UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 28, 2024
or
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 001-32891
Hanesbrands Inc.
(Exact name of registrant as specified in its charter)
Maryland
20-3552316
(State of incorporation)
(I.R.S. employer identification no.)
1000 East Hanes Mill Road
Winston-Salem, North Carolina
27105
(Address of principal executive office)
(Zip code)
(336) 519-8080
(Registrant’s telephone number including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common Stock, Par Value $0.01
HBI
New York Stock Exchange
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant
to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”
and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of
its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public
accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☒
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based
compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
As of June 28, 2024, the aggregate market value of the registrant’s common stock held by non-affiliates was approximately
$1,725,686,462 (based on the closing price of the common stock on that date, as reported on the New York Stock Exchange and, for purposes
of this computation only, the assumption that all of the registrant’s directors and executive officers are affiliates and that beneficial holders of
5% or more of the outstanding common stock are not affiliates).
As of February 7, 2025, there were 353,108,892 shares of the registrant’s common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Part III of this Form 10-K incorporates by reference to portions of the registrant’s proxy statement for its 2025 annual meeting of
stockholders.
TABLE OF CONTENTS
Page
Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
PART I
Item 1
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
Item 1A
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11
Item 1B
Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24
Item 1C
Cybersecurity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24
Item 2
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25
Item 3
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26
Item 4
Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26
PART II
Item 5
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27
Item 6
[Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28
Item 7
Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . .
29
Item 7A
Quantitative and Qualitative Disclosures about Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
49
Item 8
Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
50
Item 9
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . . . . . . . .
50
Item 9A
Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
50
Item 9B
Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
50
PART III
Item 10
Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
51
Item 11
Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
52
Item 12
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters . . .
52
Item 13
Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . . . . . . . . . .
52
Item 14
Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
52
PART IV
Item 15
Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
53
Item 16
Form 10-K Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
57
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
58
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-1
Table of Contents
FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains information that may constitute “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange
Act”). Forward-looking statements include all statements that do not relate solely to historical or current facts, and can
generally be identified by the use of words such as “may,” “believe,” “could,” “will,” “expect,” “outlook,” “potential,”
“project,” “estimate,” “future,” “intend,” “anticipate,” “plan,” “continue” or similar expressions. However, the absence of these
words or similar expressions does not mean that a statement is not forward-looking. All statements regarding our intent, belief
and current expectations about our strategic direction, prospects and future results are forward-looking statements and are
subject to risks and uncertainties that could cause actual results to differ materially from those implied or expressed by such
statements. These risks and uncertainties include, but are not limited to, trends associated with our business; our ability to
successfully implement our strategic plans, including our supply chain restructuring and consolidation and other cost savings
initiatives; trends associated with our business; the rapidly changing retail environment and the level of consumer demand; the
effects of any geopolitical conflicts (including the ongoing Russia-Ukraine conflict and Middle East conflicts) or public health
emergencies or severe global health crises, including effects on consumer spending, global supply chains, critical supply routes
and the financial markets; our ability to deleverage on the anticipated time frame or at all; any inadequacy, interruption,
integration failure or security failure with respect to our information technology; future intangible assets or goodwill
impairment due to changes in our business, market condition or other factors, significant fluctuations in foreign exchange rates;
legal, regulatory, political and economic risks related to our international operations; our ability to effectively manage our
complex international tax structure; and our future financial performance. Management believes that these forward-looking
statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any such
forward-looking statements. Such statements speak only as of the date when made and we undertake no obligation to publicly
update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as
required by law. More information on factors that could cause actual results or events to differ materially from those anticipated
is included from time to time in our reports filed with the Securities and Exchange Commission (the “SEC”), including those
described under Part I, Item 1A. “Risk Factors” and elsewhere in this Annual Report on Form 10-K, and available on the
“Investors” section of our corporate website, www.Hanes.com/investors. The contents of our corporate website are not
incorporated by reference in this Annual Report on Form 10-K.
PART I
Table of Contents
1
Item 1.
Business
Company Overview
Hanesbrands Inc. (collectively with its subsidiaries, “Hanesbrands,” “we,” “us,” “our” or the “Company”) is a socially
responsible global leader in everyday iconic apparel with a mission to create a more comfortable world for everybody. We
operate across the Americas, Australia, and Asia. We own a portfolio of some of the world’s most recognized apparel brands in
the core basic and innerwear apparel categories including Hanes, Bonds, Bali, Maidenform, Playtex, Bras N Things, Berlei,
Wonderbra, Zorba, JMS/Just My Size and Comfortwash. It’s through our iconic brands that we deliver quality, affordable
comfort that is responsibly produced with ethically sourced materials. Our brands have been trusted by consumers for
generations as our products are in nine out of 10 U.S. households and we are the No. 1 seller of innerwear.
We continue to extend our market share lead and widen the gap from our competitors by leveraging the unmatched
capabilities of our asset base, which consists of three key components: Global go-to-market capabilities, distribution at scale,
and world-class manufacturing and sourcing operations. We capture demand wherever the consumer wants to shop, with
products available in every channel, including market leading retailers and through our own direct-to-consumer channels.
We design, manufacture, source and sell a broad range of basics and innerwear apparel, such as T-shirts, bras, panties,
shapewear, underwear and socks that are manufactured or sourced in our low-cost global supply chain. Almost 75% of the
apparel units that we sell are produced in our plants or by dedicated contractors. This ownership of our supply chain enhances
cost efficiency, scalability, and flexibility while enabling us to protect our brands and uphold best-in-class environmental and
management practices.
Hanesbrands is proud of its reputation for ethical business practices and its commitment to corporate responsibility. We
earned leadership -level A- scores in our most recent CDP Climate Change and Water Security reports, ranking among the top
of nearly 22,000 companies evaluated. Hanesbrands set 2030 targets approved by the Science-Based Targets Initiative to reduce
carbon emissions. In 2023, we surpassed those goals seven years ahead of schedule. Additionally, we are recognized for our
impactful community-building initiatives, philanthropy and inclusive workplace practices.
Our holistic sustainability strategy is built on three core pillars: People, Planet and Product. These efforts align with the
United Nations’ Sustainable Development Goals, addressing key areas such as good health and well-being, quality education,
gender equality, climate action, clean water and sanitation, affordable and clean energy, economic growth, reduced inequalities,
and responsible consumption and production. Through our dedicated sustainability website, hbisustains.com, we remain
transparent throughout our journey, updating annually to track our progress towards our long-term goals. Since 2020, our
sustainability initiatives have delivered more than $31 million in cost savings, with significant strides made in 2024.
Great clothes made right: This is who we are and what we do. Our business strategy reflects this statement in how we care
for and grow our iconic brands through three key principles: Simplify for Growth, Focus for Impact, and Continuously Improve
to Win. By simplifying our portfolio, we continue to elevate our brands by delivering quality and value to our consumers
through innovative brand and product experiences. This keeps us focused on our core product offerings while also expanding
through innovation and new business opportunities for greater marketplace impact.
Continuously improving to win means taking decisive actions to streamline our operations and deliver measurable results.
Through our disciplined inventory management, we push to reduce inventory and product SKUs. We have segmented and
consolidated our world-class supply chain for greater efficiency and flexibility. Our go-to-market strategy has been reimagined
into a winning, repeatable cadence, supported by a robust, consumer-led innovation process that keeps us at the forefront of
industry trends. All of this to ensure we consistently grow sales, expand our margins and generate cash flow.
Looking ahead we aim to build on this momentum and drive transformational growth. Our focus is on expanding our core
business while placing strategic bets to explore new markets and opportunities. We remain committed to delivering greater
value for shareholders by increasing returns and reducing debt, bolstering investor confidence. Through these efforts,
Hanesbrands is shaping a future of sustained success, built on a foundation of innovation, agility, and excellence.
Table of Contents
2
In September 2023, we announced that our Board of Directors and executive leadership team, with the assistance of
financial and legal advisors, were undertaking an evaluation of strategic alternatives for the global Champion business, which
included a broad range of alternatives to maximize shareholder value and also considered an evaluation of the strategic
alternatives for our U.S.-based outlet store business impacted by the global Champion business. In June 2024, we reached the
decision to exit the U.S.-based outlet store business and the global Champion business, excluding the Champion Japan business,
(“global Champion business”). We completed the exit of the U.S.-based outlet store business in July 2024 and completed the
sale of the intellectual property and certain operating assets of the global Champion business in the fourth quarter of 2024 on
September 30, 2024. In December 2024, we finalized plans to exit the Champion Japan business and expect to complete the
sale of the business within the next 12 months. We determined that the exit of the global Champion business, U.S.-based outlet
store business and the Champion Japan business represent multiple components of a single strategic plan that met held-for-sale
and discontinued operations accounting criteria in 2024. Accordingly, we began to separately report the results of these
businesses as discontinued operations in our Consolidated Statements of Operations and to present the related assets and
liabilities as held for sale in our Consolidated Balance sheets. These changes have been applied to all periods presented.
On March 5, 2022, we completed the sale of our European Innerwear business to an affiliate of Regent, L.P. and on
September 29, 2023, we completed the sale of our U.S. Sheer Hosiery business to AllStar Hosiery LLC, an affiliate of AllStar
Marketing Group, LLC. When we reached the decision to exit our European Innerwear business in 2021, we determined that
this business met held-for-sale and discontinued operations accounting criteria and accordingly, we began to separately report
the results of our European Innerwear business as discontinued operations in the Consolidated Statements of Operations for the
year ended December 31, 2022. The operations of our U.S. Sheer Hosiery business are reported in “Other” for the years ended
December 30, 2023 and December 31, 2022 in Note “Business Segment Information” to our consolidated financial statements
included in this Annual Report on Form 10-K.
Unless otherwise noted, all discussion within this Annual Report on Form 10-K, including amounts and percentages for
all periods, reflect the results of our continuing operations. See Note “Assets and Liabilities of Businesses Held for Sale” to our
consolidated financial statements included in this Annual Report on Form 10-K for additional information.
Our fiscal year ends on the Saturday closest to December 31. All references to “2024”, “2023” and “2022” relate to the
52-week fiscal years ended on December 28, 2024, December 30, 2023, and December 31, 2022, respectively.
We make available copies of materials we file with, or furnish to, the SEC free of charge at www.Hanes.com/investors (in
the “Investors” section). By referring to our corporate website, www.Hanes.com/corporate, our sustainability website,
www.hbisustains.com, or any of our other websites, we do not incorporate any such website or its contents into this Annual
Report on Form 10-K.
Our Brands
Our portfolio of leading brands is designed to address the needs and wants of various consumer segments across a broad
range of basic apparel products. Our brands have strong consumer positioning that helps distinguish them from competitors and
guides their advertising and product development.
Hanes is the cornerstone of our portfolio. The Hanes brand is over 120 years old and is the most widely recognized
apparel brand in the United States. As the top-selling apparel brand in the country, Hanes reaches nine out of ten U.S.
households, delivering unparalleled comfort, style, and value. Spanning every major product category - including men’s
underwear, women’s panties, children’s underwear, bras, socks, T-shirts, fleece and shapewear - Hanes sets the standard for
everyday essentials. With one of the broadest distribution footprints in the industry, Hanes products are available across all
major retail channels, including mass merchandise, e-commerce platforms, discount stores, and department stores.
Collaborations with third party partners have further expanded the brand’s reach to specialty and high-end retailers, solidifying
its versatility and appeal. Innovation drives the Hanes brand forward. Following the highly successful 2021 launch of the Hanes
Total Support Pouch underwear platform, we introduced the Hanes Originals line in late 2022, which was designed to resonate
with younger consumers. Hanes Originals marked the brand’s first multi-category, multi-geography product launch under our
new global innovation framework. In 2024, Hanes continued its innovation momentum with the launch of the Hanes Originals
SuperSoft collection, reinforcing its leadership in innovation and creating comfort-driven, style-forward apparel for a new
generation. The brand also introduced Hanes Moves, a new men’s collection with X-Temp all-day cooling technology.
Bonds is a megabrand in our global portfolio with strong heritage and deep household penetration in its respective market.
The Bonds brand is over a century old and is Australia’s largest and most well-known innerwear brand, holding the number one
position in men’s underwear, women’s panties, children’s underwear and socks categories. The portfolio also extends to casual
apparel, babywear, activewear, sleepwear and bras. While Bonds is distributed across wholesale channels, it’s primarily
distributed direct-to-consumer through its retail store network of over 140 stores, a thriving e-commerce business and growing
omnichannel services making it easier for consumers to interact with the brand.
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3
Maidenform is America’s number one shapewear brand and has been trusted for stylish, modern bras, panties and
shapewear since 1922. It is one of multiple iconic intimate brands in our portfolio. In 2023, we launched M by Maidenform, a
collection of extremely soft-on-the-skin intimate apparel products focused on younger consumers, across channels with strong
initial consumer response. As with Hanes, we are leveraging our global scale with M by Maidenform distributed in multiple
countries. Bali offers a range of bras, panties and shapewear sold in the department store channel. Bali Breathe launched in
2024, a new collection crafted from an ultra-soft cotton modal fabric for comfort and breathable support. Playtex, an iconic
American brand, offers a range of full-figure wire free support bras and is sold everywhere from mass merchandise retailers to
department stores.
In addition, we offer a variety of apparel products under the following well-known brands: Bras N Things, Berlei,
Wonderbra, Zorba, JMS/Just My Size and Comfortwash.
These brands complement our primary product offerings, allowing us to provide consumers a variety of options to meet
their diverse needs.
Our Segments
In 2024, we realigned our segment reporting as a result of the sale of the global Champion business, as discussed in Note
“Assets and Liabilities of Businesses Held for Sale” to our consolidated financial statements included in this Annual Report on
Form 10-K. While the global Champion business was reflected within all reportable segments prior to its reclassification to
discontinued operations, the U.S. Champion business made up the majority of our former Activewear segment. Accordingly,
the former Activewear segment has been eliminated and the segment information herein excludes the results of the global
Champion business for all periods presented. As a result of the strategic shift and resulting reorganization, the chief executive
officer, who is our chief operating decision maker, began reviewing all U.S. innerwear and U.S. activewear operations together
as one U.S. operating segment. As a result of these changes, our operations are now managed and reported in two operating
segments, each of which is a reportable segment for financial reporting purposes: U.S. and International. In December 2024, the
Champion Japan business, which was previously reported within the International segment, was classified as held for sale and
reflected as discontinued operations for all periods presented. Accordingly, the Champion Japan business has been excluded
from the International segment information herein. These segments are organized principally by geographic location. Each
segment has its own management team that is responsible for the operations of the segment’s businesses, but the segments share
a common supply chain and media and marketing platforms.
