Fashion
US’ HanesBrands Q3 operating profit rises 14% despite 1% dip in sales
The operating margin improved 160 basis points (bps) to 12.1 per cent, driven by lower selling, general and administrative (SG&A) expenses and effective cost-saving initiatives.
US’ HanesBrands Inc has reported net sales of $892 million in Q3 2025, down 1 per cent YoY, while operating profit rose 14 per cent to $108 million and margin improved to 12.1 per cent.
EPS surged 986 per cent to $0.76, aided by tax benefits.
Despite weaker US and international sales, cost savings, margin expansion, and market share gains strengthened results ahead of its merger with Gildan.
Adjusted operating profit increased 3 per cent to $116 million, with an adjusted operating margin of 13 per cent—up 45 bps YoY. Gross profit slipped 3 per cent to $363 million, with gross margin narrowing 70 bps to 40.8 per cent, primarily due to an unfavourable business and customer mix.
The earnings per share (EPS) surged 986 per cent to $0.76, boosted by a $0.64 per share discrete tax benefit. Adjusted EPS climbed 25 per cent to $0.15, reflecting stronger operational performance and lower interest expenses. The balance sheet continued to strengthen, with leverage decreasing to 3.3 times net debt-to-adjusted EBITDA, compared to 4.3 times a year ago, HanesBrands said in a press release.
In the US market, net sales declined 4.5 per cent due to a late-quarter shift in replenishment orders at a large retail partner. Nevertheless, HanesBrands saw sequential improvement in unit point-of-sale trends each month and recorded a successful back-to-school season, with the Hanes brand gaining market share. Operating margin in the segment rose 20 bps to 22.2 per cent.
International net sales fell 8 per cent on a reported basis, including a $4 million forex headwind, and 6 per cent in constant currency. Sales improved in Japan but declined in the Americas and Australia. The operating margin in the segment dropped 230 bps to 10.2 per cent, impacted by lower volume and higher brand investment.
The cash flow from operations stood at $28 million, down from $92 million in Q3 2024, while free cash flow totalled $22 million, compared to $88 million last year. Inventory levels rose 10 per cent YoY to $991 million, largely due to tariff-related impacts, though stock keeping unit (SKU) count was reduced by 5 per cent year-to-date, reflecting tighter inventory management.
“Our top-line results for the quarter reflect an unanticipated late quarter shift in replenishment orders at one of our large US retail partners; however, we saw underlying fundamentals of our business continue to improve in the quarter. Our inventory position at retail is strong. We are encouraged by our unit point-of-sale trends, which sequentially improved each month during the quarter. We are also pleased with our strong back-to-school season as the Hanes brand continued to gain market share,” said Steve Bratspies, CEO at HanesBrands Inc.
“In addition, the continued execution of our cost savings initiatives drove operating profit growth and operating margin expansion, which along with lower interest expense, combined to generate a 25 per cent increase in adjusted earnings per share in the quarter. Looking forward, our team remains focused on driving the business and the successful completion of the transaction with Gildan,” added Bratspies.
HanesBrands and Gildan Activewear entered into a definitive merger agreement on August 13, 2025, under which Gildan will acquire HanesBrands. While the company will not be providing guidance going forward due to the pending transaction, it believes it’s on track to meet its previously provided full-year 2025 EPS outlook, added the release.
Fibre2Fashion News Desk (SG)
Kenneth Straka, Senior Product Development Manager at Deckers Outdoor Corporation, said that Deckers places strong emphasis on sustainability, noting that founder John Luke often reminded the team that the French word for sustainability is durability. This idea aligned with discussions at the Global Fashion Summit, where the theme centred on “Building Resilient Futures” in the sustainable and circular economy.
Durability has helped UGG become one of the most sought-after boot brands and a key sales driver for Deckers, alongside its sportswear brand Hoka. “One of the things we think about in terms of circularity is making products that last a long time and remain with consumers throughout their lives. We want products that consumers can wear for ** or ** years,” Straka said in an interview with Fibre*Fashion on the sidelines of the Global Fashion Summit in Copenhagen.
In the Tiruppur market, cotton yarn prices increased by ****;*–* per kg in this week despite sluggish local demand. Prices were quoted higher because of limited supply from spinning mills. A trader from the Tiruppur market told Fibre*Fashion, “Domestic demand remained limited, but spinning mills are not relying solely on the domestic market for cotton yarn sales. They are focusing more on exports, where demand and prices remain attractive. Mills have raised yarn prices following higher ICE cotton prices and the CCI’s increase in auction base prices, although ICE cotton has witnessed a sharp decline over the past two days.”
In Tiruppur, knitting cotton yarn prices were noted as: ** count combed cotton yarn at ****;***–*** (~$*.**–*.**) per kg (excluding GST), ** count combed cotton yarn at ****;***–*** (~$*.**–*.**) per kg, ** count combed cotton yarn at ****;***–*** (~$*.**–*.**) per kg, ** count carded cotton yarn at ****;***–*** (~$*.**–*.**) per kg, ** count carded cotton yarn at ****;***–*** (~$*.**–*.**) per kg, and ** count carded cotton yarn at ****;***–*** (~$*.**–*.**) per kg.
BGMEA president Mahmud Hasan Khan said they discussed export diversification within the garment sector, reopening of closed factories and many factories’ struggle for survival.
Representatives of two top Bangladesh garment trade bodies recently met PM Tarique Rahman and urged him to ensure uninterrupted power and energy supply, quick release of export receipts from banks, reopening of closed factories and easing of customs regulations.
BKMEA raised concerns about misuse of the bond facility and urged action against violators of bond licences.
104 factories have informed the BGMEA about their closure till now, Khan said. BGMEA will scrutinise these cases to identify the genuine reasons for the closures.
Following the scrutiny, the association will send recommendations for reopening these factories, as the government is working to open a Tk 200-billion fund to assist their revival.
BKMEA president Mohammad Hatem said some 400 factories closed in the last three years—nearly 300 of them due to non-cooperation from banks. He said banks release export receipts to exporters’ lien accounts, but delays in payment often force loans into default, leaving exporters unable to pay suppliers on time.
He also demanded uninterrupted supply of power and gas to industrial units as recent shortages of fuel oil have severely affected productivity, according to domestic media ooutlets.
Hatem raised concerns about misuse of the bond facility and urged action against violators of bond licences.
He also called for easing the rules of the National Board of Revenue, particularly customs procedures, to smoothen export and import processes and reduce lead times.
Fibre2Fashion News Desk (DS)
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