Raises Full-Year and Fourth-Quarter Operating
Profit, EPS, and Cash Flow Outlook
On Track to Pay Down $1 Billion of Debt in
Second-Half 2024
- Reports net sales at the mid-point of expected range with
operating profit and earnings per share (EPS) above the high-end of
expected range.
- Raises full-year and fourth-quarter 2024 operating profit,
earnings per share, and operating cash flow guidance due to
year-to-date performance and strong visibility to continued margin
improvement. Expects net sales at the mid-point of its prior
guidance range.
- Net sales were $937 million; consistent with prior year on an
organic constant currency basis.
- GAAP and Adjusted gross margins were 41.7% and 41.8%,
respectively, an increase of 530 and 525 basis points,
respectively, compared to prior year.
- GAAP and Adjusted operating margins were 11.0% and 13.0%,
respectively, an increase of 255 and 435 basis points,
respectively, compared to prior year.
- Increased GAAP and Adjusted EPS 550% and 850%, respectively,
compared to prior year.
- Generated cash flow from operations of $92 million in the
quarter and $197 million year-to-date.
- Further reduced leverage to 4.3 times net debt-to-adjusted
EBITDA, 1.2 times lower than prior year.
- Completed sale of the global Champion business, subsequent to
the third-quarter. On track to pay down approximately $1 billion of
debt in the second-half of 2024, with approximately $870 million
paid down as of the end of October.
HanesBrands Inc. (NYSE: HBI), a global leader in iconic apparel
brands, today announced results for the third-quarter 2024.
“We delivered another strong quarter with operating profit,
earnings per share, and cash flow results that exceeded our
expectations. In addition, we have further reduced our leverage,
expect a return to revenue growth in the fourth quarter, and raised
our full-year outlook for profit and cash flow,” said Steve
Bratspies, CEO. “Our strategic actions to create a more focused,
simplified business are working. We are driving a step-function
change in our cost structure, increasing operational efficiencies,
reducing inventory, and freeing up capital to invest in growth. We
expect the benefits of these actions to ramp over the next several
quarters, giving us visibility and confidence to deliver continued
margin improvement, cash generation, and debt reduction through
2025.”
Third-Quarter 2024
Results
Net Sales from continuing operations were $937
million.
- Net sales decreased 2.5% compared to the prior year, with
approximately 180 basis points due to the divestiture in the prior
year of the U.S. Sheer Hosiery business and approximately 75 basis
points due to the unfavorable impact from foreign exchange
rates.
- On an organic constant currency basis, net sales were
consistent with prior year (Table 2-B).
Gross Profit and Gross Margin increased year-over-year
driven by lower input costs as the Company continues to anniversary
the impact from peak inflation, the benefits from its cost savings
initiatives, and the benefits from its assortment management
initiative.
- In the quarter, the Company continued its consolidation and
other optimization actions in its supply chain to lower fixed cost,
increase efficiencies, and further improve customer service and
in-stocks with lower levels of inventory. The Company expects these
actions to drive continued benefits in the fourth quarter 2024 and
through 2025.
- Gross Profit and Adjusted Gross Profit were $390 million and
$392 million, respectively, an increase over prior year of 12% and
11%, respectively.
- Gross Margin and Adjusted Gross Margin increased approximately
530 and 525 basis points, respectively, to 41.7% and 41.8%,
respectively.
- Adjusted Gross Profit and Adjusted Gross Margin exclude certain
costs related to restructuring and other action-related charges
(Table 6-A).
Selling, General and Administrative (SG&A) Expenses,
as a percentage of net sales, increased over prior year driven
primarily by a 150 basis point increase in brand investments, which
was partially offset by benefits from cost savings initiatives and
disciplined expense management.
- In the quarter, the Company accelerated strategic actions to
improve its processes. These actions are driving a step-function
change in the Company’s cost structure, including reducing
corporate headcount and overhead, to lower fixed cost and fund
growth-related investments in its brands. The Company expects the
savings from these actions to continue to build over the next
several quarters.
- SG&A Expenses were $287 million, or 30.7% of net sales,
which represents an increase over prior year of 7% and 270 basis
points, respectively.
- Adjusted SG&A Expenses were $269 million, or 28.7% of net
sales, which represents an increase of nearly 1% and 90 basis
points, respectively.
- Adjusted SG&A Expenses exclude certain costs related to
restructuring and other action-related charges (Table 6-A).
Operating Profit and Operating Margin increased over
prior year driven by gross margin improvement, which supported a
150 basis point increase in brand investments.
- Operating Profit increased 27% to $103 million and Operating
Margin increased 255 basis points to 11.0% as compared to prior
year.
- Adjusted Operating Profit increased 46% to $122 million and
Adjusted Operating Margin increased 435 basis points to 13.0% as
compared to prior year.
- Adjusted Operating Profit and Adjusted Operating Margin exclude
certain costs related to restructuring and other action-related
charges (Table 6-A).
Interest Expense and Other Expenses of $58 million
decreased approximately $8 million as compared to prior year. The
decrease was driven by lower interest expense as a result of lower
debt balances.
Tax Expense was $13 million as compared to $21 million in
the prior year period.
- Effective Tax Rate was 27.9% as compared to 139.1% in
third-quarter 2023.
- Adjusted Tax Rate was 19.5% as compared to 141.8% last
year.
- The Company's effective tax rate for 2024 and 2023 is not
reflective of the U.S. statutory rate due to valuation allowances
against certain net deferred tax assets.
Income from continuing operations totaled $32 million, or
$0.09 per diluted share in third-quarter 2024. This compares to a
loss from continuing operations of $(6) million, or $(0.02) per
diluted share, in third-quarter 2023. Adjusted Income from
continuing operations totaled $52 million, or $0.15 per diluted
share. This compares to an adjusted loss from continuing operations
of $(8) million, or $(0.02) per diluted share, in third-quarter
2023.
See the Note on Adjusted Measures and Reconciliation to GAAP
Measures later in this news release for additional discussion and
details of actions, which include restructuring and other
action-related charges.
Third-Quarter 2024 Business Segment
Summary
- U.S. net sales decreased 1% as compared to prior year.
Despite the anticipated total market decline in the quarter, the
Company’s strategy of consumer-centricity is working. The Company’s
point-of-sale trends have outperformed the total market
year-to-date as increased brand investments and product innovation
in its Hanes, Maidenform and Bali brands are driving permanent
retail space and market share gains, particularly with younger
consumers. Operating margin of 22.1% increased approximately 665
basis points over prior year. The increase was driven by lower
input costs, favorable product mix, and benefits from cost savings
initiatives, which helped fund a 55% increase in brand investments
to drive consumer demand behind new product innovation in both
Men’s and Women’s.
