HanesBrands board of directors has started the process of finding a new CEO (chief executive) and has engaged the services of consultancy Spencer Stuart to assist in identifying suitable candidates for the role.
The upcoming CEO transition comes as the company’s quarterly and annual performance outpaced projected key indicators, signalling the effective implementation of its strategic reformation plan.
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Bratspies, the former Walmart executive, will also resign from the board when he steps down as CEO but will continue in an advisory capacity to ensure a seamless leadership transition.
Board chairman Bill Simon said: “We are actively searching for the next leader who will continue building on our momentum for the next chapter of the company’s growth. We will provide updates as appropriate. On behalf of the entire board, we deeply appreciate the transformative leadership Steve has demonstrated throughout his tenure as CEO to make HanesBrands a new and better company.
“Steve led HanesBrands through a turbulent period in our industry, overhauling the company’s operating model, completing the sale of the Champion business and positioning HanesBrands as a global powerhouse in basics and innerwear. Under Steve’s leadership, the company has narrowed its focus and is now on track to deliver even stronger performance and increased shareholder returns in the coming years.”
HanesBrands’ Q4 2024 key highlights
In the fourth quarter 2024, HanesBrands net sales from continuing operations was $888m, a 4.5% increase over the previous year.
The company attributed the growth to cost-saving initiatives and reduced input costs which boosted gross profit by 14% to $390m and adjusted gross profit by 15% to $392m.
Gross margin expanded by 380 basis points to 43.9% and adjusted gross margin by 400 basis points to 44.1%.
During the quarter, HanesBrands’ operating profit saw a 27% rise to $120m with operating margin up by 240 basis points to 13.5%. Its adjusted operating profit climbed by 33% to $126m.
The company’s income from continuing operations was $46m in Q4 FY24, down from $99m in the same period a year ago. Earnings per diluted share stood at $0.13 against $0.28 in Q4 FY23.
HanesBrands outlook for FY25 and Q1 FY25
The company noted that its fiscal year 2025 includes an extra week and ends on 3 January 2026. HanesBrands anticipates net sales from continuing operations between $3.47bn and $3.52bn, accounting for foreign currency exchange rate headwinds of about $60m.
The midpoint forecast suggests sales consistent with the prior year on a reported basis and an approximate 1% increase on an organic constant currency basis.
GAAP operating profit from continuing operations is projected to be between $420m and $440m, while adjusted operating profit is estimated between $450m and $465m after excluding restructuring charges of roughly $25m to $30m.
For Q1 FY25 ending 29 March 2025, the company expects net sales from continuing operations of around $750m despite foreign currency exchange rate headwinds of about $15m.
This represents an approximate 1% increase compared to the prior year on both a reported basis and an organic constant currency basis.
Bratspies said: “We enter 2025 as a new company. We are a more simplified, focused business with a powerful asset base and significant competitive advantages. We believe we are well positioned to build on the fourth quarter’s momentum and deliver positive sales growth, additional margin expansion, strong cash generation and continued debt reduction, providing us multiple levers to create additional shareholder value in 2025 and beyond.”
