The following is a summary of the Hanesbrands Inc. (HBI) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Hanesbrands reported Q3 sales in line with mid-point guidance, showing a continuation of global sales improvements.

• They exceeded high-end expectations for gross margin, operating profit, and earnings per share; with an operating margin of 13% and gross margin reaching 41.8%.

• Recorded a decrease in sales by 2.5%, adjusted for divestitures and foreign exchange, with consistent organic constant currency sales compared to the previous year.

• Year-to-date, generated approximately $200 million in operating cash flow and reduced leverage by nearly a full turn.

Business Progress:

• Executed strategic actions leading to a simplified and more focused business structure that achieves consistent growth and higher margins.

• Launched innovative products across major brands, achieving permanent retail space gains and driving market share, especially among young consumers.

• Initiatives for SKU optimization and cost savings are enhancing margin profitability sustainably.

• Paid down $870 million of debt in October, progressing towards a goal of $1 billion of debt reduction in the second half of the year.

Opportunities:

• Incremental holiday programs and global brand campaigns, along with gaining additional distribution in the Americas, are positioned to drive revenue growth.

• Innovations introduced in major brands are expected to enhance competitive advantages and contribute to sustained top-line growth.

Risks:

• Continuing to navigate a challenging consumer environment, with the need to mitigate impacts through strategic actions and innovations.

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