HanesBrands Inc. raised its outlook as its transformation efforts are driving higher margins and operating efficiencies. On an organic basis, sales for the parent of Hanes, Maidenform, Bali and and Australia's Bonds innerwear brand were flat.
"For the third consecutive quarter, we delivered revenue, profit and earnings per share growth that exceeded our expectations as we continue to see the benefits of our growth strategy and prior transformation initiatives," said Steve Bratspies, CEO. "With our strong performance to date and our visibility to cost savings and input costs, we raised our full-year outlook, which continues to reflect our expected impact from U.S. tariffs. Our strategy is delivering consistent results, and we're confident it positions us for continued long-term success. We have multiple avenues to drive increased shareholder returns over the next several years through consistent sales growth, additional margin expansion, and continued debt reduction."
Second-Quarter 2025 Results
Net sales from continuing operations were $991 million. HanesBrands' guidance had called for sales of $970 million.
Gross profit and gross margin increased year-over-year driven by the benefits from cost savings and productivity initiatives, the benefits from assortment management, and lower input costs.
Operating profit and operating margin increased over prior year through the combination of gross margin improvement and lower SG&A expenses. SG&A expenses decreased compared to prior year both on an absolute basis and as a percent of net sales due to the benefits from cost savings initiatives and disciplined expense management.
U.S. net sales decreased slightly, or approximately $5 million, as compared to prior year. The company continued to focus on its core growth fundamentals including innovation, brand investments, and incremental programming opportunities. These fundamentals delivered year-over-year growth in its Basics, Active, and New businesses. Similar to the overall innerwear market, this growth was more than offset by continued headwinds in its Intimate Apparel business.
Operating margin of 25.0 percent increased 360 basis points over prior year driven by benefits from cost savings and productivity initiatives as well as lower input costs.
International net sales decreased 3 percent on a reported basis, which included a $7 million headwind from unfavorable foreign exchange rates, and were consistent with prior year on a constant currency basis. By region, constant currency net sales increased in the Americas, were consistent with prior year in Australia, and decreased in Asia.
Operating margin of 10.7 percent decreased 225 basis points compared to prior year, driven primarily by increased promotional activity, unfavorable mix, increased brand investment and the impact from foreign exchange rates, which more than offset the benefits from cost savings initiatives and lower input costs.
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's guidance reflects its expected impact from U.S. tariffs and is subject to change in the future.
For fiscal year 2025, which ends January 3, 2026, and includes a 53rd week, the company currently expects:
For third-quarter 2025, which ends on September 27, 2025, the company currently expects: