipline [10]