- International net sales increased 1% on a reported
basis, which included a $7 million headwind from unfavorable
foreign exchange rates. International sales increased 4% on a
constant currency basis compared to prior year as sales grew in the
Americas and Asia and were consistent with prior year in Australia
as the Company begins to anniversary the worst of Australia’s
macroeconomic-driven headwinds. Operating margin of 14.2% increased
approximately 465 basis points compared to prior year driven
primarily by lower input costs and benefits from cost savings
initiatives.
Cash Flow, Balance Sheet and
Liquidity
- Total liquidity position at the end of third-quarter
2024 was more than $1.4 billion, consisting of $317 million of cash
and equivalents and approximately $1.1 billion of available
capacity under the Company’s credit facilities.
- Based on the calculation as defined in the Company’s senior
secured credit facility, the Leverage Ratio at the end of
third-quarter 2024 was 4.3 times on a net debt-to-adjusted EBITDA
basis, which was below its third-quarter 2024 covenant of 6.63
times and below prior year’s 5.5 times (See Table 6-B). Subsequent
to the end of third-quarter 2024, the Company paid down an
additional approximately $870 million of debt in October 2024.
- Inventory at the end of third-quarter 2024 of $928
million decreased 13%, or $138 million, year-over-year. The
year-over-year decrease was driven predominantly by the benefits of
its inventory management capabilities, including SKU discipline and
lifecycle management, lower input costs as the Company continued to
anniversary the impact from peak inflation, and improving sales
trends.
- Cash Flow from Operations was $197 million year-to-date
at the end of the third-quarter 2024 as compared to $287 million
last year. Free Cash Flow year-to-date was $165 million at
the end of the third-quarter 2024 as compared to $252 million last
year.
Closes Sale of Global Champion
Business
Subsequent to the end of the third-quarter 2024 and as
previously announced on September 30, 2024, the Company completed
the sale of the intellectual property and certain operating assets
of the global Champion business to Authentic Brands Group.
Fourth-Quarter and Full-Year 2024
Financial Outlook
Guidance metrics are based on continuing operations.
The Company is providing guidance on tax expense due to the
expected fluctuation of its quarterly tax rate, stemming from the
deferred tax reserve matter previously disclosed in fourth-quarter
2022. Importantly, the reserve does not impact cash taxes. Some
portion of the reserve may reverse in future periods.
The Company closed the sale of its U.S. Sheer Hosiery business
on September 29, 2023. For the full year 2023, its U.S. Sheer
Hosiery business generated $50 million of net sales and an
operating loss of $(2) million.
For fiscal year 2024, which ends on December 28, 2024, the
Company currently expects:
- Net sales from continuing operations of approximately $3.61
billion, which includes projected headwinds of approximately $50
million from last year’s U.S. Sheer Hosiery divestiture and
approximately $42 million from changes in foreign currency exchange
rates. This represents an approximate 4% decrease as compared to
prior year on a reported basis and an approximate 2% decrease on an
organic constant currency basis.
- GAAP operating profit from continuing operations of
approximately $174 million.
- Adjusted operating profit from continuing operations of
approximately $417 million, which includes a projected headwind of
approximately $8 million from changes in foreign currency exchange
rates.
- Pretax charges for restructuring and other action-related
charges of approximately $243 million.
- GAAP and Adjusted Interest expense of approximately $195
million, which reflects the pay down of debt from the use of net
proceeds from the Champion sale and internal cash generation.
- GAAP Other expenses of approximately $53 million, which
includes approximately $10 million of accelerated amortization of
debt issuance costs. Adjusted Other expenses of approximately $43
million.
- GAAP and Adjusted Tax expense of approximately $40 million,
which includes a net tax benefit primarily related to a release of
certain tax reserves.
- GAAP loss per share from continuing operations of approximately
$(0.32).
- Adjusted earnings per share from continuing operations of
approximately $0.39.
- Cash flow from operations of approximately $250 million.
- Capital investments of approximately $50 million, consisting of
approximately $40 million of capital expenditures and approximately
$10 million of cloud computing arrangements. Per GAAP, capital
expenditures are reflected in cash from investing activities and
certain cloud computing arrangements are reflected in Other Assets
within cash flow from operating activities. The approximate $10
million of cloud computing arrangements is factored into the full
year cash flow from operations guidance of approximately $250
million.
- Free cash flow of approximately $210 million.
- Fully diluted shares outstanding of approximately 355
million.
For fourth-quarter 2024, which ends on December 28, 2024, the
Company currently expects:
- Net sales from continuing operations of approximately $900
million, which includes projected headwind of approximately $4
million from changes in foreign currency exchange rates. This
represents an approximate 2% increase as compared to prior year on
a reported basis and an approximate 3% increase on an organic
constant currency basis.
- GAAP operating profit from continuing operations of
approximately $95 million.
- Adjusted operating profit from continuing operations of
approximately $115 million, which includes a projected headwind of
approximately $1 million from changes in foreign currency exchange
rates.
- Pretax charges for restructuring and other action-related
charges of approximately $20 million.
- GAAP and Adjusted Interest expense of approximately $45
million, which reflects the pay down of debt from the use of net
proceeds from the Champion sale and internal cash generation.
- GAAP Other expenses of approximately $24 million, which
includes approximately $10 million of accelerated amortization of
debt issuance costs. Adjusted Other expenses of approximately $14
million.
- GAAP and Adjusted Tax expense of approximately $5 million,
which includes a net tax benefit primarily related to a release of
certain tax reserves.
- GAAP earnings per share from continuing operations of
approximately $0.06.
- Adjusted earnings per share from continuing operations of
approximately $0.14.
- Fully diluted shares outstanding of approximately 357
million.
HanesBrands has updated its quarterly frequently-asked-questions
document, which is available at www.Hanes.com/FAQ.
Note on Adjusted Measures and
Reconciliation to GAAP Measures
To supplement financial results prepared in accordance with
generally accepted accounting principles, the Company provides
quarterly and full-year results concerning certain non‐GAAP
financial measures, including adjusted diluted earnings (loss) per
share from continuing operations, adjusted income (loss) from
continuing operations, adjusted income tax expense, adjusted income
(loss) from continuing operations before income taxes, adjusted
operating profit (and margin), adjusted SG&A, adjusted gross
profit (and margin), EBITDA, adjusted EBITDA, adjusted effective
tax rate, adjusted interest expense and adjusted other expenses,
net debt, leverage ratio and free cash flow.
Adjusted EPS is defined as diluted earnings (loss) per share
from continuing operations excluding actions and the tax effect on
actions. Adjusted income (loss) from continuing operations is
defined as income (loss) from continuing operations excluding
actions and the tax effect on actions. Adjusted tax expense is
defined as income tax expense excluding actions. Adjusted income
(loss) from continuing operations before income taxes is defined as
income (loss) from continuing operations before income tax
excluding actions. Adjusted operating profit is defined as
operating profit excluding actions. Adjusted SG&A is defined as
selling, general and administrative expenses excluding actions.
