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HI

Hanesbrands Inc. (HBI)·Q1 2026 Earnings Summary

Executive Summary

  • Q1 2026 primary-source documents (8‑K 2.02, press release, and call transcript) were not located; Wall Street consensus for Q1 2026 expects EPS ~$0.063*, revenue ~$0.742B*, and gross margin ~41.2%*, broadly consistent with the structurally higher margin profile established in 2025. Pending Gildan acquisition remains the dominant stock narrative driver .
  • Through 2025, HBI delivered margin expansion and consistent estimate beats: Q1 2025 EPS $0.07 vs $0.02*, Q2 2025 EPS $0.24 vs $0.178*, revenue beats in both quarters*, supported by cost savings, assortment discipline, and lower input costs .
  • Management reiterated and then raised FY25 guidance mid-year (sales to ~$3.53B, operating profit ~$485M, EPS ~$0.66), before ceasing guidance updates owing to the pending transaction .
  • Key near-term catalysts: merger milestones and regulatory approvals (no further guidance due to deal), tariff mitigation execution, and retail replenishment cadence, with back-to-school strength and POS improvements noted exiting Q3 2025 .

What Went Well and What Went Wrong

What Went Well

  • “We delivered another strong quarter, including revenue, operating profit and earnings per share that exceeded our expectations…” (Q1 2025) .
  • Persistent margin expansion: Q2 2025 operating margin 15.5%, gross margin 41.2%, driven by productivity initiatives and SG&A leverage .
  • Tariff mitigation confidence: “We believe we will fully mitigate the tariff headwind… including further cost reductions and pricing actions” (Q1 2025) .

What Went Wrong

  • Intimates softness: “Our intimates business was down mid‑teens… most challenged category in the innerwear business” (Q1 2025) .
  • Q3 2025 late‑quarter order shifts: unanticipated replenishment timing at a large U.S. retail partner pressured net sales −1% YoY .
  • Lower international margins in Q3 2025 (10.2%, −230 bps YoY) amid macro pressures and higher brand investment .

Financial Results

MetricQ1 2025Q2 2025Q3 2025Q1 2026E
Revenue ($USD Millions)$760.1 $991.3*$891.7 $742.3*
Diluted EPS (GAAP, $)$0.04 —$0.76 —
Adjusted EPS (Continuing Ops, $)$0.07 $0.24 $0.15 $0.0628*
Gross Margin %41.7% 41.2% 40.8% (Adj) 41.22%*
Operating Margin % (GAAP)10.5% 15.5% 12.1% —

S&P Global disclaimer: Cells marked with * are values retrieved from S&P Global.

Segment breakdown:

SegmentQ1 2025 Net Sales ($MM)Q1 2025 Op MarginQ3 2025 Net Sales ($MM)Q3 2025 Op Margin
U.S.$536.2 20.9% $647.5 22.2%
International$195.5 11.5% $204.4 10.2%
Other$28.4 8.6% $39.8 3.6%

KPIs:

KPIQ1 2025Q3 2025
Leverage Ratio (Net Debt / Adj EBITDA)3.6x 3.3x
Inventory ($MM)$977 $991
Free Cash Flow ($MM)($119.4) $22.3

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net SalesFY 2025$3.47B–$3.52B ~$3.53B Raised
Operating Profit (Adj)FY 2025$450M–$465M ~$485M Raised
EPS (Adj)FY 2025$0.51–$0.55 ~$0.66 Raised
Quarterly Guidance PolicyPost‑Q3 2025Provided (Q1/Q2) Discontinued due to pending Gildan transaction Withdrawn

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2025 and Q1 2025)Current Period (Q1 2026)Trend
Tariffs/MacroFull mitigation plan with cost actions and surgical pricing; U.S. content offsets; tailwind from input costs (Q1/Q2) No call/docs found; deal pendency dominatesStable mitigation narrative; disclosure reduced due to deal
Supply ChainStreamlined network, Western Hemisphere speed; surge capacity; zero China exposure; POS improved month‑over‑month (Q3) No call/docs foundOperational advantages sustained
Product PerformanceBasics/Active growth; new businesses (scrubs, loungewear) strong; intimates challenged (Maidenform pivot) No call/docs foundMixed: core strong, intimates weak
Regional TrendsInternational constant‑currency growth (Q1), later margin pressure (Q3) No call/docs foundMixed; macro headwinds persist
AI/TechnologyUse of AI for inventory/assortment and demand planning (Q2) No call/docs foundEmerging operational lever
Regulatory/LegalPending Gildan acquisition; guidance curtailed (Q3) No call/docs foundDeal overhang intensifies disclosures

Management Commentary

  • “We delivered another strong quarter, including revenue, operating profit and earnings per share that exceeded our expectations…” (CEO, Q1 2025) .
  • “Our strategy is working… structurally higher profit margins through increased productivity and lower fixed costs… leveraging advanced analytics with the use of AI” (CEO, Q2 2025) .
  • “We believe we will fully mitigate the tariff headwind… many levers to pull, including further cost reductions and pricing actions” (CEO, Q1 2025) .
  • “Leverage at the end of the second quarter was 3.3 times… approaching our target range of two to three times” (CFO, Q2 2025) .

Q&A Highlights

  • Tariff impact and pricing power: Management expects full mitigation (cost actions, surgical pricing), supported by brand strength and innovation .
  • International profitability: SG&A heavy retail mix; expected seasonal margin improvement; actions underway to leverage costs .
  • Private label dynamics: Not pursuing private label; branded strategy and service to win; private label losing share in men’s underwear, up slightly in women’s .
  • Capacity and Western/Eastern balance: Surge capacity and flexibility to shift production; Western Hemisphere speed drives inbound opportunities .

Estimates Context

PeriodMetricConsensusActualSurprise
Q1 2026EPS ($)0.0628*——
Q1 2026Revenue ($MM)742.3*——
Q1 2025EPS ($)0.0211*0.07 +0.0489*
Q1 2025Revenue ($MM)757.9*760.1 +2.23*
Q2 2025EPS ($)0.1780*0.24 +0.0620*
Q2 2025Revenue ($MM)971.9*991.3*+19.39*

S&P Global disclaimer: Cells marked with * are values retrieved from S&P Global.

Key Takeaways for Investors

  • Structurally higher margins appear durable (41%± GM; double‑digit OM) as cost savings and assortment management continue to flow through; monitor for sustained SG&A leverage .
  • Core basics/active momentum offsets intimates softness; Maidenform refocus toward T‑shirt bras in mass/online is a key execution watch‑item .
  • Tariff mitigation plan (cost actions, pricing, U.S. content offsets, supply chain flexibility) remains central to preserving margins and cash flow .
  • Inventory is elevated vs prior year (tariff impact) but POS trends improved sequentially in Q3; working capital discipline remains a determinant of FCF cadence .
  • Leverage reduced to ~3.3x (Q3 2025) from 5.0x prior year, enhancing financial flexibility; debt structure refinanced to increase prepayable mix .
  • Deal overhang: pending Gildan acquisition curtails guidance and may dominate stock reaction near term; track regulatory/process milestones .
  • Near‑term trading implications: absent Q1 2026 prints, focus on consensus trajectory and margin durability; medium‑term thesis hinges on operational execution (tariffs, intimates turnaround) and deal outcome .

Document availability note: Despite targeted searches, no Q1 2026 8‑K 2.02 press release, earnings call transcript, or other period press releases were found in the document catalog for HBI for 2026; we read and synthesized Q1/Q2/Q3 2025 earnings materials as the most recent primary sources [List search returned none for 2026; found relevant 2025 docs: 8‑K, press releases, and transcripts] .