The following table summarizes our operating segments by product category:
Segment
Primary Products
Primary Brands
U.S.
Basics, including men’s underwear, women’s
panties, children’s underwear and socks and
intimate apparel, such as bras and shapewear, T-
shirts, fleece, sports bras and thermals
Hanes, Bali, Maidenform, Playtex, JMS/Just
My Size, Comfortwash, Hanes Beefy-T, Polo
Ralph Lauren*
International
Basics, including men’s underwear, women’s
panties, children’s underwear, and socks and
intimate apparel, such as bras and shapewear,
thermals and home goods
Bonds, Sheridan, Hanes, Bras N Things,
Playtex, Berlei, Wonderbra, Zorba, Rinbros,
Sol y Oro, Polo Ralph Lauren*
*
Brand used under a license agreement.
U.S.
Our U.S. segment includes core apparel products, such as men’s underwear, women’s panties, children’s underwear and
socks as well as intimate apparel, which includes bras and shapewear, sold in the United States, under well-known brands that
are trusted by consumers. We are the leading manufacturer and marketer of men’s underwear and children’s underwear in the
United States under the Hanes and Polo Ralph Lauren brands and we are also an intimate apparel category leader in the United
States with our Hanes, Bali, Maidenform, and Playtex brands. This segment also includes other apparel sales in the United
States of branded products that are primarily seasonal in nature to both retailers and wholesalers. During 2024, net sales from
our U.S. segment were $2.6 billion, representing approximately 74% of total net sales.
Table of Contents
4
International
Our International segment includes innerwear and home goods products, sold outside of the United States, that are
primarily marketed under the Bonds, Sheridan, Hanes, Bras N Things, Playtex, Berlei, Wonderbra, Zorba, Rinbros, Sol y Oro,
and Polo Ralph Lauren brands. Our innerwear brands are market leaders across Australia and certain markets in Latin America.
In Australia, we are the category leader in men’s underwear and we hold the number one market share in intimate apparel.
During 2024, net sales from our International segment were $908 million, representing approximately 26% of total net sales.
Our largest international markets are Australia, Mexico, Canada, and Latin America.
The following table summarizes our brands and product categories sold within each international region:
International Country/Region
Primary Products
Primary Brands
Australia
Basics, including men’s underwear, women’s
panties, children’s underwear and socks and
intimate apparel, such as bras and shapewear
Bonds, Bras N Things, Berlei
Home goods
Sheridan
Asia
Basics, including men’s underwear, women’s
panties, children’s underwear and socks and
intimate apparel, such as bras and shapewear
Hanes, Playtex, Wonderbra, Polo Ralph
Lauren*
Americas (excluding the
United States)
Basics, including men’s underwear, women’s
panties, children’s underwear and socks and
intimate apparel, such as bras and shapewear, T-
shirts, fleece, sports bras and thermals
Hanes, Wonderbra, Zorba, Rinbros, Sol y
Oro
*
Brand used under a license agreement.
Customers and Distribution Channels
Our products are broadly distributed through our wholesale customers’ stores and websites, as well as through our own
stores and websites. In 2024, approximately 74% of our total net sales were in the United States and approximately 26% were
outside the United States. Our largest customers are Walmart Inc. (“Walmart”), Amazon.com Inc. (“Amazon”), and Target
Corporation (“Target”) and accounted for 24%, 13%, and 11% of our total net sales in 2024, respectively. As is common in the
basic apparel industry, we generally do not have purchase agreements that obligate our customers to purchase our products.
However, the majority of our key customer relationships have been in place for 10 years or more. Walmart, Amazon, and
Target are our only customers with sales that exceeded 10% of our total net sales in 2024, with substantially all these sales
reported within our U.S. segment.
Sales to mass merchants in the United States accounted for approximately 38% of our total net sales in 2024 and included
all of our product categories under our Hanes, Maidenform, Playtex and JMS/Just My Size brands. Mass merchants feature
high-volume, low-cost sales of basic apparel items along with a diverse variety of consumer goods products, such as grocery
and pharmacy products and other hard lines. Our largest mass merchant customer is Walmart.
Sales to pure play e-commerce customers in the United States accounted for approximately 13% of our total net sales in
2024. We sell products that span across our product categories to pure play e-commerce customers. Our largest pure play e-
commerce customer is Amazon.
Sales to mid-tier and department stores in the United States accounted for approximately 12% of our total net sales in
2024. Mid-tier stores target a higher-income consumer than mass merchants, focus more on sales of apparel items rather than
other consumer goods such as grocery and pharmacy products. We sell all our product categories in mid-tier stores. Traditional
department stores target higher-income consumers and carry more high-end, fashion conscious products as compared to mid-
tier stores or mass merchants and tend to operate in higher-income areas and commercial centers. We sell products in our
intimate apparel, underwear, socks and other apparel categories through department stores.
Sales to other customers in the United States represented approximately 11% of our total net sales in 2024. We sell T-
shirts, golf and sport shirts and fleece sweatshirts to wholesalers and third-party embellishers primarily under our Hanes and
Hanes Beefy-T brands. We sell primarily underwear products under the Hanes brands to food, pharmacy and variety stores. We
sell products that span across our product categories to the United States military for sale to servicemen and servicewomen as
well as through discount retailers.
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With respect to net sales, internationally, approximately 51% of our net sales were wholesale sales to retailers and 49% of
our net sales were consumer-directed sales through our owned retail stores and e-commerce sites. For more information about
our sales on a geographic basis, see Note “Geographic Area Information” to our consolidated financial statements included in
this Annual Report on Form 10-K.
Manufacturing, Sourcing and Distribution
During 2024, almost 75% of the apparel units we sold were from finished goods manufactured through a combination of
facilities we own and operate, and facilities owned and operated by dedicated third-party contractors who perform some of the
steps in the manufacturing process for us, such as dyeing, cutting and/or sewing. We sourced the remainder of our finished
goods from third-party manufacturers who supply us with finished products based on our designs. In making decisions about
the location of manufacturing operations and third-party sources of supply, we consider a number of factors, including labor,
local operating costs, geopolitical factors, product quality, regional infrastructure, applicable quotas and duties and freight costs.
We believe that our balanced approach to product supply, which relies on a combination of owned, contracted and sourced
manufacturing located across different geographic regions, increases the efficiency of our operations, reduces product costs,
diversifies risk, increases flexibility and offers customers a reliable source of supply.
Finished Goods That Are Manufactured by Hanesbrands
The manufacturing process for the finished goods that we manufacture begins with raw materials we obtain from
suppliers. The principal raw materials in our product categories are cotton and synthetics. Cotton and synthetic materials are
typically spun into yarn by our suppliers, which is then knitted into cotton, synthetic and blended fabrics. We source all of our
yarn requirements from large-scale domestic and international suppliers. To a lesser extent, we purchase fabric from several
domestic and international suppliers in conjunction with our scheduled production. In addition to cotton yarn and cotton-based
textiles, we use thread, narrow elastic and trim for product identification, buttons, zippers, snaps and lace. These fabrics are cut
and sewn into finished products, either by us or by third-party contractors. We currently operate 20 manufacturing facilities.
Most of our cutting and sewing operations are strategically located in Asia, Central America and the Caribbean Basin. Alternate
sources of these materials and services are readily available.
Finished Goods That Are Manufactured by Third Parties
In addition to our own manufacturing capabilities, we also source finished goods from third-party manufacturers, also
referred to as “turnkey products.” Many of these turnkey products are sourced from international suppliers by our strategic
sourcing hubs in Asia.
All contracted and sourced manufacturing must meet our high-quality standards. Further, all contractors and third-party
manufacturers must be pre-audited and adhere to our strict supplier and business practices guidelines. These requirements
provide strict standards that, among other things, cover hours of work, age of workers, health and safety conditions, freedom of
association and conformity with local laws (including wage and hour laws) and Hanesbrands’ standards. Each new supplier
must be inspected and agree to comprehensive compliance terms prior to commencing any production on our behalf. We audit
compliance with these standards against our 265-question, scored audit protocol using both internal and external audit teams.
We are also a fully accredited participating company in the Fair Labor Association. For more information, visit
www.hbisustains.com.
Distribution
As of December 28, 2024, we distributed our products from 26 distribution centers. These facilities include 9 facilities
located in the United States and 17 facilities located outside the United States, primarily in regions where we sell our products.
We internally manage and operate 15 of these facilities, and we use third-party logistics providers who operate the other 11
facilities on our behalf.
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Inventory
We believe effective inventory management is key to our success. Because our customers generally do not purchase our
products under long-term supply contracts, but rather on a purchase order basis, effective inventory management requires close
coordination with our customer base. We seek to ensure that products are available to meet customer demands while effectively
managing inventory levels. We employ various types of inventory management techniques that include collaborative
forecasting and planning, supplier-managed inventory, key event management and various forms of replenishment management
processes. Our supplier-managed inventory initiative is intended to shift raw material ownership and management to our
suppliers until consumption, freeing up cash and improving response time. We have demand management planners in our
customer management group who work closely with customers to develop demand forecasts that are passed to the supply chain.
We also have professionals within the customer management group who coordinate daily with our larger customers to help
ensure that our customers’ planned inventory levels are in fact available at their individual retail outlets. Additionally, within
our supply chain organization we have dedicated professionals who translate the demand forecast into our inventory strategy
and specific production plans. These individuals work closely with our customer management team to balance inventory
investment/exposure with customer service targets. Since beginning our aggressive SKU and inventory reduction process in
2020, we have reduced the number of SKUs across our portfolio by nearly 40% and implemented a disciplined SKU lifecycle
management process.
Seasonality and Other Factors
Our operating results are typically subject to some variability due to seasonality and other factors. For instance, we have
historically generated higher sales during the back-to-school and holiday shopping seasons and during periods of cooler
weather, which benefits certain product categories such as socks and fleece. Our diverse range of product offerings, however,
typically mitigates some of the impact of seasonal changes in demand for certain items. Sales levels in any period are also
impacted by our customers’ decisions to increase or decrease their inventory levels of our categories in response to anticipated
consumer demand or the overall inventory levels of their other product categories. Our customers may cancel orders, change
delivery schedules or change the mix of products ordered with minimal notice to us. Media, advertising and promotion
expenses may vary from period to period during a fiscal year depending on the timing of our advertising campaigns for retail
selling seasons and product introductions.
Although the majority of our products are replenishment in nature and tend to be purchased by consumers on a planned,
rather than on an impulse basis, our sales are impacted by discretionary consumer spending trends. Discretionary spending is
affected by many factors that are outside our control, including, among others, general business conditions, interest rates,
inflation, consumer debt levels, the availability of consumer credit, currency exchange rates, taxation, energy prices,
unemployment trends and other matters that influence consumer confidence and spending. Consumers’ purchases of
discretionary items, including our products, could decline during periods when disposable income is lower, when prices
increase in response to rising costs, or in periods of actual or perceived unfavorable economic conditions. As a result,
consumers may choose to purchase fewer of our products, to purchase lower-priced products of our competitors in response to
higher prices for our products or may choose not to purchase our products at prices that reflect our price increases that become
effective from time to time.
Inflation can have a long-term impact on us because increasing costs of materials and labor may impact our ability to
maintain satisfactory margins. For example, the cost of the materials that are used in our manufacturing process, such as oil-
related commodity prices and other raw materials, including cotton, dyes and chemicals, and other costs, such as fuel, energy
and utility costs, can fluctuate as a result of inflation and other factors. Disruptions to the global supply chain due to factory
closures, port congestion, transportation delays as well as labor and container shortages may negatively impact product
availability, revenue growth and gross margins. We would work to mitigate the impact of the global supply chain disruptions
through a combination of cost savings and operating efficiencies, as well as pricing actions, which could have an adverse
impact on demand. Costs incurred for materials and labor are capitalized into inventory and impact our results as the finished
goods inventory is sold. In addition, a significant portion of our products are manufactured in countries other than the United
States and declines in the value of the U.S. dollar may result in higher manufacturing costs. Increases in inflation may not be
matched by growth in consumer income, which also could have a negative impact on spending.
Changes in product sales mix can impact our gross profit as the percentage of our sales attributable to higher margin
products, such as intimate apparel and men’s underwear, and lower margin products, such as socks, fluctuate from time to time.
In addition, sales attributable to higher and lower margin products within the same product category fluctuate from time to time.
Our customers may change the mix of products ordered with minimal notice to us, which makes trends in product sales mix
difficult to predict. However, certain changes in product sales mix are seasonal in nature, as sales of socks and fleece products
generally have higher sales during the last two quarters (July to December) of each fiscal year as a result of cooler weather,
back-to-school shopping and holidays, while other changes in product mix may be attributable to consumers’ preferences and
discretionary spending.
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Product Innovation and Marketing
A significant component of our business strategy is our strong product research and development and innovation
capabilities, including the development of new and improved apparel technology platforms, as demonstrated by the fact that in
2024, we filed 20 patent applications and had 23 patents issued in the U.S. and around the world. Our developments include our
innovative fabric platforms ComfortBlend®, FreshIQ® and XTEMP®, as well as our product design innovations such as
Comfort Flex Fit®, DreamWire® and SmoothTec®. We launched our innovative Total Support Pouch in men’s underwear,
which is now the subject of a number of patent registrations and pending applications. In 2022, we launched a new and
improved line of the Total Support Pouch platform that incorporates our X-Temp fabric technology, and we expect the patented
pouch construction to continue to play a significant role in our innovation pipeline. In 2023, we launched M by Maidenform
across retail channels, elevating the brand with bright colors, soft fabrics and youthful designs. Bonds Whoopsies, created by
parents for parents, incorporated anti-odor and absorbency technology into reusable baby products. Hanes Originals continues
to play a prominent role in our innovation pipeline, and in 2024, Bonds and Hanes continued to build on our proprietary
absorbency platform, offering Hanes training pants for kids as well as women’s and girls’ absorbency underwear. We believe
this absorbency technology has significant opportunity for platform expansion in both the underwear and activewear product
lines. The Hanes Moves collection also incorporates X-Temp all-day cooling technology and Bali Breathe is crafted from an
ultra-soft cotton modal fabric for comfort and breathable support.