Adjusted gross profit is defined as gross profit excluding actions.
Adjusted interest expense is defined as interest expense excluding
actions. Adjusted other expenses is defined as other expenses
excluding actions and adjusted tax rate is defined as adjusted tax
expense divided by adjusted income (loss) from continuing
operations before income tax.
Charges for actions taken in 2024 and 2023, as applicable,
include the supply chain restructuring and consolidation, corporate
asset impairment, headcount actions and related severance charges,
professional services, technology charges, gain/loss on sale of
business and classification of assets held for sale, loss on
extinguishment of debt, gain on final settlement of cross currency
swap contracts and the tax effects thereof.
While these costs are not expected to continue for any singular
transaction on an ongoing basis, similar types of costs, expenses
and charges have occurred in prior periods and may recur in future
periods depending upon future business plans and circumstances.
HanesBrands has chosen to present these non‐GAAP measures to
investors to enable additional analyses of past, present and future
operating performance and as a supplemental means of evaluating
operations absent the effect of our supply chain restructuring and
consolidation and other actions that are deemed to be material
stand-alone initiatives apart from the Company’s core operations.
HanesBrands believes these non-GAAP measures provide management and
investors with valuable supplemental information for analyzing the
operating performance of the Company’s ongoing business during each
period presented without giving effect to costs associated with the
execution of any of the aforementioned actions taken.
The Company has also chosen to present EBITDA and adjusted
EBITDA to investors because it considers these measures to be an
important supplemental means of evaluating operating performance.
EBITDA is defined as net income (loss) before the impacts of
discontinued operations, interest, taxes, depreciation and
amortization. Adjusted EBITDA is defined as EBITDA excluding (x)
restructuring charges related to our supply chain restructuring and
consolidation, and other action-related charges described in more
detail in Table 6-A and (y) certain other losses, charges and
expenses as defined in the Consolidated Net Total Leverage Ratio
under its Fifth Amended and Restated Credit Agreement, dated
November 19, 2021, as amended (the “Credit Agreement”) described in
more detail in Table 6-B. HanesBrands believes that EBITDA and
adjusted EBITDA are frequently used by securities analysts,
investors and other interested parties in the evaluation of
companies in the industry, and management uses EBITDA and adjusted
EBITDA for planning purposes in connection with setting its capital
allocation strategy. EBITDA and adjusted EBITDA should not,
however, be considered as measures of discretionary cash available
to invest in the growth of the business.
Net debt is defined as the total of current debt, long-term
debt, and borrowings under the accounts receivable securitization
facility (excluding long-term debt issuance costs and debt discount
and borrowings of unrestricted subsidiaries under the accounts
receivable securitization facility) less (x) other debt and cash
adjustments and (y) cash and cash equivalents. Leverage ratio is
the ratio of net debt to adjusted EBITDA as it is defined in our
Credit Agreement.
The Company defines free cash flow as net cash from operating
activities less capital expenditures. Management believes that free
cash flow, which measures our ability to generate additional cash
from our business operations, is an important financial measure for
use in evaluating the Company's financial performance. The Company
defines organic net sales as net sales excluding those derived from
businesses acquired or divested within the previous 12 months of
the reporting date.
HanesBrands is a global company that reports financial
information in U.S. dollars in accordance with GAAP. As a
supplement to the Company’s reported operating results, HanesBrands
also presents constant-currency financial information, which is a
non-GAAP financial measure that excludes the impact of translating
foreign currencies into U.S. dollars. The Company uses constant
currency information to provide a framework to assess how the
business performed excluding the effects of changes in the rates
used to calculate foreign currency translation.
To calculate foreign currency translation on a constant currency
basis, operating results for the current-year period for entities
reporting in currencies other than the U.S. dollar are translated
into U.S. dollars at the average exchange rates in effect during
the comparable period of the prior year (rather than the actual
exchange rates in effect during the current year period).
HanesBrands believes constant currency information is useful to
management and investors to facilitate comparison of operating
results and better identify trends in the Company’s businesses. The
Company defines organic constant currency sales as net sales
excluding those derived from businesses acquired or divested within
the previous 12 months of the reporting date and also excluding the
impact of translating foreign currencies into U.S. dollars as
discussed above.
Non‐GAAP financial measures have limitations as analytical tools
and should not be considered in isolation or as an alternative to,
or substitute for, financial results prepared in accordance with
GAAP. Further, the non-GAAP measures presented may be different
from non-GAAP measures with similar or identical names presented by
other companies.
Reconciliations of these non-GAAP measures to the most directly
comparable GAAP financial measures are presented in the
supplemental financial information included with this news
release.
Cautionary Statement Concerning Forward-Looking
Statements
This news release contains certain information that may
constitute forward-looking statements, as defined under U.S.
federal securities laws. Forward-looking statements include all
statements that do not relate solely to historical or current
facts, and can generally be identified by the use of words such as
“may,” “believe,” “could,” “will,” “expect,” “outlook,”
“potential,” “project,” “estimate,” “future,” “intend,”
“anticipate,” “plan,” “continue” or similar expressions. However,
the absence of these words or similar expressions does not mean
that a statement is not forward-looking. All statements with
respect to our intent, belief and current expectations about our
strategic direction, prospects and future results are
forward-looking statements and are subject to risks and
uncertainties that could cause actual results to differ materially
from those implied or expressed by such statements. These risks and
uncertainties include, but are not limited to, our ability to
realize the expected benefits from the sale of the global Champion
business, which was completed subsequent to our third quarter on
September 30, 2024; our ability to successfully operate the
Champion business in certain sectors and geographies through a
transition period ending on January 31, 2025, and to execute, and
realize the expected benefits, successfully, or at all, from the
sale of certain remaining assets of the global Champion business at
the end of this transition period; our ability to successfully
implement our strategic plans, including our supply chain
restructuring and consolidation and other cost savings initiatives;
trends associated with our business; the rapidly changing retail
environment and the level of consumer demand; the effects of any
geopolitical conflicts (including the ongoing Russia-Ukraine
conflict and Middle East conflicts) or public health emergencies or
severe global health crises, including effects on consumer
spending, global supply chains, critical supply routes and the
financial markets; our ability to deleverage on the anticipated
time frame or at all, which could negatively impact our ability to
satisfy the financial covenants in our Credit Agreement or other
contractual arrangements; any inadequacy, interruption, integration
failure or security failure with respect to our information
technology; future intangible assets or goodwill impairment due to
changes in our business, market conditions, or other factors,
including the sale of the global Champion business, significant
fluctuations in foreign exchange rates; legal, regulatory,
political and economic risks related to our international
operations; our ability to effectively manage our complex
international tax structure; our future financial performance; and
other risks identified from time to time in our most recent
Securities and Exchange Commission reports, including our annual
report on Form 10-K and quarterly reports on Form 10-Q. Since it is
not possible to predict or identify all of the risks, uncertainties
and other factors that may affect future results, the above list
should not be considered a complete list. Any forward-looking
statement speaks only as of the date on which such statement is
made, and HanesBrands undertakes no obligation to update or revise
any forward-looking statement, whether as a result of new
information, future events or otherwise, other than as required by
law.
