Shares of clothing company HanesBrands Inc (NYSE:HBI) are trading lower on Thursday after the fourth-quarter FY24 earnings.

The company reported fourth-quarter sales growth of 4.5% year-on-year to $888.47 million, missing the analyst consensus estimate of $950.27 million.

On an organic constant currency basis, net sales increased 3.8% over prior year. Adjusted EPS of $0.17 beat the analyst consensus of $0.14.

U.S. net sales increased 3% over prior year, driven primarily by innerwear innovation, including Hanes Absolute Socks, Hanes Moves, Hanes Supersoft and Bali Breathe.

International sales increased 6% on a constant currency basis compared to prior year as sales grew in Australia, the Americas, and Asia.

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Gross margin expanded 380 basis points Y/Y to 43.9%. Operating margin expanded 240 basis points to 13.5%, and operating income for the quarter jumped 26.7% to $119.7 million.

Inventories decreased 9% to $871 million. The company held $214.85 million in cash and equivalents as of Dec. 28, 2024. Cash flow from operations for the quarter was $67.4 million.

Outlook: HanesBrands expects FY25 sales of $3.47 billion – $3.52 billion versus an estimate of $3.655 billion. It sees FY25 adj EPS of $0.51 – $0.55 versus the $0.57 estimate.

For the first quarter, the company anticipates sales of $750 million, against an estimate of $785.28 million. It sees adjusted EPS of $0.02 against an estimate of $0.03.

Leadership Succession: HanesBrands also announced today that Steve Bratspies will depart as Chief Executive Officer at the end of 2025, or upon the appointment of his successor. Bratspies will step down from the Board concurrent with the end of his tenure as CEO. 

Price Action: HBI shares are trading lower by 16.6% at $6.40 at the last check on Thursday.

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