Driving innovation platforms across brands and categories is a major element of our business strategy as it is designed to
meet key consumer needs and leverage advertising dollars. We leverage global expert talent and our unique supply chain model
to improve the speed at which we deliver new designs to our customers and consumers around the world. The Total Support
Pouch is now sold in eight countries, Hanes Originals in eight countries, and M by Maidenform in five countries. In late 2024,
HBI announced that Bonds will be sold in the U.S. for the first time. During 2024, our brand investment including advertising
and promotion expense, was approximately $174 million, representing 5.0% of our total net sales compared to $126 million or
3.5% in 2023. We advertise in consumer and trade publications, on television and through digital initiatives including social
media, online video and other mobile platforms. We also participate in cooperative advertising on a shared cost basis with
major retailers in print and digital media and television and engage in other performance based marketing.
Competition
The basic apparel market is highly competitive and rapidly evolving. Competition generally is based upon brand, comfort,
fit, style and price. Our businesses face competition today from other large domestic and foreign corporations and
manufacturers. In the United States, we compete with Fruit of the Loom, Inc., a subsidiary of Berkshire Hathaway Inc., through
its own offerings and those of its Vanity Fair Intimates offerings. Other global competitors in our innerwear category include
Victoria’s Secret & Co. and Jockey International, Inc. We also compete with many small manufacturers across all of our
business segments. Additionally, mass merchant retailers, department stores and other retailers, including many of our
customers, market and sell basic apparel products under private labels and controlled brands that compete directly with our
brands. Our competitive strengths include our strong iconic brands with leading market positions, our industry-leading
innovation, our high-volume, core products focus, our significant scale of operations and breadth of distribution, our world-
class global supply chain and our strong customer relationships. We continually strive to improve in each of these areas.
Intellectual Property
We market our products under hundreds of our own trademarks in the United States and other countries around the world,
the most widely recognized of which are Hanes, Bonds, Bali, Maidenform, Sheridan, Playtex, Bras N Things, Berlei,
Wonderbra, Zorba, JMS/Just My Size and Comfortwash. Some of our products are sold under trademarks that have been
licensed from third parties, such as Polo Ralph Lauren men’s underwear.
Some of our trademarks are licensed to third parties. In the United States and Canada, the Playtex trademark is owned by
Playtex Marketing Corporation, of which we own a 50% interest and which grants to us a perpetual royalty-free license to the
Playtex trademark on and in connection with the sale of apparel in the United States and Canada. In Europe, we license the
Playtex and Wonderbra trademarks to the DIM Brands International Group for the sale of innerwear products in the European
Union, the United Kingdom and a number of European countries. The DIM Brands International Group also has the right to
distribute Maidenform-branded innerwear products in the European Union, the United Kingdom, and several other European
countries. Outside the United States and Canada, we own the Playtex trademark and perpetually license such trademark to an
unaffiliated third party for non-apparel products. We own the Berlei trademark in Australia, New Zealand, South Africa and a
limited number of smaller jurisdictions. Apart from these jurisdictions, the Berlei trademark is owned by an unaffiliated third
party in most major markets, including Japan, China, the United States and the European Union. Our trademarks are important
to our marketing efforts and have substantial value.
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We aggressively protect these trademarks from infringement and dilution through appropriate measures, including court
actions and administrative proceedings. Although the laws vary by jurisdiction, trademarks generally remain valid as long as
they are in use and/or their registrations are properly maintained. Most of the trademarks in our portfolio, including our core
brands, are covered by trademark registrations in the countries of the world in which we do business, in addition to many other
jurisdictions around the world, with a registration period of 10 years in most countries. Generally, trademark registrations can
be renewed indefinitely as long as the trademarks are in use. We have an active program designed to ensure that our trademarks
are registered, renewed, protected and maintained. We plan to continue to use all of our core trademarks and plan to renew the
registrations for such trademarks as needed.
We also own a number of copyrights. Most of our copyrights are unregistered, although we have a sizable portfolio of
copyrighted lace designs that are the subject of a number of registrations at the United States Copyright Office.
We place high importance on product innovation and design, and a number of these innovations and designs are the
subject of patents. When appropriate, we take the necessary steps to enforce our patent rights against infringement. For
example, we have taken multiple actions in the United States and internationally to protect our Total Support Pouch patent
family. That said, we do not regard any segment of our business as being dependent upon any single patent or group of related
patents. In addition, we own proprietary trade secrets, technology and know-how that we have not patented.
Governmental Regulation and Environmental Matters
We are subject to federal, state and local laws and regulations in the United States that could affect our business, including
those promulgated under the Occupational Safety and Health Act, the Consumer Product Safety Act, the Flammable Fabrics
Act, the Textile Fiber Product Identification Act, the rules and regulations of the Consumer Products Safety Commission and
various environmental laws and regulations. Some of our international businesses are subject to similar laws and regulations in
the countries in which they operate. Certain of our products are required to be manufactured in compliance with applicable
governmental standards. Our operations also are subject to various international trade agreements and regulations. We believe
that we are in compliance in all material respects with all applicable governmental regulations.
We are also subject to various domestic and international laws and regulations relating to generating emissions, water
discharges, waste, product and packaging content and workplace safety. Noncompliance with these laws and regulations may
result in substantial monetary penalties and criminal sanctions. We are aware of hazardous substances or petroleum releases at
certain of our facilities and are working with the relevant environmental authorities to investigate and address such releases. We
also have been identified as a “potentially responsible party” at certain waste disposal sites in the United States undergoing
investigation and cleanup under the federal Comprehensive Environmental Response, Compensation and Liability Act
(commonly known as Superfund) or state Superfund equivalent programs. Where we have determined that a liability has been
incurred and the amount of the loss can reasonably be estimated, we have accrued amounts on our balance sheet for losses
related to these sites. Compliance with environmental laws and regulations and our remedial environmental obligations
historically have not had a material impact on our operations, and we are not aware of any proposed regulations or remedial
obligations that could trigger significant costs or capital expenditures in connection with such compliance.
Compliance with government regulations, including environmental regulations, has not had, and based on current
information and the applicable laws and regulations currently in effect, is not expected to have a material effect on our capital
expenditures (including expenditures for environmental control facilities), earnings or competitive position. However, laws and
regulations may be changed, accelerated or adopted that impose significant operational restrictions and compliance
requirements upon our Company and which could negatively impact our operating results. See Part I, Item 1A. “Risk Factors”
in this Annual Report on Form 10-K.
Sustainability
Unlike most apparel companies, we produce nearly 75% of our total unit volume in facilities we own or control. Owning
the majority of our supply chain not only impacts cost, scale and flexibility, but also allows us to adhere to best-in-class
management and environmental practices. We are protective of our strong reputation for corporate citizenship and social
responsibility and proud of our significant achievements in the areas of environmental stewardship, workplace quality and
community building.
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Issues such as climate change, water stress and unethical labor or human rights practices within supply chains pose risks
to our business and our ability to produce our products in an ethical and sustainable manner. We assess and evaluate these risks
annually as part of our Enterprise Risk Management process, which is overseen by the Audit Committee of our Board of
Directors. We also have a dedicated team responsible for managing our global sustainability program. Our Chief Executive
Officer is responsible for setting overall business strategy, including our commitment to sustainability. He directly oversees our
Sustainability Executive Steering Committee which has ultimate management oversight of our global sustainability program
and meets quarterly to assess the program’s effectiveness. To drive the program across our entire organization on a global basis,
we have also put in place internal resources from multiple countries and functional areas who are responsible for executing our
global sustainability initiatives and goals. Our 2025 and 2030 goals, which are discussed on our sustainability website,
www.hbisustains.com, were set prior to the divestiture in September 2024 of our global Champion business and therefore
include the pre-divestiture impact of the Champion business. As a result, we have been considering and evaluating our
sustainability objectives following the divestiture, including the climate-related impacts on and risks to our business going
forward. We expect to announce updated sustainability goals in the second quarter of 2025 and are excited to continue being an
industry leader in sustainability, where our approach is framed in our core pillars of People, Planet and Product.
We approach sustainability from a broad, holistic perspective and focus our efforts in areas addressed by the United
Nations’ Sustainable Development Goals, such as: good health and well-being; quality education; gender equality; climate
action; clean water and sanitation; affordable and clean energy; economic growth; reduced inequalities; and responsible
consumption and production.
We have a long-standing commitment to sustainability. Hanesbrands earned a leadership level A- score in both the 2024
CDP Climate Change Report and the 2024 CDP Water Security Report, placing us near the top of a list of more than 22,000
companies rated. In 2021, we submitted science-based greenhouse gas goals to the Science-Based Targets Initiative (“SBTi”)
which call for a 46.2% reduction in direct emissions and a 27.5% reduction in indirect emissions by 2030. As of 2023, we
exceeded those goals, with a 51.5% reduction in Scope 1 and 2 emissions and a 27.7% reduction in Scope 3 emissions against
our 2019 baseline. We are also members of Cascale (formerly known as the Sustainable Apparel Coalition) and have been
recognized for our transparency, environmental performance and socially responsible business practices by such organizations
as CDP, Baptist World Aid, Fundahrse, Fundemas, and Fashion Revolution.
Human Capital Management
Employees and Labor Relations
As of December 28, 2024, we had approximately 41,000 employees, of which approximately 93% (approximately 38,000
employees) are located outside the United States. Approximately 79% of our employees (approximately 32,000 employees) are
employed in our large-scale supply chain facilities located primarily in Central America, the Caribbean Basin and Asia.
Approximately 93% of our employees (approximately 38,000 employees) consist of full-time employees. As of December 28,
2024, no employees in the United States were covered by collective bargaining agreements. A significant portion of our
employees based in foreign countries are represented by unions or are subject to trade-sponsored or governmental agreements.
Health and Safety
We prioritize the health and safety of our employees. We have created and implemented processes and training programs
to maintain safe and healthy work environments in our offices, manufacturing facilities, distribution centers and retail stores,
and we review and monitor our performance closely. During the year ended December 28, 2024, our Occupational Safety and
Health Administration (“OSHA”) recordable rate was 0.29, compared to 0.33 prior year. We offer employee benefits to our
global workforce to ensure access to care, including onsite wellness clinics and mental health resources.
Employee Demographics
As a global company operating in approximately 22 countries on six continents, our employees represent different
backgrounds, ethnicities, cultures, religions, genders, sexual orientations and ages. We believe these different perspectives
strengthen our business and we strive to build an inclusive culture. As of December 28, 2024, our global workforce was
approximately 36% male and 64% female, and of our domestic workforce, our employees were approximately 54% white,
approximately 23% Black or African American, approximately 15% Hispanic, approximately 5% Asian, approximately 1%
American Indian or Alaskan Native and approximately 2% two or more races or other. As of December 28, 2024, our
representation of people of color at the senior manager and above levels within our U.S. workforce was approximately 18%,
and representation of women at the senior manager and above levels within our U.S. workforce was approximately 51%.
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Talent Development
Our talent strategy is focused on attracting the best global talent, recognizing and rewarding their performance, and
continually developing, engaging and retaining them. We regularly review succession plans and conduct annual assessments to
identify talent needs, assess how we are positioned from a talent perspective, and prioritize actions to identify and develop
talent. We also cultivate a learning environment that drives individual and business results by developing employees to reach
their full potential. HBI University, our global learning platform, provides employees with access to thousands of e-learning
courses, as well as instructor-led and virtual courses to strengthen technical skills, leadership, productivity, business acumen
and soft skills. In 2024, as part of our online course offerings, associates completed over 11,000 hours of micro-learning
modules. In addition, world-class management and leadership development programs in our large manufacturing hubs in
Central America, the Caribbean Basin and Asia provide the foundational skills required for key talent and rising managers in
our global supply chain and develop capacities for current and future leaders of the organization.
Culture and Engagement
The results of our latest global engagement survey completed in 2023 indicated that we excel in areas including overall
engagement, clear expectations and a link between employees’ work and our goals and objectives, understanding strategic goals
of the organization, and employees finding their jobs challenging and interesting. In 2024, we completed surveys in certain
regions, the results of which were consistent with those of the prior year’s global survey. We plan to launch another global
engagement survey in 2025.
Item 1A. Risk Factors
This section describes circumstances or events that could have a negative effect on our financial results or operations or
that could change, for the worse, existing trends in our businesses. The occurrence of one or more of the circumstances or
events described below could have a material adverse effect on our financial condition, results of operations and cash flows or
on the trading price of our common stock. The risks and uncertainties described in this Annual Report on Form 10-K are not the
only ones facing us. Additional risks and uncertainties that currently are not known to us or that we currently believe are
immaterial also may adversely affect our businesses and operations.
Strategic Risks
Our future success depends in part on our ability to successfully implement our strategic plan and achieve our global
business strategies.
We are implementing a significant number of strategic initiatives focused on building a consumer-centric company,
accelerating growth across business segments, enhancing our capabilities and strengthening the foundation of our company.
There can be no assurance that these or other future strategic initiatives will be successful to the extent we expect, or at all.
Furthermore, we are investing significant resources in these initiatives, and the costs of the initiatives may outweigh their
benefits. We cannot assure you that our management will be able to manage these initiatives effectively or implement them
successfully. If we miscalculate the resources or time we need to complete these strategic initiatives or fail to implement them
effectively or at all, our business and operating results could be adversely affected.
We operate in a highly competitive and rapidly evolving market, and our market share and results of operations could be
adversely affected if we fail to compete effectively in the future.
The basic apparel market is highly competitive and rapidly evolving. Competition generally is based upon brand, comfort,
fit, style and price. Our businesses face competition today from other large domestic and foreign corporations and
manufacturers, as well as mass merchant retailers, department stores and other retailers, including many of our customers, that
market and sell basic apparel products under private labels that compete directly with our brands. Also, online retail shopping is
rapidly evolving, and we expect competition in the e-commerce market to intensify in the future as the Internet facilitates
competitive entry and comparison shopping. If we do not successfully develop and maintain a relevant omni-channel
experience for our customers, our businesses and results of operations could be adversely impacted. Increased competition may
result in a loss of or a reduction in shelf space and promotional support and reduced prices, in each case decreasing our cash
flows, operating margins and profitability. Our ability to identify and capitalize on retail trends, including technology, e-
commerce and other process efficiencies to gain market share and better service our customer base will, in large part, determine
our future success. If we fail to compete successfully, our market share, results of operations and financial condition will be
materially and adversely affected.
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The rapidly changing retail environment could result in the loss of or material reduction in sales to certain of our
customers, which could have a material adverse effect on our business, results of operations, financial condition and cash
flows.