About HanesBrands
HanesBrands (NYSE: HBI) is a global leader in manufacturing
basics and Innerwear brands that are synonymous with comfort,
quality, and value, and have been trusted by consumers around the
world for generations. Among the company’s iconic brands are Hanes,
the leading basic apparel brand in the U.S.; Bonds, an Australian
staple since 1915 that is setting new standards for design and
innovation; Maidenform, America’s number one shapewear brand; and
Bali, America’s number one national bra brand in the U.S.
Hanesbrands owns the majority of its worldwide manufacturing
facilities and has built a strong reputation for workplace quality
and ethical business practices.
TABLE 1
HANESBRANDS INC.
Condensed Consolidated
Statements of Operations
(in thousands, except per
share data)
(Unaudited)
Quarters Ended
Nine Months Ended
September 28,
2024
September 30,
2023
% Change
September 28,
2024
September 30,
2023
% Change
Net sales
$
937,103
$
961,294
(2.5
)%
$
2,710,709
$
2,880,328
(5.9
)%
Cost of sales
546,663
611,513
1,703,881
1,891,375
Gross profit
390,440
349,781
11.6
%
1,006,828
988,953
1.8
%
As a % of net sales
41.7
%
36.4
%
37.1
%
34.3
%
Selling, general and administrative
expenses
287,442
268,751
7.0
%
927,851
812,446
14.2
%
As a % of net sales
30.7
%
28.0
%
34.2
%
28.2
%
Operating profit
102,998
81,030
27.1
%
78,977
176,507
(55.3
)%
As a % of net sales
11.0
%
8.4
%
2.9
%
6.1
%
Other expenses
9,505
9,079
29,519
31,056
Interest expense, net
48,606
56,648
149,511
160,586
Income (loss) from continuing operations
before income taxes
44,887
15,303
(100,053
)
(15,135
)
Income tax expense
12,508
21,280
34,723
50,286
Income (loss) from continuing
operations
32,379
(5,977
)
(134,776
)
(65,421
)
Loss from discontinued operations, net of
tax
(2,428
)
(32,822
)
(172,775
)
(30,246
)
Net income (loss)
$
29,951
$
(38,799
)
$
(307,551
)
$
(95,667
)
Earnings (loss) per share - basic:
Continuing operations
$
0.09
$
(0.02
)
$
(0.38
)
$
(0.19
)
Discontinued operations
(0.01
)
(0.09
)
(0.49
)
(0.09
)
Net income (loss)
$
0.09
$
(0.11
)
$
(0.87
)
$
(0.27
)
Earnings (loss) per share - diluted:
Continuing operations
$
0.09
$
(0.02
)
$
(0.38
)
$
(0.19
)
Discontinued operations
(0.01
)
(0.09
)
(0.49
)
(0.09
)
Net income (loss)
$
0.08
$
(0.11
)
$
(0.87
)
$
(0.27
)
Weighted average shares outstanding:
Basic
352,107
350,667
351,891
350,534
Diluted
354,839
350,667
351,891
350,534
TABLE 2-A
HANESBRANDS INC.
Supplemental Financial
Information
Impact of Foreign
Currency
(in thousands, except per
share data)
(Unaudited)
The following tables present a
reconciliation of reported results on a constant currency basis for
the quarter and nine months ended September 28, 2024 and a
comparison to prior year:
Quarter Ended September 28,
2024
As Reported
Impact from Foreign
Currency1
Constant Currency
Quarter Ended
September 30, 2023
% Change,
As Reported
% Change,
Constant Currency
As reported under GAAP:
Net sales
$
937,103
$
(7,270
)
$
944,373
$
961,294
(2.5
)%
(1.8
)%
Gross profit
390,440
(1,556
)
391,996
349,781
11.6
12.1
Operating profit
102,998
(134
)
103,132
81,030
27.1
27.3
Diluted earnings (loss) per share from
continuing operations3
$
0.09
$
0.00
$
0.09
$
(0.02
)
550.0
%
550.0
%
As adjusted:2
Net sales
$
937,103
$
(7,270
)
$
944,373
$
961,294
(2.5
)%
(1.8
)%
Gross profit
391,557
(1,556
)
393,113
351,310
11.5
11.9
Operating profit
122,166
(134
)
122,300
83,740
45.9
46.0
Diluted earnings (loss) per share from
continuing operations3
$
0.15
$
0.00
$
0.15
$
(0.02
)
850.0
%
850.0
%
1
Effect of the change in foreign currency
exchange rates year-over-year. Calculated by applying prior period
exchange rates to the current year financial results.
2
Results for the quarters ended September
28, 2024 and September 30, 2023 reflect adjustments for
restructuring and other action-related charges. See "Reconciliation
of Select GAAP Measures to Non-GAAP Measures" in Table 6-A.
3
Amounts may not be additive due to
rounding.
Nine Months Ended September
28, 2024
As Reported
Impact from Foreign
Currency1
Constant Currency
Nine Months Ended
September 30, 2023
% Change,
As Reported
% Change,
Constant Currency
As reported under GAAP:
Net sales
$
2,710,709
$
(37,828
)
$
2,748,537
$
2,880,328
(5.9
)%
(4.6
)%
Gross profit
1,006,828
(19,908
)
1,026,736
988,953
1.8
3.8
Operating profit
78,977
(6,820
)
85,797
176,507
(55.3
)
(51.4
)
Diluted loss per share from continuing
operations3
$
(0.38
)
$
(0.01
)
$
(0.37
)
$
(0.19
)
(100.0
)%
(94.7
)%
As adjusted:2
Net sales
$
2,710,709
$
(37,828
)
$
2,748,537
$
2,880,328
(5.9
)%
(4.6
)%
Gross profit
1,096,769
(19,908
)
1,116,677
992,234
10.5
12.5
Operating profit
302,369
(6,820
)
309,189
198,921
52.0
55.4
Diluted earnings (loss) per share from
continuing operations3
$
0.25
$
(0.01
)
$
0.26
$
(0.11
)
327.3
%
336.4
%
1
Effect of the change in foreign currency
exchange rates year-over-year. Calculated by applying prior period
exchange rates to the current year financial results.
2
Results for the nine months ended
September 28, 2024 and September 30, 2023 reflect adjustments for
restructuring and other action-related charges. See "Reconciliation
of Select GAAP Measures to Non-GAAP Measures" in Table 6-A.
3
Amounts may not be additive due to
rounding.
TABLE 2-B
HANESBRANDS INC.
