Hanesbrands delivered results in line with Wall Street’s revenue expectations in the first quarter, while non-GAAP profit and operating margin expanded significantly. The positive market reaction reflected management’s emphasis on cost reductions and supply chain optimization as key drivers. CEO Steve Bratspies cited improved gross margins and a leaner operating model, supported by lower selling, general, and administrative costs, as instrumental to the quarter’s strong profitability. The company also highlighted growth in international markets, despite continued softness in U.S. innerwear, particularly intimate apparel.
Is now the time to buy HBI? Find out in our full research report (it’s free).
Hanesbrands (HBI) Q1 CY2025 Highlights:
- Revenue: $760.1 million vs analyst estimates of $756.7 million (2.1% year-on-year growth, in line)
- The company reconfirmed its revenue guidance for the full year of $3.5 billion at the midpoint
- Management reiterated its full-year Adjusted EPS guidance of $0.53 at the midpoint
- Constant Currency Revenue rose 3.7% year on year (-15.7% in the same quarter last year)
- Market Capitalization: $1.63 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Hanesbrands’s Q1 Earnings Call
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Jay Soul (UBS) asked about the company’s ability to mitigate tariff impacts and the nature of incremental revenue opportunities. CEO Steve Bratspies explained the mitigation levers include U.S. content exemptions and supply chain flexibility, while revenue growth is expected from branded offerings rather than private label.
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Paul Kearney (Barclays) inquired about market dynamics, inventory management among retail partners, and competitor pricing. Bratspies described positive retailer relationships, tight inventory management across the sector, and a lack of significant industry-wide pricing changes to date.
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David Swartz (Morningstar) questioned the weakness in the intimate apparel category and its outlook. Bratspies clarified that softness was concentrated in intimates, especially Maidenform, and outlined plans to pivot product focus and improve performance in that segment.
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Ike Boruchow (Wells Fargo) asked for more granularity on the potential unmitigated tariff impact and the sustainability of gross margin improvements. Bratspies reiterated confidence in fully mitigating tariffs and maintaining gross margin in the low-40s percent range.
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Brandon Cheatham (Citi) followed up on the company’s ability to absorb new business from retailer inquiries and the balance between Western and Eastern Hemisphere production. Bratspies cited available surge capacity and supply chain optimization efforts, ensuring scalability for future growth.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will watch (1) the pace at which Hanesbrands secures incremental retailer programs as a result of tariff-related supply chain shifts, (2) progress in turning around the intimate apparel segment, especially Maidenform, and (3) the effectiveness of cost containment and pricing initiatives in maintaining margin expansion. Further updates on international market growth and ongoing supply chain optimization will also be key markers of execution.
Hanesbrands currently trades at $4.63, down from $4.88 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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