The retail environment is highly competitive as consumers are increasingly embracing shopping online and through
mobile commerce applications. As a result, a greater portion of total consumer expenditures with retailers is occurring online
and through mobile commerce applications. If our brick-and-mortar retail customers fail to maintain or grow their overall
market position through the integration of physical retail presence and digital retail, these customers may experience financial
difficulties including store closures, bankruptcies or liquidations. This could, in turn, create difficulty in moving our products to
market, which would increase inventories or backlog, substantially reduce our revenues, increase our credit risk and ultimately
have a material adverse effect on our results of operations, financial condition and cash flows.
If our advertising, marketing, promotional and innovation programs are unsuccessful, or if our competitors are more
effective with their programs than we are, our sales could be negatively affected.
Ineffective advertising, marketing, promotional and innovation programs could inhibit our ability to maintain brand
relevance and could ultimately decrease sales. While we use social media, websites, mobile applications, email, print and
television to promote our products and attract customers, some of our competitors may expend more for their programs than we
do, or use different approaches than we do that prove more successful, any of which may provide them with a competitive
advantage. We invest in product innovation in an effort to drive consumer interest in, and increase demand for, our products
and to differentiate our products in the market, though some of our competitors’ innovation programs may be better funded or
be more positively received by consumers, resulting in a competitive advantage for those competitors. If our programs are not
effective or require increased expenditures that are not offset by increased sales, our revenue and results of operations could be
negatively impacted.
We will be a less diversified business following the sale of our global Champion business and the exit from our U.S.
outlet store business, which may adversely affect our results of operations and financial condition.
In July 2024, we completed the exit from our U.S. outlet store business and in September 2024, we completed the sale of
our global Champion business, with the exception of the sale of the operating assets of the Champion Japan business, for which
we reached an agreement in December 2024. As a result, we are a smaller company that is more focused on our innerwear and
basic apparel business. Although we work to minimize the impact of macroeconomic headwinds or changes in consumer
preferences, such events could have a greater impact on our business following these divestitures. In addition, the
diversification of revenues, costs, and cash flows will diminish, such that our results of operations, cash flows, working capital,
effective tax rate, and financing requirements may be subject to increased volatility. We may experience decreased capital
allocation efficiency and flexibility because we can no longer use cash flow from the global Champion business or the U.S.
outlet store business to fund aspects of our business strategy. All of these factors could have a material adverse effect on our
business, results of operations, and financial condition.
Our customers may require products on an exclusive basis, forms of economic support and other changes that could be
harmful to our business.
Customers may require us to provide them with some of our products on an exclusive basis, which could cause an
increase in the number of stock keeping units, or “SKUs,” we must carry and, consequently, increase our inventory levels and
working capital requirements. Moreover, our customers may seek markdown allowances, incentives and other forms of
economic support, which reduce our gross margins and affect our profitability. Our financial performance is negatively affected
by these pressures when we are forced to reduce our prices without being able to correspondingly reduce production costs.
Operational Risks
Economic conditions may adversely impact demand for our products, reduce access to credit and cause our customers,
suppliers and other business partners to suffer financial hardship, all of which could adversely impact our business, results
of operations, financial condition and cash flows.
Although the majority of our products are replenishment in nature and tend to be purchased by consumers on a planned,
rather than on an impulse, basis, our sales are impacted by discretionary spending by consumers. Discretionary spending is
affected by many factors that are outside of our control, including, among others, general business conditions, interest rates,
inflation, consumer debt levels, the availability of consumer credit, currency exchange rates, taxation, energy prices,
unemployment trends and other matters that influence consumer confidence and spending. Reduced sales at our wholesale
customers may lead to lower retail inventory levels, reduced orders to us or order cancellations. These lower sales volumes,
along with the possibility of restrictions on access to the credit markets, may result in our customers experiencing financial
difficulties including store closures, bankruptcies or liquidations. This may result in higher credit risk relating to receivables
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from our customers who are experiencing these financial difficulties. Any of these occurrences could have a material adverse
effect on our business, results of operations, financial condition and cash flows.
In addition, economic conditions, including decreased access to credit, may result in financial difficulties leading to
restructurings, bankruptcies, liquidations and other unfavorable events for our suppliers of raw materials and finished goods,
logistics and other service providers and financial institutions which are counterparties to our credit facilities and derivatives
transactions. In addition, the inability of these third parties to overcome these difficulties may increase. If third parties on which
we rely for raw materials, finished goods or services are unable to overcome financial difficulties and provide us with the
materials and services we need, or if counterparties to our credit facilities or derivatives transactions do not perform their
obligations, our business, results of operations, financial condition and cash flows could be adversely affected.
We rely on a relatively small number of customers for a significant portion of our sales, and the loss of or material
reduction in sales to any of our top customers could have a material adverse effect on our business, results of operations,
financial condition and cash flows.
In 2024, our top 10 customers accounted for approximately 64% of our total net sales. Our largest customers in 2024 were
Walmart, Amazon, and Target, which accounted for 24%, 13%, and 11% of our total net sales, respectively. We expect that
these customers will continue to represent a significant portion of our net sales in the future. Moreover, our top customers are
the largest market participants in our primary distribution channels across all of our product lines. We generally do not enter
into purchase agreements that obligate our customers to purchase our products, and as a result, most of our sales are made on a
purchase order basis. A decision by any of our top customers to significantly decrease the volume of products purchased from
us could substantially reduce revenues and may have a material adverse effect on our business, results of operations, financial
condition and cash flows. In addition, if any of our customers devote less selling space to basic apparel products in general or
our products specifically, our sales to those customers could be reduced even if we maintain our share of their basic apparel
business.
Any inadequacy, interruption, integration failure, breach or cybersecurity incident with respect to our information
technology could harm our ability to effectively operate our business and have a material adverse effect on our business,
results of operations, financial condition and cash flows.
Our ability to effectively manage and operate our business depends significantly on information technology systems. The
failure of these systems to operate effectively and support global growth and expansion, problems with integrating various data
sources, challenges in transitioning to upgraded or replacement systems, difficulty in integrating new systems or systems of
acquired businesses, or a breach in security of these systems could adversely impact the operations of our business.
Despite policies, procedures and programs designed to ensure the integrity of our information technology systems, we
may not be effective in identifying and mitigating every risk or cybersecurity threat to which we are exposed, and we have
experienced a ransomware attack that we previously disclosed. Furthermore, from time to time we rely on information
technology systems which may be managed, hosted, provided and/or accessed by third parties or their vendors to assist in
conducting our business. While we attempt to work with trusted third parties and exercise ongoing diligence over critical third-
party business partners’ security measures, third-party relationships and their access to our data and systems may create
difficulties in anticipating, managing, and implementing adequate preventative measures or fully mitigating harms after a
breach.
Cybersecurity threat actors’ attacks may include computer viruses or other malicious codes, ransomware, unauthorized
access attempts, denial of service attacks and large-scale automated attacks, phishing, social engineering, hacking and other
schemes. Other incidents may result from human or technical errors, fraud, phishing, or other attempts to cause confidential
information, payments, account access, or other data to be transmitted to an unintended recipient. Breaches of our or third
parties’ networks may result in the loss of valuable business data or intellectual property, misappropriation of our consumers’ or
employees’ personal data, or a disruption of our business, which could give rise to unwanted media attention, impair our ability
to operate our business, materially damage our customer relationships and reputation, and result in lost sales, fines or litigation,
regulatory intervention, or investigations, and costs related to remediation or the payment of ransom.
Moreover, there are various laws and regulations regarding privacy and the collection, storage, sharing, use, processing,
transfer, disclosure and protection of personal data. Globally, data privacy laws, such as the General Data Protection Regulation
(“GDPR”) and other data protection laws in Europe, the United Kingdom General Data Protection Regulation (“UK-GDPR”)
in the United Kingdom, state laws in the U.S. on privacy, data and related technologies, such as the California Consumer
Privacy Act and amendments from the California Privacy Rights Act (together, “CPRA”) create new compliance obligations
and expand the scope of potential liability, either jointly or severally with our customers and suppliers. Non-compliance with
these laws could result in penalties or significant legal liability. Although we take reasonable efforts to comply with all
applicable laws and regulations, there can be no assurance that we will not be subject to regulatory action, including fines, in
the event of a data security incident or allegations of a privacy or data protection violation. We or our third-party service
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providers or business partners could be adversely affected if legislation or regulations are expanded to require changes in
business practices or if governing jurisdictions interpret or implement their legislation or regulations in ways that negatively
affect us. Misuse of or failure to secure personal data, or failure to maintain data protection compliance programs, could also
result in monetary penalties, litigation, declining customer confidence, and damage to our reputation and credibility.
Our inability to successfully recover should we experience a disaster or other business continuity problem could cause
material financial loss, loss of human capital, regulatory actions, reputational harm, or legal liability.
We have a complex global supply chain and distribution network that supports our ability to consistently provide our
products to our customers. Should we experience a local or regional disaster or other business continuity problem, such as an
earthquake, tsunami, terrorist attack, pandemic or other natural or man-made disaster, our continued success will depend, in
part, on the safety and availability of our personnel, our office facilities, and the proper functioning of our computer,
telecommunication and other systems and operations. If we cannot respond to disruptions in our operations, for example, by
finding alternative suppliers or replacing capacity at key manufacturing or distribution locations, or cannot quickly repair
damage to our information, production or supply systems, we may be late in delivering, or be unable to deliver, products to our
customers. Climate change serves as a risk multiplier increasing both the frequency and severity of natural disasters that may
affect our worldwide business operations. Therefore, forecasting disruptive events and building additional resiliency into our
operations accordingly will become an increasing business imperative. Any disaster or other business continuity problem could
result in, among other negative impacts, reputational damage, lost sales, cancellation charges or excessive markdowns.
We must successfully implement, maintain and upgrade our IT systems as appropriate, and our failure to do so,
including a failure to successfully implement our new global enterprise resource planning system, could have a material
adverse effect on our business, financial condition and results of operations.
From time to time, we expand and improve our IT systems to support our business going forward. Consequently, we are
in the process of implementing, and will continue to invest in and implement, modifications and upgrades to our IT systems and
procedures, including making changes to legacy systems or acquiring new systems with new functionality, and building new
policies, procedures, training programs and monitoring tools.
We are engaged in the planning and preparation of implementing of a new global enterprise resource planning system
(“ERP”). Over several years the implementation will require significant investment of human and financial resources. The ERP
is designed to efficiently maintain our financial records and provide information important to the operation of our business to
our management team. In implementing the ERP, we may experience significant increases to inherent costs and risks associated
with changing and acquiring these systems, policies, procedures and monitoring tools, including capital expenditures, additional
operating expenses, demands on management time and other risks and costs of delays or difficulties in transition and
integration. Any significant disruption or deficiency in the design and implementation of the ERP may adversely affect our
ability to process orders, ship product, send invoices and track payments, fulfill contractual obligations, maintain effective
disclosure controls and internal control over financial reporting or otherwise operate our business. These implementations,
modifications and upgrades may not result in productivity improvements at a level that outweighs the costs of implementation,
or at all.
The use of artificial intelligence in our operations poses inherent risks that could adversely affect our business.
We use artificial intelligence to enhance efficiency and effectiveness and to help further inform or automate our business
decisions and risk management practices. In addition, third-party service providers may develop or incorporate artificial
intelligence capabilities and technology in certain business processes and services. Such development and use of artificial
intelligence may present risks to our business. Also, the rapidly evolving legal and regulatory environment relating to artificial
intelligence could impact our implementation of artificial intelligence technology and increase compliance costs and the risk of
non-compliance. Although we endeavor to use artificial intelligence responsibly, there can be no assurance that we will be fully
successful in doing so, and flaws, breaches or malfunctions in these systems could lead to operational disruptions, data loss,
erroneous decision-making, regulatory scrutiny or legal liability impacting our operations, financial condition and reputation.
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The loss of one or more of our suppliers of finished goods or raw materials may interrupt our supplies and materially
harm our business.
We purchase all of the raw materials used in our self-manufactured products and our sourced finished goods from a
limited number of third-party suppliers and manufacturers. Our ability to meet our customers’ needs depends on our ability to
maintain an uninterrupted supply of raw materials and finished products from our third-party suppliers and manufacturers. Our
business, financial condition or results of operations could be adversely affected if any of our principal third-party suppliers or
manufacturers experience financial difficulties that they are not able to overcome resulting from worldwide economic
conditions, production problems, difficulties in sourcing raw materials, lack of capacity or transportation disruptions, or if for
these or other reasons they raise the prices of the raw materials or finished products we purchase from them. The magnitude of
this risk depends upon the timing of any interruptions, the materials or products that the third-party manufacturers provide and
the volume of production.
Our dependence on third parties for raw materials and finished products subjects us to the risk of supplier failure and
customer dissatisfaction with the quality of our products. Quality failures by our third-party manufacturers or changes in their
financial or business condition that affect their production could disrupt our ability to supply quality products to our customers
and thereby materially harm our business.
Our results of operations could be materially harmed if we are unable to manage our inventory effectively and accurately
forecast demand for our products.
We are faced with the ongoing challenge of balancing our inventory levels with our ability to meet marketplace needs. As
a result, our ability to accurately forecast demand for our products can be adversely affected by a variety of factors, including
our ability to anticipate and respond effectively to evolving consumer preferences and to translate these preferences into
marketable product offerings, as well as unanticipated changes in general economic conditions or other factors, which result in
cancellations of orders or a reduction or increase in the rate of reorders placed by retailers.
Inventory reserves can result from the complexity of our supply chain, a long manufacturing process and the seasonal
nature of certain products. Most of our sales are made on a purchase order basis. As a result, we often schedule internal
production and place orders for products with third-party manufacturers before our customers’ orders are firm. If we fail to
accurately forecast consumer demand, we may experience excess inventory levels or a shortage of product required to meet the
demand. Inventory levels in excess of consumer demand may result in inventory write-downs and the sale of excess inventory
at discounted prices, which could have an adverse effect on the image and reputation of our brands and negatively impact
profitability. On the other hand, if we underestimate demand for our products, our manufacturing facilities or third-party
manufacturers may not be able to produce products to meet consumer requirements, and this could result in delays in the
shipment of products and lost revenues, as well as damage to our reputation and relationships. These risks could have a material
adverse effect on our brand image as well as our results of operations and financial condition.