Supplemental Financial
Information
Organic Constant
Currency
(in thousands, except per
share data)
(Unaudited)
The following tables present a
reconciliation of reported results on an organic constant currency
basis for the quarter and nine months ended September 28, 2024 and
a comparison to prior year:
Quarter Ended September 28,
2024
Quarter Ended September 30,
2023
As Reported
Impact from Foreign
Currency1
Less U.S. Hosiery
Divestiture2
Organic Constant
Currency
As Reported
Less U.S. Hosiery
Divestiture2
Organic
% Change,
As Reported
% Change,
Organic Constant
Currency
Net sales
$
937,103
$
(7,270
)
$
—
$
944,373
$
961,294
$
17,303
$
943,991
(2.5
)%
0.0
%
1
Effect of the change in foreign
currency exchange rates year-over-year. Calculated by applying
prior period exchange rates to the current year financial
results.
2
The Company sold its U.S. Sheer
Hosiery business on September 29, 2023.
Nine Months Ended September
28, 2024
Nine Months Ended September
30, 2023
As Reported
Impact from Foreign
Currency1
Less U.S. Hosiery
Divestiture2
Organic Constant
Currency
As Reported
Less U.S. Hosiery
Divestiture2
Organic
% Change,
As Reported
% Change,
Organic Constant
Currency
Net sales
$
2,710,709
$
(37,828
)
$
—
$
2,748,537
$
2,880,328
$
50,358
$
2,829,970
(5.9
)%
(2.9
)%
1
Effect of the change in foreign currency
exchange rates year-over-year. Calculated by applying prior period
exchange rates to the current year financial results.
2
The Company sold its U.S. Sheer Hosiery
business on September 29, 2023.
TABLE 3
HANESBRANDS INC.
Supplemental Financial
Information
By Business Segment
(in thousands)
(Unaudited)
Quarters Ended
Nine Months Ended
September 28,
2024
September 30,
2023
% Change
September 28,
2024
September 30,
2023
% Change
Segment net sales:
U.S.
$
678,345
$
684,990
(1.0
)%
$
1,962,390
$
2,035,923
(3.6
)%
International
259,146
255,784
1.3
747,234
776,529
(3.8
)
Other
(388
)
20,520
(101.9
)
1,085
67,876
(98.4
)
Total net sales
$
937,103
$
961,294
(2.5
)%
$
2,710,709
$
2,880,328
(5.9
)%
Segment operating profit:
U.S.
$
149,637
$
105,579
41.7
%
$
406,114
$
297,340
36.6
%
International
36,893
24,570
50.2
87,933
68,815
27.8
Other
(1,989
)
342
(681.6
)
(1,438
)
130
(1,206.2
)
General corporate expenses/other
(62,375
)
(46,751
)
33.4
(190,240
)
(167,364
)
13.7
Total operating profit before
restructuring and other action-related charges
122,166
83,740
45.9
302,369
198,921
52.0
Restructuring and other action-related
charges
(19,168
)
(2,710
)
607.3
(223,392
)
(22,414
)
896.7
Total operating profit
$
102,998
$
81,030
27.1
%
$
78,977
$
176,507
(55.3
)%
Quarters Ended
Nine Months Ended
September 28,
2024
September 30,
2023
Basis Points Change
September 28,
2024
September 30,
2023
Basis Points Change
Segment operating margin:
U.S.
22.1
%
15.4
%
665
20.7
%
14.6
%
609
International
14.2
9.6
463
11.8
8.9
291
Other
512.6
1.7
51,096
(132.5
)
0.2
(13,273
)
General corporate expenses/other
(6.7
)
(4.9
)
(179
)
(7.0
)
(5.8
)
(121
)
Total operating margin before
restructuring and other action-related charges
13.0
8.7
433
11.2
6.9
425
Restructuring and other action-related
charges
(2.0
)
(0.3
)
(176
)
(8.2
)
(0.8
)
(746
)
Total operating margin
11.0
%
8.4
%
256
2.9
%
6.1
%
(321
)
TABLE 4
HANESBRANDS INC.
Condensed Consolidated Balance
Sheets
(in thousands)
(Unaudited)
September 28,
2024
December 30,
2023
September 30,
2023
Assets
Cash and cash equivalents
$
317,301
$
185,717
$
172,787
Trade accounts receivable, net
505,614
451,052
572,744
Inventories
927,754
972,654
1,066,161
Other current assets
187,541
117,057
155,289
Current assets held for sale
401,492
549,735
628,775
Total current assets
2,339,702
2,276,215
2,595,756
Property, net
198,006
354,410
356,474
Right-of-use assets
255,799
281,898
279,417
Trademarks and other identifiable
intangibles, net
954,945
959,851
928,425
Goodwill
667,468
664,805
650,263
Deferred tax assets
19,740
18,176
5,267
Other noncurrent assets
120,333
139,151
148,464
Noncurrent assets held for sale
905,605
945,808
949,222
Total assets
$
5,461,598
$
5,640,314
$
5,913,288
Liabilities
Accounts payable
$
684,838
$
580,285
$
628,765
Accrued liabilities
544,071
421,805
432,553
Lease liabilities
71,604
70,490
70,701
Accounts Receivable Securitization
Facility
—
6,000
200,500
Current portion of long-term debt
59,000
59,000
59,000
Current liabilities held for sale
215,949
252,988
263,759
Total current liabilities
1,575,462
1,390,568
1,655,278
Long-term debt
3,211,248
3,235,640
3,310,256
Lease liabilities - noncurrent
231,262
239,686
234,149
Pension and postretirement benefits
89,385
103,456
107,129
Other noncurrent liabilities
104,356
123,918
201,859
Noncurrent liabilities held for sale
100,541
127,693
130,581
Total liabilities
5,312,254
5,220,961
5,639,252
Stockholders’ equity
Preferred stock
—
—
—
Common stock
3,518
3,501
3,500
Additional paid-in capital
371,966
353,367
348,837
Retained earnings
247,365
554,796
476,796
Accumulated other comprehensive loss
(473,505
)
(492,311
)
(555,097
)
Total stockholders’ equity
149,344
419,353
274,036
Total liabilities and stockholders’
equity
$
5,461,598
$
5,640,314
$
5,913,288
TABLE 5
HANESBRANDS INC.
Condensed Consolidated
Statements of Cash Flows
(in thousands)
(Unaudited)
Quarters Ended
Nine Months Ended
September 28,
2024(1)
September 30,
2023(1)
September 28,
2024(1)
September 30,
2023(1)
Operating Activities:
Net income (loss)
$
29,951
$
(38,799
)
$
(307,551
)
$
(95,667
)
Adjustments to reconcile net income (loss)
to net cash from operating activities:
Depreciation
18,528
20,543
58,506
56,246
Amortization of acquisition
intangibles
1,924
4,133
10,127
12,478
Other amortization
1,997
3,458
8,195
9,856
Impairment of long-lived assets and
goodwill
142
—
76,746
—
Inventory write-down charges (recoveries),
net
(4,135
)
—
113,528
—
Loss on extinguishment of debt
—
—
—
8,466
(Gain) loss on sale of business and
classification of assets held for sale
(741
)
(1,558
)
50,330
3,641
Amortization of debt issuance costs and
debt discount
2,543
2,338
7,648
6,577
Other
11,559
(2,853
)
25,281
8,984
Changes in assets and liabilities:
Accounts receivable
(32,119
)
(34,502
)
(86,606
)
12,169
Inventories
97,686
311,636
55,836
444,592
Other assets
(12,420
)
15,784
(12,886
)
(20,833
)
Accounts payable
(48,972
)
(164,440
)
85,057
(125,411
)
Accrued pension and postretirement
benefits
(2,878
)
1,241
(2,617
)
4,181
Accrued liabilities and other
29,150
38,130
115,218
(37,935
)
Net cash from operating activities
92,215
155,111
196,812
287,344
Investing Activities:
Capital expenditures
(4,088
)
(2,220
)
(32,179
)
(35,790
)
Proceeds from sales of assets
8,683
66
12,336
172
Proceeds from (payments for) disposition
of business
(12,000
)
1,300
(12,000
)
1,300
Other
—
—
—
18,941
Net cash from investing activities
(7,405
)
(854
)
(31,843
)
(15,377
)
Financing Activities:
Borrowings on Term Loan Facilities
—
—
—
891,000
Repayments on Term Loan Facilities
—
(14,750
)
(29,500
)
(29,500
)
Borrowings on Accounts Receivable
Securitization Facility
630,500
677,500
1,611,000
1,728,500
Repayments on Accounts Receivable
Securitization Facility
(630,500
)
(626,000
)
(1,617,000
)
(1,737,500
)
Borrowings on Revolving Loan
Facilities
4,500
639,000
613,500
1,616,500
Repayments on Revolving Loan
Facilities
(4,500
)
(820,000
)
(613,500
)
(1,908,500
)
Borrowings on Senior Notes
—
—
—
600,000
Repayments on Senior Notes
—
—
—
(1,436,884
)
Payments to amend and refinance credit
facilities
(33
)
(268
)
(712
)
(28,503
)
Other
(132
)
(92
)
(3,949
)
(2,884
)
Net cash from financing activities
(165
)
(144,610
)
(40,161
)
(307,771
)
Effect of changes in foreign exchange
rates on cash
9,565
(10,388
)
(3,398
)
(11,518
)
Change in cash and cash equivalents
94,210
(741
)
121,410
(47,322
)
Cash and cash equivalents at beginning of
period
232,701
191,832
205,501
238,413
Cash and cash equivalents at end of
period
$
326,911
$
191,091
$
326,911
$
191,091
Balances included in the Condensed
Consolidated Balance Sheets:
Cash and cash equivalents
$
317,301
$
172,787
$
317,301
$
172,787
Cash and cash equivalents included in
current assets held for sale
9,610
18,304
9,610
18,304
Cash and cash equivalents at end of
period
$
326,911
$
191,091
$
326,911
$
191,091
1
The cash flows related to discontinued
operations have not been segregated and remain included in the
major classes of assets and liabilities. Accordingly, the Condensed
Consolidated Statements of Cash Flows include the results of
continuing and discontinued operations.
TABLE 6-A
HANESBRANDS INC.
Supplemental Financial
Information
Reconciliation of Select GAAP
Measures to Non-GAAP Measures
(in thousands, except per
share data)
(Unaudited)
The following tables present a
reconciliation of results from continuing operations as reported
under GAAP to the results from continuing operations as adjusted
for the quarter and nine months ended September 28, 2024 and a
comparison to prior year. The Company has chosen to present the
following non-GAAP measures to investors to enable additional
analyses of past, present and future operating performance and as a
supplemental means of evaluating continuing operations absent the
effect of restructuring and other actions that are deemed to be
material stand-alone initiatives apart from the Company’s core
operations. While these costs are not expected to continue for any
individual transaction on an ongoing basis, similar types of costs,
expenses and charges have occurred in prior periods and may recur
in future periods depending upon future business plans and
circumstances.
Restructuring and other action-related
charges in 2024 and 2023 include the following:
Supply chain restructuring and
consolidation
In 2024, represents charges as a result of
the sale of the global Champion business, which was completed
subsequent to the Company’s third quarter on September 30, 2024,
and the completed exit of the U.S.-based outlet store business in
July 2024 related to significant restructuring and consolidation
efforts within the Company’s supply chain network, both
manufacturing and distribution, to align the Company’s network to
its continuing operations to drive stronger operating performance
and margin expansion. In 2023, represents charges related to supply
chain segmentation to restructure and position the Company’s
distribution and manufacturing network to align with its demand
trends, simplify operations and improve efficiencies.
Corporate asset impairment charges
Primarily represents charges related to a
contract terminated in the second quarter of 2024 and impairment of
the Company’s headquarters location that was classified as held for
sale in the second quarter of 2024.
Headcount actions and related
severance
Represents charges related to operating
model initiatives primarily headcount actions and related severance
charges and adjustments related to restructuring activities.
Professional services
Represents professional fees, primarily
including consulting and advisory services, related to
restructuring activities.
Technology
Represents technology charges related to
the implementation of the Company’s technology modernization
initiative which includes a global enterprise resource planning
platform.
Gain/loss on sale of business and
classification of assets held for sale
Represents the gain/loss associated with
the sale of the Company’s U.S. Sheer Hosiery business and
adjustments to the related valuation allowance prior to the sale on
September 29, 2023, primarily from the changes in carrying value
due to changes in working capital.
Loss on extinguishment of debt
Represents charges related to the
redemption of the Company’s 4.625% Senior Notes and 3.5% Senior
Notes in the first quarter of 2023.
Gain on final settlement of cross currency
swap contracts
Primarily represents the remaining gain
related to cross-currency swap contracts previously designated as
cash flow hedges in accumulated other comprehensive loss which was
released into earnings as the Company unwound the cross-currency
swap contracts in connection with the redemption of the 3.5% Senior
Notes at the time of settlement in the first quarter of 2023.
Discrete tax benefit
Represents an adjustment to non-cash
reserves established at December 31, 2022 related to deferred taxes
established for Swiss statutory impairments, which are not
indicative of the Company’s core business operations.
Tax effect on actions
Represents the applicable effective tax
rate on the restructuring and other action-related charges based on
the jurisdiction of where the charges were incurred.
Quarters Ended
Nine Months Ended
September 28,
2024
September 30,
2023
September 28,
2024
September 30,
2023
Gross profit, as reported under
GAAP
$
390,440
$
349,781
$
1,006,828
$
988,953
As a % of net sales
41.7
%
36.4
%
37.1
%
34.3
%
Restructuring and other action-related
charges:
Supply chain restructuring and
consolidation
1,117
660
79,510
2,412
Corporate asset impairment charges
—
—
10,395
—
Headcount actions and related
severance
—
869
36
869
Gross profit, as adjusted
$
391,557
$
351,310
$
1,096,769
$
992,234
As a % of net sales
41.8
%
36.5
%
40.5
%
34.4
%
Quarters Ended
Nine Months Ended
September 28,
2024
September 30,
2023
September 28,
2024
September 30,
2023
Selling, general and administrative
expenses, as reported under GAAP
$
287,442
$
268,751
$
927,851
$
812,446
As a % of net sales
30.7
%
28.0
%
34.2
%
28.2
%
Restructuring and other action-related
charges:
Supply chain restructuring and
consolidation
(9,593
)
—
(90,114
)
—
Corporate asset impairment charges
—
—
(9,712
)
—
Headcount actions and related
severance
1,245
(1,662
)
(17,817
)
(3,551
)
Professional services
(7,843
)
(165
)
(11,877
)
(3,813
)
Technology
(428
)
(588
)
(827
)
(7,690
)
Gain (loss) on sale of business and
classification of assets held for sale
—
1,558
—
(3,641
)
Other
(1,432
)
(324
)
(3,104
)
(438
)
Selling, general and administrative
expenses, as adjusted
$
269,391
$
267,570
$
794,400
$
793,313
As a % of net sales
28.7
%
27.8
%
29.3
%
27.5
%
Quarters Ended
Nine Months Ended
September 28,
2024
September 30,
2023
September 28,
2024
September 30,
2023
Operating profit, as reported under
GAAP
$
102,998
$
81,030
$
78,977
$
176,507
As a % of net sales
11.0
%
8.4
%
2.9
%
6.1
%
Restructuring and other action-related
charges:
Supply chain restructuring and
consolidation
10,710
660
169,624
2,412
Corporate asset impairment charges
—
—
20,107
—
Headcount actions and related
severance
(1,245
)
2,531
17,853
4,420
Professional services
7,843
165
11,877
3,813
Technology
428
588
827
7,690
(Gain) loss on sale of business and
classification of assets held for sale
—
(1,558
)
—
3,641
Other
1,432
324
3,104
438
Operating profit, as adjusted
$
122,166
$
83,740
$
302,369
$
198,921
As a % of net sales
13.0
%
8.7
%
11.2
%
6.9
%
Quarters Ended
Nine Months Ended
September 28,
2024
September 30,
2023
September 28,
2024
September 30,
2023
Interest expense, net and other
expenses, as reported under GAAP
$
58,111
$
65,727
$
179,030
$
191,642
Restructuring and other action-related
charges:
Loss on extinguishment of debt
—
—
—
(8,466
)
Gain on final settlement of cross currency
swaps
—
—
—
1,370
Interest expense, net and other expenses,
as adjusted
$
58,111
$
65,727
$
179,030
$
184,546
Quarters Ended
Nine Months Ended
September 28,
2024
September 30,
2023
September 28,
2024
September 30,
2023
Income (loss) from continuing
operations before income taxes, as reported under GAAP
$
44,887
$
15,303
$
(100,053
)
$
(15,135
)
Restructuring and other action-related
charges:
Supply chain restructuring and
consolidation
10,710
660
169,624
2,412
Corporate asset impairment charges
—
—
20,107
—
Headcount actions and related
severance
(1,245
)
2,531
17,853
4,420
Professional services
7,843
165
11,877
3,813
Technology
428
588
827
7,690
(Gain) loss on sale of business and
classification of assets held for sale
—
(1,558
)
—
3,641
Other
1,432
324
3,104
438
Loss on extinguishment of debt
—
—
—
8,466
Gain on final settlement of cross currency
swaps
—
—
—
(1,370
)
Income from continuing operations before
income taxes, as adjusted
$
64,055
$
18,013
$
123,339
$
14,375
Quarters Ended
Nine Months Ended
September 28,
2024
September 30,
2023
September 28,
2024
September 30,
2023
Income tax expense, as reported under
GAAP
$
12,508
$
21,280
$
34,723
$
50,286
Restructuring and other action-related
charges:
Discrete tax benefit
—
4,263
—
4,263
Tax effect on actions
—
—
—
—
Total included in income tax (expense)
benefit
—
4,263
—
4,263
Income tax expense, as adjusted
$
12,508
$
25,543
$
34,723
$
54,549
Quarters Ended
Nine Months Ended
September 28,
2024
September 30,
2023
September 28,
2024
September 30,
2023
Income (loss) from continuing
operations, as reported under GAAP
$
32,379
$
(5,977
)
$
(134,776
)
$
(65,421
)
Restructuring and other action-related
charges:
Supply chain restructuring and
consolidation
10,710
660
169,624
2,412
Corporate asset impairment charges
—
—
20,107
—
Headcount actions and related
severance
(1,245
)
2,531
17,853
4,420
Professional services
7,843
165
11,877
3,813
Technology
428
588
827
7,690
(Gain) loss on sale of business and
classification of assets held for sale
—
(1,558
)
—
3,641
Other
1,432
324
3,104
438
Loss on extinguishment of debt
—
—
—
8,466
Gain on final settlement of cross currency
swaps
—
—
—
(1,370
)
Discrete tax benefit
—
(4,263
)
—
(4,263
)
Tax effect on actions
—
—
—
—
Income (loss) from continuing operations,
as adjusted
$
51,547
$
(7,530
)
$
88,616
$
(40,174
)
Quarters Ended1
Nine Months Ended1
September 28,
2024
September 30,
2023
September 28,
2024
September 30,
2023
Diluted earnings (loss) per share from
continuing operations, as reported under GAAP
$
0.09
$
(0.02
)
$
(0.38
)
$
(0.19
)
Restructuring and other action-related
charges:
Supply chain restructuring and
consolidation
0.03
0.00
0.48
0.01
Corporate asset impairment charges
—
—
0.06
—
Headcount actions and related
severance
0.00
0.01
0.05
0.01
Professional services
0.02
0.00
0.03
0.01
Technology
0.00
0.00
0.00
0.02
(Gain) loss on sale of business and
classification of assets held for sale
—
0.00
—
0.01
Other
0.00
0.00
0.01
0.00
Loss on extinguishment of debt
—
—
—
0.02
Gain on final settlement of cross currency
swaps
—
—
—
0.00
Discrete tax benefit
—
(0.01
)
—
(0.01
)
Tax effect on actions
—
—
—
—
Diluted earnings (loss) per share from
continuing operations, as adjusted
$
0.15
$
(0.02
)
$
0.25
$
(0.11
)
1
Amounts may not be additive due to
rounding.
TABLE 6-B
HANESBRANDS INC.
Supplemental Financial
Information
Reconciliation of Select GAAP
Measures to Non-GAAP Measures
(in thousands, except per
share data)
(Unaudited)
Last Twelve Months
September 28,
2024
September 30,
2023
Leverage Ratio:
EBITDA1:
Loss from continuing operations
$
(33,586
)
$
(540,019
)
Interest expense, net
203,218
199,947
Income tax expense (benefit)
(29,473
)
498,712
Depreciation and amortization
85,131
81,867
Total EBITDA
225,290
240,507
Total restructuring and other
action-related charges (excluding tax effect on actions)2
223,777
49,571
Other net losses, charges and
expenses3
97,422
104,477
Total EBITDA from discontinued operations,
as adjusted4
146,449
185,923
Total EBITDA, as adjusted
$
692,938
$
580,478
Net debt:
Debt (current and long-term debt and
Accounts Receivable Securitization Facility excluding long-term
debt issuance costs and debt discount of $31,002 and $36,744,
respectively)
$
3,301,250
$
3,606,500
(Less) debt related to an unrestricted
subsidiary5
—
(200,500
)
Other debt and cash adjustments6
3,659
3,992
(Less) Cash and cash equivalents of
continuing operations
(317,301
)
(172,787
)
(Less) Cash and cash equivalents of
discontinued operations
(9,610
)
(18,304
)
Net debt
$
2,977,998
$
3,218,901
Debt/Loss from continuing operations7
(98.3
)
(6.7
)
Net debt/EBITDA, as adjusted8
4.3
5.5
1
Earnings before interest, taxes,
depreciation and amortization (EBITDA) is a non-GAAP financial
measure.
2
The last twelve months ended September 28,
2024 includes $168 million of supply chain restructuring and
consolidation charges, $20 million of corporate asset impairment
charges, $19 million of headcount actions and related severance
charges, $12 million of professional services, $3 million related
to other restructuring and other action-related charges and $2
million of technology charges. The last twelve months ended
September 30, 2023 includes $13 million of headcount actions and
related severance charges, $10 million of technology charges, $8
million of a loss on extinguishment of debt, $7 million of
professional services, $7 million of a loss on sale of business and
classification of assets held for sale, $5 million of supply chain
restructuring and consolidation charges, $1 million related to
other restructuring and other action-related charges and $(1)
million of a gain on the final settlement of cross currency swap
contracts. The items included in restructuring and other
action-related charges are described in more detail in Table
6-A.
3
Represents other net losses, charges and
expenses that can be excluded from the Company’s leverage ratio as
defined under its Fifth Amended and Restated Credit Agreement,
dated November 19, 2021, as amended. The last twelve months ended
September 28, 2024, primarily includes $54 million of excess and
obsolete inventory write-offs, $18 million in other compensation
related items primarily stock compensation expense, $16 million of
pension non-cash expense, $14 million in charges related to sales
incentive amortization, $11 million of non-cash cloud computing
expense, $(4) million of net unrealized gains due to hedging
activities, $(6) million of recovery of bad debt expense and a $(6)
million adjustment for interest expense on debt and amortization of
debt issuance costs related to an unrestricted subsidiary. The last
twelve months ended September 30, 2023, primarily includes $35
million of excess and obsolete inventory write-offs, $20 million in
other compensation related items primarily stock compensation
expense, $17 million of pension non-cash expense, $12 million in
charges related to sales incentive amortization, $7 million of bad
debt expense, $6 million in charges related to the ransomware
attack and extraordinary events, $6 million of non-cash cloud
computing expense, $3 million in charges related to unrealized
losses due to hedging and a $(2) million adjustment for interest
expense on debt and amortization of debt issuance costs related to
an unrestricted subsidiary.
4
Represents Total EBITDA from discontinued
operations, as adjusted for all items that can be excluded from the
Company’s leverage ratio as defined under its Fifth Amended and
Restated Credit Agreement, dated November 19, 2021, as amended.
5
Represents amounts outstanding under an
existing accounts receivable securitization facility entered into
by an unrestricted subsidiary of the Company.
6
Includes drawn and undrawn letters of
credit, financing leases and cash balances in certain
geographies.
7
Represents Debt divided by Loss from
continuing operations, which is the most comparable GAAP financial
measure to Net debt/EBITDA, as adjusted.
8
Represents the Company’s leverage ratio
defined as Consolidated Net Total Leverage Ratio under its Fifth
Amended and Restated Credit Agreement, dated November 19, 2021, as
amended, which excludes other net losses, charges and expenses in
addition to restructuring and other action-related charges.
Quarters Ended
Nine Months Ended
September 28,
2024
September 30,
2023
September 28,
2024
September 30,
2023
Free cash flow1:
Net cash from operating activities
$
92,215
$
155,111
$
196,812
$
287,344
Capital expenditures
(4,088
)
(2,220
)
(32,179
)
(35,790
)
Free cash flow
$
88,127
$
152,891
$
164,633
$
251,554
1
Free cash flow includes the results from
continuing and discontinued operations for all periods
presented.
TABLE 7
HANESBRANDS INC.
Supplemental Financial
Information
Reconciliation of GAAP Outlook
to Adjusted Outlook
(in thousands, except per
share data)
(Unaudited)
Quarter Ended
Year Ended
December 28,
2024
December 28,
2024
Operating profit outlook, as calculated
under GAAP
$
95,000
$
174,000
Restructuring and other action-related
charges outlook
20,000
243,000
Operating profit outlook, as adjusted
$
115,000
$
417,000
Other expenses outlook, as calculated
under GAAP
$
24,000
$
53,000
Restructuring and other action-related
charges outlook
10,000
10,000
Other expenses outlook, as adjusted
$
14,000
$
43,000
Diluted earnings (loss) per share from
continuing operations outlook, as calculated under GAAP1
$
0.06
$
(0.32
)
Restructuring and other action-related
charges outlook
0.08
0.71
Diluted earnings per share from continuing
operations outlook, as adjusted
$
0.14
$
0.39
Cash flow from operations outlook, as
calculated under GAAP
$
250,000
Capital expenditures outlook
40,000
Free cash flow outlook
$
210,000
1
The Company expects approximately 357
million diluted weighted average shares outstanding for the quarter
ended December 28, 2024 and approximately 355 million diluted
weighted average shares outstanding for the year ended December 28,
2024.
The Company is unable to reconcile projections of financial
performance beyond 2024 without unreasonable efforts, because the
Company cannot predict, with a reasonable degree of certainty, the
type and extent of certain items that would be expected to impact
these figures in 2024 and beyond, such as net sales, operating
profit, tax rates and action related charges.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241107569107/en/
News Media contact: Nicole Ducouer (336) 986-7090 Analysts and
Investors contact: T.C. Robillard (336) 519-2115
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