Additionally, sudden decreases in the costs for materials may result in the cost of inventory exceeding the cost of new
production. Excess inventory charges can reduce gross margins or result in operating losses, lowered plant and equipment
utilization and lowered fixed operating cost absorption, all of which could have a material adverse effect on our business,
results of operations, or our ability to satisfy certain covenants in our Senior Secured Credit Facility.
Our business depends on our senior management team and other key personnel.
Our success depends upon the continued contributions of our senior management team and other key personnel, some of
whom have unique talents and experience that would be difficult to replace. The loss or interruption of the services of a member
of our senior management team or other key personnel could have a material adverse effect on our business during the
transitional period that would be required for a successor to assume the responsibilities of the position. Our future success will
also depend on our ability to develop and/or recruit employees with the core competencies needed to support our growth in
global markets and in new products or services. We may not be able to attract or retain these employees, which could adversely
affect our business.
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We had approximately 41,000 employees worldwide as of December 28, 2024, and our business operations and financial
performance could be adversely affected by changes in our relationship with our employees or changes to United States or
foreign employment regulations.
We had approximately 41,000 employees worldwide as of December 28, 2024, approximately 38,000 of whom were
outside of the United States. This means we have a significant exposure to changes in domestic and foreign laws governing our
relationships with our employees, including wage and hour laws and regulations, fair labor standards, unemployment tax rates,
workers’ compensation rates, citizenship requirements and payroll taxes, which likely would have a direct impact on our
operating costs. A significant increase in minimum wage or overtime rates in countries where we have employees could have a
significant impact on our operating costs and may require that we relocate those operations or take other steps to mitigate such
increases, all of which may cause us to incur additional costs, expend resources responding to such increases and lower our
margins.
In addition, a significant number of our international employees are represented by unions or are subject to trade
sponsored or governmental agreements. If there were a significant increase in the number of our employees who are members
of labor organizations or become parties to collective bargaining agreements, we would become vulnerable to a strike, work
stoppage or other labor action by these employees that could have an adverse effect on our business.
Public health emergencies or outbreaks of epidemics, pandemics, or contagious diseases have disrupted, and could in the
future disrupt, our operations and materially and adversely affect our business, financial condition, and results of
operations.
Widespread public health emergencies or outbreaks of epidemics, pandemics, or contagious diseases, such as the
COVID-19 pandemic, have had, and could in the future have, a material adverse effect on our business, financial condition, and
results of operations. The full extent to which a global health crisis may impact our business and operating results would
depend on future developments that are highly uncertain and cannot be accurately predicted, including new medical and other
information that may emerge as a result and the actions by governmental entities or others to contain it or treat its impact.
The impacts of a severe health crisis could pose the risk that we or our employees, suppliers, customers and others may be
restricted or prevented from conducting, or adversely modify, our business activities for indefinite or intermittent periods of
time, including as a result of employee health and safety concerns, shutdowns, shelter in place orders, travel restrictions and
other actions and restrictions that may be prudent or required by governmental authorities. A global health crisis could also
impact our customers’ purchasing behavior or decisions, including reduced demand for our products that could continue for an
extended period of time.
The risks associated with climate change and other environmental impacts and increased focus by stakeholders on
corporate responsibility issues, including those associated with climate change, could negatively affect our business and
operations.
Our business is susceptible to risks associated with climate change, including through disruption to our supply chain and
the productivity of our contract manufacturing, potentially impacting the production and distribution of our products and
availability and pricing of raw materials. Large portions of our supply chain are located in Central America and the Caribbean,
which areas have been and we expect will continue to be impacted by hurricanes. Increased frequency and intensity of weather
events (such as storms and floods) due to climate change could also lead to more frequent store closures and/or lost sales as
customers prioritize basic needs.
In many countries, governmental bodies are enacting new or additional legislation and regulations to reduce or mitigate
the potential impacts of climate change or impose certain climate-related disclosures and reporting obligations. We may
experience increased costs for energy, production, transportation, and raw materials, increased capital expenditures, or
increased insurance premiums and deductibles, as a result of compliance with these laws and regulations, which could adversely
impact our results of operations. The proposal and implementation of climate-related disclosure and reporting obligations have
resulted in, and are likely to continue to result in, increased general and administrative expenses and increased management
time and attention spent on compliance with such regulations and expectations. Inconsistency of legislation and regulations
among jurisdictions may also affect the costs of compliance with such laws and regulations.
There is also increased focus from our stakeholders, including consumers, employees and investors, on corporate
responsibility matters, sometimes in conflicting manners. There can be no assurance that our stakeholders will agree with our
strategy or that we will be successful in achieving our goals. Failure to implement our strategy or achieve our goals could
damage our reputation, causing our investors or consumers to lose confidence in our company and brands, and negatively
impact our operations.
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Financial Risks
Our business depends on consumer purchases of discretionary items, which can be negatively impacted during an
economic downturn or periods of inflation. This could materially impact our sales, profitability, results of operations and
financial condition.
Many of our products may be considered discretionary items for consumers. Many factors impact discretionary spending,
including general economic conditions, unemployment, the availability of consumer credit and inflationary pressures and
consumer confidence in future economic conditions. Global economic conditions may continue to be uncertain, and the
potential impacts of inflation volatility in the United States (our largest market), as well as globally, remain unknown, making
trends in consumer discretionary spending unpredictable. Historically, consumer purchases of discretionary items tend to
decline during recessionary periods when disposable income is lower or during other periods of economic instability or
uncertainty, which may lead to declines in sales and slow our long-term growth expectations. Any near or long-term economic
disruptions in markets where we sell our products, particularly in the United States, Asia Pacific or other key markets, may
negatively impact and materially harm our sales, profitability and financial condition and our prospects for growth.
Additionally, we primarily operate our own manufacturing facilities and nearly 75% of the apparel units that we sell are
manufactured in our own facilities or those of dedicated contractors. While we believe that our internal manufacturing
capability is a strong competitive advantage in terms of cost of goods and operational efficiency, and despite our efforts to build
flexibility into our manufacturing process, in the event of a sudden, material decrease in demand for our products, particularly
in the United States, Asia Pacific or other key markets for any of the reasons stated above, even if we successfully adjust
production to mitigate excess inventory levels, we may not be able to fully mitigate our fixed costs related to our manufacturing
footprint such as wages, manufacturing time-out costs and depreciation in the near term for us to quickly and sufficiently adapt
to adverse market conditions. If this were to occur, there could be a material adverse effect to our results of operations, financial
condition and profitability.
Significant fluctuations and volatility in the price of various input costs, such as cotton and oil-related materials, utilities,
freight and wages, may have a material adverse effect on our business, results of operations, financial condition and cash
flows.
Inflation can have a long-term impact on us because increasing costs of materials and labor may impact our ability to
maintain satisfactory margins. For example, we have recently experienced significant inflation in labor, materials and shipping
costs. The cost of the materials that are used in our manufacturing process, such as oil-related commodities and other raw
materials, including cotton, dyes and chemicals, and other costs, such as fuel, energy and utility costs, can fluctuate as a result
of inflation and other factors. Similarly, a significant portion of our products are manufactured in other countries and declines in
the value of the U.S. dollar may result in higher manufacturing costs. In addition, sudden decreases in the costs for materials
may result in the cost of inventory exceeding the cost of new production, which could result in lower profitability, particularly
if these decreases result in downward price pressure. If we incur volatility in costs that we are unable to offset through price
adjustments or improved efficiencies, or if our competitors’ unwillingness to follow our price changes results in downward
price pressure, our business, results of operations, financial condition and cash flows may be adversely affected.
Our profitability may decline or our growth may be negatively impacted as a result of increasing pressure on pricing.
Our industry is subject to significant pricing pressure caused by many factors, including intense competition,
consolidation in the retail industry, pressure from retailers to reduce the costs of products and changes in consumer demand.
These factors may cause us to reduce our prices or engage in more promotional activity than we anticipate, which could
negatively impact our margins and cause our profitability to decline if we are unable to offset price reductions with comparable
reductions in operating costs. Ongoing and sustained promotional activities could negatively impact our brand image. On the
other hand, if we are unwilling to engage in promotional activity on a scale similar to that of our competitors, for instance, to
protect our premium brand positioning, and unable to simultaneously offset declining promotional activity with increased sales
at premium price points, our ability to achieve short-term growth targets may be negatively impacted, which could have a
material adverse effect on our results of operations.
We are subject to certain risks as a result of our indebtedness.
Our indebtedness primarily includes (i) our senior secured credit facility (the “Senior Secured Credit Facility”), which
includes a $1 billion revolving loan facility due 2026 (the “Revolving Loan Facility”), a portion of which is available to be
borrowed in Euros or Australian dollars, a term loan facility due 2026 (the “Term Loan A Facility”) and a term loan facility due
2030 (the “2023 Term Loan B Facility”) (ii) our $600 million 9.000% Senior Notes due 2031 (the “9.000% Senior Notes”), (iii)
our $900 million 4.875% Senior Notes due 2026 (the “4.875% Senior Notes”) and (iv) our accounts receivable securitization
facility due 2025 (the “ARS Facility”), which permits borrowings up to $175 million.
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The Senior Secured Credit Facility, as amended, contains restrictions that affect, and in some cases significantly limit or
prohibit, among other things, our ability to borrow funds, pay dividends or make other distributions, make investments, engage
in transactions with affiliates, or create liens on our assets. Covenants in the Senior Secured Credit Facility and the ARS
Facility require us to maintain a minimum interest coverage ratio and a maximum total debt to EBITDA (earnings before
interest, income taxes, depreciation expense and amortization), or leverage ratio. Subject to restrictions in the Senior Secured
Credit facility, as amended, we may add one or more tranches of term loans or increase the commitments under the Revolving
Loan Facility after the Extended Covenant Relief Period has ended so long as certain conditions are satisfied, including, among
others, that no default or event of default is in existence, we are in pro forma compliance with the financial covenants set forth
in the Senior Secured Credit Facility and our senior secured leverage ratio is not greater than 3.50 to 1.00 on a pro forma basis
after giving effect to the incurrence of such indebtedness.
In 2024, the Company paid down $1,127,483 of its outstanding term debt under the Senior Secured Credit Facility, of
which $1,083,233 was a result of accelerated debt payments using a combination of cash generated from operations and net sale
proceeds from the Initial Closing of the sale of the global Champion business, which was completed on September 30, 2024.
See Note “Assets and Liabilities of Businesses Held for Sale” for additional information.
The indentures governing the Senior Notes also restrict our ability to incur additional secured indebtedness and contain
other customary covenants and restrictions.
These restrictions and covenants could limit our ability to obtain additional capital in the future to fund capital
expenditures or acquisitions, meet our debt payment obligations and capital commitments, fund any operating losses or future
development of our business affiliates, obtain lower borrowing costs that are available from secured lenders or engage in
advantageous transactions that monetize our assets or conduct other necessary or prudent corporate activities. Any failure to
comply with these covenants and restrictions could impact our ability to maintain compliance with our amended financial
covenants and require us to seek additional amendments to the Senior Secured Credit Facility. If we are not able to obtain such
necessary additional amendments, this would lead to an event of default and, if not cured timely, our lenders could require us to
repay our outstanding debt. In that situation, we may not be able to raise sufficient debt or equity capital, or divest assets, to
refinance or repay the lenders.
The lenders under the Senior Secured Credit Facility have received a pledge of substantially all of our existing and future
direct and indirect U.S. subsidiaries and certain foreign subsidiaries, with certain customary or agreed-upon exceptions for
certain subsidiaries. Additionally, these lenders generally have a lien on substantially all of our assets and the assets of our U.S.
subsidiaries and certain other foreign subsidiaries, with certain exceptions. The financial institutions that are party to the ARS
Facility have a lien on certain of our domestic accounts receivable. As a result of these pledges and liens, if we fail to meet our
payment or other obligations under the Senior Secured Credit Facility, the lenders under that facility will be entitled to foreclose
on substantially all of our assets and, at their option, liquidate these assets, and if we fail to meet our repayment or other
obligations under the ARS Facility, the secured parties under that facility will be entitled to take control of our accounts
receivable pledged to them and all collections on those receivables, and direct our obligors to make payment on such
receivables directly to the secured parties, which in each case would adversely impact the operations of our business.
Inability to access sufficient capital at reasonable rates or commercially reasonable terms or maintain sufficient liquidity
in the amounts and at the times needed could adversely impact our business.
We rely on our cash flows generated from operations and the borrowing capacity under our credit facilities to meet the
cash requirements of our business. We have significant capital requirements and will need continued access to debt capital from
outside sources in order to efficiently fund the cash flow needs of our business and pursue strategic acquisitions.
Based on our current expectations and forecasts of future earnings and cash flows, we believe we have sufficient cash and
available borrowings to support our operations and key business strategies for at least the next 12 months and we currently
believe our cash flows and available borrowings, together with our access to the capital markets, are sufficient to support our
longer term liquidity needs as well. However, we cannot be certain that we will be able to replace our existing credit facilities or
refinance our existing or future debt at a reasonable cost when necessary. The ability to have continued access to reasonably
priced credit is dependent upon our current and future capital structure, financial performance, our credit ratings and general
economic conditions. If we are unable to access the capital markets at a reasonable economic cost, it could have an adverse
effect on our results of operations or financial condition.
We may be adversely impacted by the failure to successfully execute acquisitions and divestitures and integrate acquired
operations.
From time to time, and as permitted by the requirements of the agreements governing our indebtedness, we may engage in
or seek to engage in strategic transactions such as acquisitions or divestitures. The success of any acquisition or divestiture
depends on the Company’s ability to identify opportunities that help the Company meet its strategic objectives, consummate a
transaction on favorable contractual terms, and achieve expected returns and other financial or operational benefits.
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Acquisitions require us to integrate efficiently the acquired business or businesses, which involves a significant degree of
difficulty and risk, including: integrating the operations and business cultures of the businesses, diverting management attention
from the existing core business, managing a larger company than before consummation of the acquisitions, creating uniform
standards and controls, attracting and retaining the necessary personnel associated with the acquisitions, and the risk of faulty
assumptions regarding the prospects of the acquired business and any acquired trademarks.
Divestitures present unique financial and operational risks, including diverting management attention from the existing
core business, separating personnel and financial data and other systems, impairments, and adversely affecting existing business
relationships with suppliers and customers.
In addition, the process of completing any acquisitions or divestitures may be time-consuming and involve significant
costs and expenses, which may be significantly higher than what we anticipate and may not yield a benefit if the transactions
are not completed successfully, and executing these transactions may require significant time and attention from our senior
management and employees. In situations where acquisitions or divestitures are not successfully implemented or completed, or
the expected benefits of such acquisitions or divestitures are not otherwise realized, the Company’s business or financial results
could be negatively impacted.
Fluctuations in foreign currency exchange rates and interest rates could negatively impact our results of operations.
Approximately 26% of our total revenues in 2024 (approximately $908 million in 2024) is derived from markets outside
the United States. We sell a majority of our products in transactions denominated in U.S. dollars; however, we purchase many
of our raw materials, pay a portion of our wages and make other payments to participants in our supply chain in foreign
currencies. As a result, when the U.S. dollar weakens against any of these currencies, our cost of sales could increase
substantially. Outside the United States, we may pay for materials or finished products in U.S. dollars, and in some cases a
strengthening of the U.S. dollar could effectively increase our costs where we use foreign currency to purchase the U.S. dollars
we need to make such payments. Changes in foreign currency exchange rates could have an adverse impact on our financial
condition, results of operations and cash flows. We are also exposed to gains and losses resulting from the effect that
fluctuations in foreign currency exchange rates have on the reported results in our consolidated financial statements due to the
translation of operating results and financial position of our foreign subsidiaries.
Approximately 35% of our total debt outstanding as of December 28, 2024 bears interest at variable rates. As a result, we
are exposed to changes in market interest rates that could impact the cost of servicing our debt. Changes in interest rates could
have an adverse impact on our financial condition, results of operations and cash flows.
We use forward foreign exchange contracts and have used cross-currency swap contracts to hedge material exposure to
adverse changes in foreign currency exchange rates. In addition, we use interest rate contracts to hedge a portion of our variable
interest payments on our debt that could impact the cost of servicing our debt. However, no hedging strategy can completely
insulate us from foreign exchange and interest rate risk.
Our balance sheet includes a significant amount of intangible assets and goodwill. A decline in the estimated fair value
of an intangible asset or of a business unit could result in an asset impairment charge, which would be recorded as a
noncash expense in our Consolidated Statements of Operations.
Goodwill, trademarks and other identifiable intangible assets must be tested for impairment at least annually. The fair
value of the goodwill assigned to a business unit could decline if projected revenues or cash flows were to be lower in the future
due to effects of the global economy or other causes. If the carrying value of intangible assets or of goodwill were to exceed its
estimated fair value, the asset would be written down to its fair value, with the impairment loss recognized as a noncash charge
in the Consolidated Statements of Operations.
As of December 28, 2024, we had approximately $638 million of goodwill and $886 million of trademarks and other
identifiable intangible assets on our balance sheet, which together represent 40% of our total assets. No impairment was
identified in 2024. However, we noted a meaningful decline in the fair value cushion above the carrying value for one of the
indefinite-lived trademarks within the Australian business. The decline in this trademark was driven by continued
macroeconomic pressures impacting the consumer spending in Australia and resulted in a fair value that exceeded the carrying
value by approximately 10% at the time the analysis was performed. As a result, this trademark was considered to be at a higher
risk for future impairment if economic conditions worsen or reporting unit earnings and operating cash flows do not recover as
currently estimated by management. As of December 28, 2024, the carrying value of this trademark was approximately $218
million. Changes in the future outlook the brand could result in an impairment loss, which could have a material adverse effect
on our results of operations and financial condition.
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Market returns could have a negative impact on the return on plan assets for our pension, which may require significant
funding.
The plan assets of our pension plans, which had a gain of approximately 1.5% during 2024 and a gain of approximately
8% during 2023, are invested mainly in domestic and international equities, bonds, hedge funds and real estate. We are unable
to predict the variations in asset values or the severity or duration of any disruptions in the financial markets or adverse
economic conditions in the United States. The funded status of these plans, and the related cost reflected in our consolidated
financial statements, are affected by various factors that are subject to an inherent degree of uncertainty, particularly in the
current economic environment. Under the Pension Protection Act of 2006 (the “Pension Protection Act”), losses of asset values
may necessitate increased funding of the plans in the future to meet minimum federal government requirements. Under the
Pension Protection Act funding rules, our U.S. qualified pension plans are approximately 93% funded as of December 1, 2024.
Any downward pressure on the asset values of these plans would increase our pension expense, which may require us to fund
obligations earlier than we had originally planned and have a negative impact on cash flows from operations.
There can be no assurance that we will choose to declare or be able to declare cash dividend in the future.
The declaration and payment of any dividend in the future will be subject to the approval of our Board of Directors and
our dividend may thereafter be discontinued or reduced at any time. Our Board of Directors regularly evaluates our capital
allocation strategy and dividend policy, and any future determination to continue to pay dividends, and the amount of such
dividends, will be at the discretion of our Board of Directors. Our ability to pay cash dividends is also limited by restrictions or
limitations on our ability to obtain sufficient funds through dividends from subsidiaries, as well as by contractual restrictions,
including the requirements of the agreements governing our indebtedness. There can be no assurance that we will declare cash
dividends in the future in any particular amounts, or at all.
Legal, Tax, Compliance, Reputational and Other Risks
Our operations in international markets, and our earnings in those markets, may be affected by legal, regulatory,
political and economic risks.
During 2024, net sales from our International segment were $908 million, representing approximately 26% of total net
sales. In addition, a significant amount of our manufacturing and production operations are located, or our products are sourced
from, outside the United States. As a result, our business is subject to risks associated with international operations. These risks
include the burdens of complying with foreign laws and regulations, unexpected changes in tariffs, taxes or regulatory
requirements, and political unrest and corruption.
Regulatory changes could limit the countries in which we sell, produce or source our products or significantly increase the
cost of operating in or obtaining materials originating from certain countries. Restrictions imposed by such changes can have a
particular impact on our business when, after we have moved our operations to a particular location, new unfavorable
regulations are enacted in that area or favorable regulations currently in effect are changed.
Countries in which our products are manufactured or sold may from time to time impose additional new regulations, or
modify existing regulations, including:
•
changes in duties, taxes, tariffs and other charges on imports;
•
limitations on the quantity of goods which may be imported into the United States from a particular country;
•
requirements as to where products and/or inputs are manufactured or sourced;
•
creation of export licensing requirements, imposition of restrictions on export quantities or specification of
minimum export pricing and/or export prices or duties;
•
limitations on foreign owned businesses; or
•
government actions to cancel contracts, re-denominate the official currency, renounce or default on obligations,
renegotiate terms unilaterally or expropriate assets.
In addition, political and economic changes or volatility, geopolitical regional conflicts, including the Russia-Ukraine
conflict and Middle East conflicts, terrorist activity, piracy or other disruption of critical supply routes, political unrest, civil
strife, acts of war, public corruption and other economic or political uncertainties could interrupt and negatively affect our
business operations. All of these factors could result in increased costs or decreased revenues and could materially and
adversely affect our product sales, financial condition and results of operations.
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We are also subject to the United States Foreign Corrupt Practices Act, in addition to the anti-corruption laws of the
foreign countries in which we operate. Although we implement policies and procedures designed to promote compliance with
these laws, our employees, contractors and agents, as well as those companies to which we outsource certain of our business
operations, may take actions in violation of our policies. Any such violation could result in sanctions or other penalties and have
an adverse effect on our business, reputation and operating results.
The recent imposition of tariffs and/or increase in tariffs on various products by the United States and other countries, and
the threat of additional tariffs in the future, have introduced greater uncertainty with respect to trade policies and government
regulations affecting trade between the United States and other countries. Furthermore, it is possible that other forms of trade
restriction, including tariffs, quotas and customs restrictions, will be put into place in the United States or in countries from
which we source our materials or finished products. We cannot predict whether any of the countries in which our merchandise
currently is manufactured or may be manufactured in the future will be subject to additional trade restrictions imposed by the
United States or other foreign governments, including the likelihood, type, or effect of any such restrictions. Any of these
actions, if ultimately enacted, could adversely affect our results of operations or profitability. Further, any emerging nationalist
trends in specific countries could alter the trade environment and consumer purchasing behavior which, in turn, could have a
material effect on our financial condition and results of operations.
The success of our business is tied to the strength and reputation of our brands. If the reputation of one or more of our
brands erodes significantly, it could have a material impact on our financial results.
Many of our brands have worldwide recognition, and our financial success is directly dependent on the success of our
brands. The success of a brand can suffer if our marketing plans or product initiatives do not have the desired impact on a
brand’s image or its ability to attract consumers. Our results could also be negatively impacted if one of our brands suffers
substantial harm to its reputation due to a significant product recall, product-related litigation or the sale of counterfeit products.
For example, biotechnology-derived substances, such as bisphenol A ("BPA") is listed as a hazardous chemical under
California’s Safe Water and Toxic Environment Act and we have been named in one lawsuit concerning the presence of BPA in
certain of our products. To that end, any additional actual or threatened legal actions against us or other companies in our
industry regarding the alleged presence of BPA or other similar substances in our products, whether or not justified, could
contribute to a perceived safety risk about our products and adversely impact sales or otherwise disrupt our business. Brand
value could diminish significantly due to a number of factors, including changing consumer attitudes regarding social issues
and consumer perception that we have acted in an irresponsible manner. The growing use of social and digital media by
consumers increases the speed and extent that information and opinions can be shared. Negative or inaccurate postings or
comments on social media or networking websites about our company, its practices or one of its brands could generate adverse
publicity that could damage the reputation of our brands.
We also license some of our important trademarks to third parties. Although we make concerted efforts to protect our
brands through quality control mechanisms and contractual obligations imposed on our licensees, there is a risk that some
licensees may not be in full compliance with those mechanisms and obligations. If the reputation of one or more of our brands
is significantly eroded, it could adversely affect our sales, results of operations, cash flows and financial condition.
We have a complex multinational tax structure, and changes in effective tax rates or adverse outcomes resulting from
examination of our income tax returns could impact our capital deployment strategy and adversely affect our results.
We have a complex multinational tax structure with multiple types of intercompany transactions, and our allocation of
profits and losses among us and our subsidiaries through our intercompany transfer pricing agreements is subject to review by
the Internal Revenue Service and other tax authorities. Our future effective tax rates could be adversely affected by earnings
being lower than anticipated in countries where we have lower statutory rates and higher than anticipated in countries where we
have higher statutory rates, by changes in the valuation of our deferred tax assets and liabilities, or by changes in tax laws,
regulations, accounting principles or interpretations thereof. We are continuously evaluating our capital allocation strategies in
an effort to maximize shareholder value, which includes maintaining appropriate debt to earnings ratios, and as a result there
may be times where we need to reevaluate our plans to permanently reinvest certain unremitted foreign earnings which may
increase or decrease our income tax expense during periods of change. In addition, we are also subject to the continuous
examination of our income tax returns and related transfer pricing documentation by various tax authorities. We regularly
assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for
income taxes. There can be no assurance that the outcomes from these examinations will not have an adverse effect on our
operating results and financial condition. Additionally, changes in tax laws, regulations, future jurisdictional profitability of us
and our subsidiaries, and related regulatory interpretations in the countries in which we operate may impact the taxes we pay or
tax provision we record, as well as our capital deployment strategy, which could adversely affect our results of operations.
Our effective tax rate could be volatile and materially change as a result of the adoption of new tax legislation and other
factors including mix of earnings in countries with lower or higher effective tax rates.
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A change in tax laws is one of many factors that impact our effective tax rate. The U.S. Congress and other government
agencies in jurisdictions where we do business have had an extended focus on issues related to the taxation of multinational
corporations. As a result, the tax laws in the U.S. and other countries in which we do business could change, and any such
changes could adversely impact our effective tax rate, financial condition and results of operations.
The Organization for Economic Co-operation and Development (the “OECD”), an international association of 38
countries including the United States, has proposed changes to numerous long-standing tax principles, including a global
minimum tax initiative. On December 12, 2022, the European Union member states agreed to implement the OECD’s Pillar 2
global corporate minimum tax rate of 15% on companies with revenues of at least $790 million, which went into effect in 2024.
While there is uncertainty whether the U.S. will enact legislation to adopt Pillar 2, certain countries in which we operate have
adopted legislation, and other countries are in the process of introducing legislation to implement Pillar 2. The Company will
continue to monitor the developing laws.
Our reputation, ability to do business and results of operations could be impaired by improper conduct by any of our
employees, agents or business partners.
Our business is subject to federal, state, local and international laws, rules and regulations, such as state and local wage
and hour laws, the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, the False Claims Act, the U.S. Employee
Retirement Income Security Act, the Global Data Protection Regulation, securities laws, import and export laws (including
customs regulations), unclaimed property laws and many others. We cannot provide assurance our internal controls will always
protect us from the improper conduct of our employees, agents and business partners. Any violations of law or improper
conduct could damage our reputation and, depending on the circumstances, subject us to, among other things, civil and criminal
penalties, material fines, equitable remedies (including profit disgorgement and injunctions on future conduct), securities
litigation and a general loss of investor confidence, any one of which could have a material adverse impact on our business
prospects, financial condition, results of operations, cash flows, and the market value of our stock.
We may suffer negative publicity if we or our third-party manufacturers violate labor laws or engage in practices that are
viewed as unethical or illegal, which could cause a loss of business.
We cannot fully control the business and labor practices of our third-party manufacturers, the majority of whom are
located in Asia, Central America and the Caribbean Basin. If one of our own manufacturing operations or one of our third-party
manufacturers violates or is accused of violating local or international labor laws or other applicable regulations, or engages in
labor or other practices that would be viewed in any market in which our products are sold as unethical, we could suffer
negative publicity, which could tarnish our brands’ image or result in a loss of sales. In addition, if such negative publicity
affected one of our customers, it could result in a loss of business for us.
We design, manufacture, source and sell products under trademarks that are licensed from third parties. If any licensor
takes actions related to their trademarks that would cause their brands or our company reputational harm, our business may
be adversely affected.
We design, manufacture, source and sell a number of our products under trademarks that are licensed from third parties,
such as our Polo Ralph Lauren men’s underwear. Because we do not control the brands licensed to us, our licensors could make
changes to their brands or business models that could result in a significant downturn in a brand’s business, adversely affecting
our sales and results of operations. If any licensor engages in behavior with respect to the licensed marks that would cause us
reputational harm, or if any of the brands licensed to us violates the trademark rights of another or are deemed to be invalid or
unenforceable, we could experience a significant downturn in that brand’s business, adversely affecting our sales and results of
operations, and we may be required to expend significant amounts on public relations, advertising and, possibly, legal fees.
If we are unable to protect our intellectual property rights, our business may be adversely affected.
Our trademarks are important to our marketing efforts and have substantial value. We aggressively protect these
trademarks and other intellectual property rights from infringement and dilution through appropriate measures, including court
actions and administrative proceedings. We are susceptible to others imitating our products and infringing our intellectual
property rights. Infringement or counterfeiting of our products could diminish the value of our brands or otherwise adversely
affect our business. Actions we have taken to establish and protect our intellectual property rights may not be adequate to
prevent imitation of our products by others or to prevent others from seeking to invalidate our trademarks or block sales of our
products as a violation of the trademarks and intellectual property rights of others. In addition, unilateral actions in the United
States or other countries, such as changes to or the repeal of laws recognizing trademark or other intellectual property rights,
could have an impact on our ability to enforce those rights.
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The value of our intellectual property could diminish if others assert rights in, or ownership of, our trademarks and other
intellectual property rights. We may be unable to successfully resolve these types of conflicts to our satisfaction. In some cases,
there may be trademark owners who have prior rights to our trademarks because the laws of certain foreign countries may not
protect intellectual property rights to the same extent as do the laws of the United States. In other cases, there may be holders
who have prior rights to similar trademarks. We are from time to time involved in opposition and cancellation proceedings with
respect to some items of our intellectual property.
Our balance sheet includes a significant amount of deferred taxes. Changes in our effective tax rate or tax liability may
adversely affect our operating results.
Significant gross deferred tax assets exist on our books and have been reduced by a valuation allowance. Deferred tax
assets relate to temporary differences (differences between the assets and liabilities in the consolidated financial statements and
the assets and liabilities in the calculation of taxable income) including net operating losses. The recognition of deferred tax
assets is reduced by a valuation allowance if it is more likely than not that the tax benefits associated with the deferred tax
assets will not be realized. Changes in existing valuation allowances and changes in effective tax rates and the assumptions and
estimates we have made in jurisdictions with no valuation allowance, as well as our ability to generate sufficient future taxable
income in certain jurisdictions, could materially affect our tax obligations or effective tax rate, which could negatively affect
our financial condition and results of operations. See Note “Income Taxes” to our consolidated financial statements included in
this Annual Report on Form 10-K regarding deferred tax assets and associated valuation allowances recorded in 2024.
Anti-takeover provisions of our charter and bylaws, as well as Maryland law, may reduce the likelihood of any potential
change of control or unsolicited acquisition proposal that you might consider favorable.
Our charter permits our Board of Directors, without stockholder approval, to amend our charter from time to time to
increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that we have
the authority to issue. In addition, our Board of Directors may classify or reclassify any unissued shares of common stock or
preferred stock and may set the preferences, conversion or other rights or limitations, voting powers, restrictions and other
terms of the classified or reclassified shares. Our Board of Directors could establish a series of preferred stock that could have
the effect of delaying, deferring or preventing a transaction or a change in control that might involve a premium price for our
common stock or otherwise be in the best interest of our stockholders. Our charter also provides that a director may be removed
at any time, but only for cause, as defined in our charter, and then only by the affirmative vote of at least two thirds of the votes
entitled to be cast generally in the election of directors. We have also elected to be subject to certain provisions of Maryland law
that provide that vacancies on our Board of Directors may only be filled by the affirmative vote of a majority of our remaining
directors in office, even if they do not constitute a quorum. Under Maryland law, our Board of Directors also is permitted,
without stockholder approval, to implement a classified board structure at any time.
Our bylaws provide that director nominations and the proposal of business to be considered at a stockholders meeting may
be made only in the notice of the meeting, by or at the direction of our Board of Directors or by a stockholder who was a
stockholder of record both at the time of giving notice by the stockholder in accordance with the advance notice procedures of
our bylaws and at the time of the annual meeting. Also, under Maryland law, business combinations between us and an
interested stockholder or an affiliate of an interested stockholder are prohibited for five years after the most recent date on
which the interested stockholder becomes an interested stockholder. An interested stockholder includes any person who
beneficially owns 10% or more of the then-outstanding voting power of our stock or any affiliate or associate of ours who, at
any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the then-
outstanding voting power of our stock. A person is not an interested stockholder under the statute if our Board of Directors
approved in advance the transaction by which he otherwise would have become an interested stockholder. However, in
approving a transaction, our Board of Directors may provide that its approval is subject to compliance, at or after the time of
approval, with any terms and conditions determined by our Board. After the five-year prohibition, any business combination
between us and an interested stockholder generally must be recommended by our Board of Directors and approved by two
supermajority votes or our common stockholders must receive a minimum price, as defined under Maryland law, for their
shares. The statute permits various other exemptions from its provisions.
These and other provisions of Maryland law or our charter and bylaws could have the effect of delaying, deferring or
preventing a transaction or a change in control that might involve a premium price for our common stock or otherwise be
considered favorably by our stockholders.
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Our bylaws designate the Circuit Court for Baltimore City, Maryland as the sole and exclusive forum for certain actions,
including derivative actions, which could limit a stockholder’s ability to bring a claim in a judicial forum that it finds
favorable for disputes with the Company and its directors, officers, other employees, or the Company's stockholders and may
discourage lawsuits with respect to such claims.
Unless we consent in writing to the selection of an alternative forum, our bylaws provide that the sole and exclusive forum
for (a) any derivative action or proceeding brought on behalf of the Company, (b) any action asserting a claim of breach of any
duty owed by any current or former director, officer, employee, stockholder or agent of the Company to the Company or to the
stockholders of the Company, (c) any action asserting a claim against the Company or any of its current or former directors,
officers, employees, stockholders or agents arising pursuant to any provision of the Maryland General Corporate Law or the
Company’s Charter or Bylaws, or (d) any action asserting a claim against the Company or any of its current or former directors,
officers, employees, stockholders or agents that is governed by the internal affairs doctrine, shall, to the fullest extent permitted
by law, be the Circuit Court for Baltimore City, Maryland (or, if that Court does not have jurisdiction, the United States District
court for the District of Maryland, Northern Division). However, Section 27 of the Exchange Act creates exclusive federal
jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations
thereunder, and as such, the exclusive jurisdiction clauses set forth above would not apply to such suits. Furthermore, Section
22 of the Securities Act provides for concurrent jurisdiction for federal and state courts over all suits brought to enforce any
duty or liability created by the Securities Act or the rules and regulations thereunder, and as such, the exclusive jurisdiction
clauses set forth above would not apply to such suits.
Although we believe the exclusive forum provision benefits us by providing increased consistency in the application of
Maryland law for the specified types of actions and proceedings, this provision may limit a stockholder’s ability to bring a
claim in a judicial forum that it finds favorable for disputes with the Company and its directors, officers, or other employees
and may discourage lawsuits with respect to such claims.
Item 1B.
Unresolved Staff Comments
Not applicable.
Item 1C. Cybersecurity
Risk Management and Strategy
As a part of the Company's overall risk management and compliance programs, we have developed an enterprise
cybersecurity program designed to detect, identify, classify and mitigate cybersecurity and other data security threats. Our
enterprise cybersecurity program classifies potential threats by risk levels and we typically prioritize our threat mitigation
efforts based on those risk classifications, while focusing on maintaining the resiliency of our systems. In recent years, we have
increased our investments in our ability to detect, identify, classify and mitigate cybersecurity and other data privacy risks
within our environment. In the event we identify a potential cybersecurity, privacy or other data security issue, we have defined
procedures for responding to such issues, including procedures that address when and how to engage with Company
management, our Board of Directors, other stakeholders and law enforcement when responding to such issues. Additionally,
our cybersecurity program is regularly assessed by independent third parties, and we incorporate regular information security
training as part of our employee education and development program. We maintain cybersecurity insurance as part of our
comprehensive insurance portfolio.
Because we are aware of the risks associated with third-party service providers, we also have implemented robust
processes to oversee and manage these risks. We conduct security assessments of third-party providers before engagement and
maintain ongoing monitoring to help ensure compliance with our cybersecurity standards. In addition, we perform periodic risk
assessments of key vendors. This approach is designed to mitigate risks related to potential data breaches or other security
incidents originating from or at third-party service providers.
We also understand the importance of collecting, storing, using, sharing and disposing of personal information in a
manner that complies with all applicable laws. Our policies provide explanations of the types of information we collect, how we
use and share information, and generally describe the measures we take to protect the security of that information. Our policies
also describe how customers may initiate inquiries and raise concerns regarding the collection, storage, sharing and use of their
personal data.
Some of the other steps we have taken to detect, identify, classify and attempt to mitigate data security and privacy risks
include:
•
Adopting and periodically reviewing and updating information security and privacy policies and procedures;
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•
Conducting targeted assessments and penetration tests throughout the year, using both internal and external
resources;
•
Conducting security maturity posture assessments, including engaging an industry-leading, nationally-known third
party to independently evaluate our information security maturity on a regular basis;
•
Utilizing industry-standard technologies, processes, and capabilities designed to protect our systems and data and
detect potential suspicious activity;
•
Adopting a vendor risk management program, which includes cybersecurity and data privacy audits, classifying
vendor, service provider or business partner risk based on several factors and evaluating and monitoring related risk
mitigation efforts;
•
Providing security and privacy training and awareness to our employees;
•
Conducting periodic phishing simulations to test our employees' responses to suspicious emails and to inform
targeted cyber awareness training; and
•
Maintaining cyber liability insurance.
We have experienced targeted and non-targeted cybersecurity attacks and incidents in the past, and we could in the future
experience similar attacks. For additional information regarding the ransomware attack we announced on May 31, 2022, see the
section captioned “Overview - Ransomware Attack” under Part II, Item 7 “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” below. Other than this ransomware attack, as of the date of this report and for the years
presented, we have not identified any risks from cybersecurity threats, including as a result of any previous cybersecurity
incidents, that have materially affected us, our business strategy, results of operations or financial condition. For additional
information regarding the risks from cybersecurity threats we face, see the section captioned “Operational Risks - Any
inadequacy, interruption, integration failure, breach or cybersecurity incident with respect to our information technology could
harm our ability to effectively operate our business and have a material adverse effect on our business, results of operations,
financial condition and cash flows” under Part I, Item 1A “Risk Factors” above.
Governance
Our Board of Directors recognizes the important role of information security and mitigating cybersecurity and other data
security threats, as part of our efforts to protect and maintain the confidentiality and security of customer, employee and vendor
information, as well as non-public information about our Company. Although the Board as a whole is ultimately responsible for
the oversight of our risk management function, the Board uses its committees to assist in its risk oversight function. The Audit
Committee of our Board of Directors has primary responsibility for oversight of risk assessment and risk management,
including risks related to cybersecurity and other technology issues.
The Board regularly reviews our cybersecurity and other technology risks, controls and procedures. The Board receives
reports from our Chief Executive Officer and Chief Information Security Officer at least twice annually regarding our
cybersecurity framework, as well as our plans to mitigate cybersecurity risks and to respond to any data breaches. Our
cybersecurity infrastructure is overseen by our Chief Information Security Officer, who reports to our Chief Strategy,
Transformation, Analytics and Technology Officer. Our Chief Information Security Officer has served in various roles in
information technology and information security for over 20 years, including most recently leading the information security
function of McCormick & Company. He holds a Ph.D. in information assurance & security, along with industry certifications
that include ISACA Certified Data Privacy Solutions Engineer and Certified Information Security Manager and EC-Council’s
Certified Chief Information Security Officer certification.
Furthermore, management of Hanesbrands prepares, and the Audit Committee reviews and discusses, an annual
assessment of our risks on an enterprise-wide basis. We conduct a rigorous enterprise risk management program that is updated
annually and is designed to bring to the Audit Committee’s attention our most material risks for evaluation, including
cybersecurity risks.
Item 2.
Properties
We own and lease properties supporting our administrative, manufacturing, distribution and direct retail activities. As of
December 28, 2024, we owned and leased properties in approximately 15 countries, including 20 manufacturing facilities and
26 distribution centers, as well as office facilities. The leases for these properties expire between 2025 and 2057, with the
exception of some seasonal warehouses that we lease on a month-by-month basis. As of December 28, 2024, we operated 423
retail and outlet stores internationally, most of which are leased. We believe that our facilities, as well as equipment, are in good
condition and meet our current business needs.
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We lease our approximately 230,000 square-foot headquarters located in Winston-Salem, North Carolina, which houses
our various sales, marketing and corporate business functions. Research and development as well as certain product-design
functions also are located in Winston-Salem, while other design functions are located in a mix of leased and owned facilities in
several international cities.
Our products are manufactured through a combination of facilities we own and operate and facilities owned and operated
by third-party contractors who perform some of the steps in the manufacturing process for us, such as cutting and/or sewing.
We source the remainder of our finished goods from third-party manufacturers who supply us with finished products based on
our designs. Our largest manufacturing facilities include an approximately 1.1 million square-foot owned facility located in San
Juan Opico, El Salvador and an approximately 600,000 square-foot owned facility located in Bonao, Dominican Republic. We
distribute our products from 26 distribution centers. These distribution centers include 9 facilities located in the United States
and 17 facilities located outside the United States in regions where we manufacture and sell our products. Our largest
distribution facilities include an approximately 1.3 million square-foot leased facility located in Perris, California, an
approximately 900,000 square-foot leased facility located in Rural Hall, North Carolina and an approximately 700,000 square-
foot owned facility located in Martinsville, Virginia.
The following table summarizes the properties primarily used by our segments as of December 28, 2024:
Owned Square
Feet
Leased Square
Feet
Total
Properties by Segment(1)
U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,539,084
4,546,605
6,085,689
International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,674,205
2,955,544
5,629,749
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
24,603
24,603
Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,213,289
7,526,752
11,740,041
(1)
Excludes vacant land, facilities under construction, facilities not yet in operation or leases not yet commenced, facilities no longer in
operation intended for disposal, apartments/residences, sourcing offices not associated with a particular segment, and office buildings
housing corporate functions.
Item 3.
Legal Proceedings
We are named in a putative class action in connection with our previously disclosed ransomware incident, entitled
Toussaint et al. v. HanesBrands,[sic] Inc. This lawsuit was filed on April 27, 2023, and is pending in the United States District
Court for the Middle District of North Carolina, and follows the consolidation of two previously pending lawsuits, entitled
Roman v. Hanes Brands,[sic] Inc., filed October 7, 2022, and Toussaint v. HanesBrands,[sic] Inc., filed October 14, 2022. The
lawsuit alleges, among other things, negligence, negligence per se, breach of implied contract, invasion of privacy, unjust
enrichment, breach of implied covenant of good faith and fair dealing and unfair business practices under the California
Business and Professions Code. The pending lawsuit seeks, among other things, monetary and injunctive relief. On April 2,
2024, the plaintiffs filed a motion for preliminary approval of a class action settlement. If approved by the Court, the settlement
generally provides for class members to claim reimbursement for documented out-of-pocket losses related to the ransomware
incident (limited to an aggregate cap of $100,000), as well as a choice of one of the following three forms of additional relief
(with no aggregate cap): (1) two years of credit and identity monitoring services; (2) a one-time use credit for purchase of
products on the www.hanes.com website; or (3) a cash payment. We have also agreed to undertake certain injunctive relief, and
to pay an agreed upon amount of attorneys’ fees, costs, and service awards to the plaintiffs, if approved by the Court. On
November 5, 2024, the Court entered an order granting preliminary approval of the settlement. The Court has scheduled the
final approval hearing for March 10, 2025. We do not expect the settlement, if finally approved, to have a material adverse
effect on our consolidated financial position or results of operations. We currently anticipate the cost of the proposed settlement
to be between $1 million and $2 million.
We are also subject to various claims and legal actions that occur from time to time in the ordinary course of our business.
However, we are not party to any pending legal proceedings, including the pending lawsuits in connection with the previously
disclosed ransomware incident described above, that we believe could have a material adverse effect on our business, results of
operations, financial condition or cash flows.
Item 4.
Mine Safety Disclosures
Not applicable.
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26
PART II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
Market for our Common Stock
Our common stock currently is traded on the New York Stock Exchange, or the “NYSE,” under the symbol “HBI.” We
have not made any unregistered sales of our equity securities.
Holders of Record
On February 7, 2025, there were 11,895 holders of record of our common stock.
Issuer Repurchases of Equity Securities
We did not repurchase any of our common stock during the quarter or the year ended December 28, 2024.
Performance Graph
The following graph compares the cumulative total stockholder return on our common stock with the comparable
cumulative return of the S&P SmallCap 600 Index, and the S&P 1500 Apparel, Accessories & Luxury Goods Index. The graph
assumes that $100 was invested in our common stock and each index on December 28, 2019. The stock price performance on
the following graph is not necessarily indicative of future stock price performance.
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Equity Compensation Plan Information
The following table provides information about our equity compensation plans as of December 28, 2024:
Number of
Securities to be
Issued Upon
Exercise of
Outstanding
Options,
Warrants and
Rights
Weighted
Average Exercise
Price of
Outstanding
Options,
Warrants and
Rights (2)
Number of
Securities
Remaining
Available for
Future Issuance
under Equity
Compensation
Plans (1)
(amounts in thousands, except per share data)
Plan Category
Equity compensation plans approved by security holders . . . . . . . . . . . . .
7,665 $
0.56
17,245
Equity compensation plans not approved by security holders . . . . . . . . . .
—
—
—
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,665 $
0.56
17,245
(1)
The amount appearing under “Number of securities remaining available for future issuance under equity compensation plans” includes
11,785 shares available under the Hanesbrands Inc. Omnibus Incentive Plan (As Amended and Restated) and 5,460 shares available
under the Hanesbrands Inc. Employee Stock Purchase Plan (As Amended and Restated as of 2014).
(2)
As of December 28, 2024, we had 250 outstanding options, warrants and rights that could be exercised for consideration. The weighted
average exercise price of outstanding options, warrants and rights excluding those that can be exercised for no consideration is $17.18.
Item 6.
[Reserved]
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Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
This management’s discussion and analysis of financial condition and results of operations, or MD&A, contains forward-
looking statements that involve risks and uncertainties. Please see “Forward-Looking Statements” and “Risk Factors” in this
Annual Report on Form 10-K for a discussion of the uncertainties, risks and assumptions associated with these statements. This
discussion should be read in conjunction with our historical financial statements and related notes thereto and the other
disclosures contained elsewhere in this Annual Report on Form 10-K. The results of operations for the periods reflected herein
are not necessarily indicative of results that may be expected for future periods, and our actual results may differ materially
from those expressed in or implied by the forward-looking statements as a result of various factors, including but not limited to
those listed under Part I, Item 1A. “Risk Factors” in this Annual Report on Form 10-K and included elsewhere in this Annual
Report on Form 10-K. In particular, among others, statements with respect to trends associated with our business, our key
business strategies, our expectations regarding liquidity and our ability to maintain compliance with the covenants in our Senior
Secured Credit Facility and our future financial performance included in this MD&A are forward-looking statements.
This MD&A is a supplement to our consolidated financial statements and notes thereto included elsewhere in this Annual
Report on Form 10-K and is provided to enhance your understanding of our results of operations and financial condition. It
generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023. Since we have restated all
periods presented as a result of the discontinued operations discussed in Note “Basis of Presentation” to our consolidated
financial statements, we are providing comparisons between 2023 and 2022 in the following sections entitled “Consolidated
Results of Operations” and “Operating Results by Business Segment”. Our MD&A is organized as follows:
•
Overview. This section provides a general description of our Company and operating segments, business and
industry trends, our key business strategies and background information on other matters discussed in this MD&A.
•
2024 Key Financial Results. This section discusses some of the key financial results of our performance and
activities during 2024.
•
Consolidated Results of Operations and Operating Results by Business Segment. These sections provide our analysis
and outlook for the significant line items in our Consolidated Statements of Operations, as well as other information
that we deem meaningful to an understanding of our results of operations on both a consolidated basis and a
business segment basis.
•
Liquidity and Capital Resources. This section provides an analysis of trends and uncertainties affecting liquidity,
cash requirements for our business, sources and uses of our cash and our financing arrangements.
•
Critical Accounting Policies and Estimates. This section discusses the accounting policies that we consider
important to the evaluation and reporting of our financial condition and results of operations, and whose application
requires significant judgments or a complex estimation process.
•
Recently Issued Accounting Pronouncements. This section provides a summary of the most recent authoritative
accounting pronouncements that were adopted during 2024 and that we will be required to adopt in a future period.
Overview
Our Company
Hanesbrands Inc. (collectively with its subsidiaries, “we,” “us,” “our,” or the “Company”) is a socially responsible global
leader in everyday iconic apparel, operating across the Americas, Australia and Asia. We own a portfolio of some of the
world’s most recognized apparel brands in the core and essentials category including Hanes, Bonds, Bali, Maidenform, Playtex,
Bras N Things, Berlei, Wonderbra, Zorba, JMS/Just My Size and Comfortwash. It’s through these iconic brands that we deliver
high-quality, affordable comfort that is responsibly produced with ethically sourced materials. Our portfolio of leading brands is
designed to address the needs and wants of various consumer segments across a broad range of basic apparel products and our
brands have strong consumer positioning that helps distinguish them from competitors.
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29
Our Segments
In 2024, we realigned our segment reporting as a result of the sale of the global Champion business, as discussed in Note
“Assets and Liabilities of Businesses Held for Sale” to our consolidated financial statements included in this Annual Report on
Form 10-K. While the global Champion business was reflected within all reportable segments prior to its reclassification to
discontinued operations, the U.S. Champion business made up the majority of our former Activewear segment. Accordingly,
the former Activewear segment has been eliminated and the segment information herein excludes the results of the global
Champion business for all periods presented. As a result of the strategic shift and resulting reorganization, the chief executive
officer, who is our chief operating decision maker, began reviewing all U.S. innerwear and U.S. activewear operations together
as one U.S. operating segment. As a result of these changes, our operations are now managed and reported in two operating
segments, each of which is a reportable segment for financial reporting purposes: U.S. and International. In December 2024, the
Champion Japan business, which was previously reported within the International segment, was classified as held for sale and
reflected as discontinued operations for all periods presented. Accordingly, the Champion Japan business has been excluded
from the International segment information herein. These changes have been applied to all periods presented. These segments
are organized and managed principally by geographic location. Each segment has its own management team that is responsible
for the operations of the segment’s businesses, but the segments share a common supply chain and media and marketing
platforms.
Other consists of our U.S. Sheer Hosiery business prior to its sale on September 29, 2023, certain sales from our supply
chain to the European Innerwear business which was sold on March 5, 2022 and short term support and transition service
agreements for disposed businesses. Our U.S.-based outlet store business was also reflected in Other prior to its reclassification
to discontinued operations in the second quarter of 2024 as discussed in Note “Assets and Liabilities of Businesses Held for
Sale” to our consolidated financial statements included in this Annual Report on Form 10-K. As a result of this reclassification,
the results of the U.S.-based outlet store business are excluded from the segment information herein for all periods presented.
The types of products and services from which each reportable segment derives its revenues are as follows:
•
U.S. primarily includes innerwear sales in the United States of basic branded apparel products that are replenishment
in nature under the product categories of men’s underwear, women’s panties, children’s underwear and socks, and
intimate apparel, which includes bras and shapewear. This segment also includes other apparel sales in the United
States of branded products that are primarily seasonal in nature to both retailers and wholesalers.
•
International primarily includes sales of the Company’s innerwear and other apparel products outside the United
States, primarily in Australia, the Americas and Asia.
Impact of the Macroeconomic Pressures on Our Business
The global macroeconomic pressures continue to impact our business operations and financial results, as described in
more detail under “Consolidated Results of Operations - Year Ended December 28, 2024 (“2024”) Compared with Year Ended
December 30, 2023 (“2023”)” and Consolidated Results of Operations — Year Ended December 30, 2023 (“2023”) Compared
with Year Ended December 31, 2022 (“2022”)” below, primarily through consumer-demand headwinds and increased interest
rates which has pressured sales and resulted in higher operating and financing costs causing pressure on net operating results.
Despite the challenging global operating environment, we have been able to balance near term management of the business with
implementing changes to execute our strategy to transform the Company. We have simplified the business by improving
inventory management capabilities through continued SKU discipline and lifecycle management. Gross and operating margin
pressures began to ease in the second half of 2023 and continued in 2024 as lower cost inventory was sold and we benefited
from various cost savings initiatives. The future impact of the global macroeconomic pressures, including consumer demand
headwinds and higher interest rates, remain highly uncertain, and our business and results of operations, including our net
revenues, earnings and cash flows, could continue to be adversely impacted. The Federal Reserve cut the federal-funds rate in
September 2024, November 2024 and December 2024. While these cuts could potentially have a favorable impact to consumer
spending, we remain highly uncertain as the near term impact on interest rates is not yet known. See the related risk factors
under Part I, Item 1A. “Risk Factors” in this Annual Report on Form 10-K.
Business and Industry Trends
Inflation and Changing Prices
Cotton is the primary raw material used in manufacturing many of our products. While we do not own yarn operations, we
are still exposed to fluctuations in the cost of cotton. Increases in the cost of cotton can result in higher costs in the price we pay
for yarn from our large-scale yarn suppliers and may result in the need to implement future price increases in order to maintain
our margins. Cotton price volatility has an impact on current inventory margins as a time lag exists between current market
prices and our actual costs incurred. When cotton prices fluctuate, we may receive downward price pressure as a result of
consumer demand, competition or other factors.
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Our costs for cotton yarn, cotton-based textiles and cotton-based products sourced from third-party suppliers vary based
upon the fluctuating cost of cotton, which is affected by, among other factors, weather, the impacts of climate change, consumer
demand, speculation on the commodities market, the relative valuations and fluctuations of the currencies of producer versus
consumer countries and other factors that are generally unpredictable and beyond our control. We are able to lock in the cost of
cotton reflected in the price we pay for yarn from our primary yarn suppliers in an attempt to protect our business from the
volatility of the market price of cotton. Under our agreements with these suppliers, we have the ability to periodically fix the
cotton cost component of our yarn purchases. When we elect to fix the cotton cost component under these agreements, interim
fluctuations in the price of cotton do not impact the price we pay for the specified volume of yarn. The yarn suppliers bear the
risk of cotton fluctuations for the yarn volume specified and it is their responsibility to procure the cotton at the agreed upon
pricing through arrangements they make with their cotton suppliers. However, our business can be affected by dramatic
movements in cotton prices. The cost of cotton used in our products, which includes the cost of cotton used in goods
manufactured by us, as well as the cotton content in yarn, textiles and turnkey products we purchase from third-party suppliers,
as a percentage of our cost of sales was in the low double digits in 2024. Costs incurred today for materials and labor, including
cotton, typically do not impact our results until the finished goods inventory is sold approximately five to nine months later.
Inflation can have a long-term impact on us because increasing costs of materials and labor may impact our ability to
maintain satisfactory margins. For example, the cost of the materials that are used in our manufacturing process, such as oil-
related commodity prices and other raw materials, including cotton, dyes and chemicals, and other costs, such as fuel, energy
and utility costs, can fluctuate as a result of inflation and other factors. Disruptions to the global supply chain due to factory
closures, port congestion, transportation delays as well as labor and container shortages may negatively impact product
availability, revenue growth and gross margins. We would work to mitigate the impact of the global supply chain disruptions
through a combination of cost savings and operating efficiencies, as well as pricing actions, which could have an adverse
impact on demand. Costs incurred for materials and labor are capitalized into inventory and impact our results as the finished
goods inventory is sold. In addition, a significant portion of our products are manufactured in countries other than the United
States and declines in the value of the U.S. dollar may result in higher manufacturing costs. Increases in inflation may not be
matched by growth in consumer income, which also could have a negative impact on spending.
Other Business and Industry Trends
The basic apparel market is highly competitive and rapidly evolving. Competition generally is based upon brand, comfort,
fit, style, innovation and price. Our competition consists of other large domestic and foreign corporations and manufacturers, as
well as smaller companies, department stores, specialty stores and other retailers that market and sell basic apparel products
under private labels that compete directly with our brands. The majority of our core products are consistent each year and in
line with consumer trends, including variations in color, fabric, style, design and innovation or design details.
In 2024, our top 10 customers accounted for approximately 64% of our total net sales. Our largest customers in 2024 were
Walmart, Amazon, and Target, which accounted for 24%, 13%, and 11% of our total net sales, respectively. The increasing
bargaining power of retailers can create pricing pressures as our customers grow larger and seek greater concessions in their
purchase of our products, while also demanding exclusivity with respect to some of our products. To counteract these effects, it
has become increasingly important to leverage our national brands through investment in our largest and strongest brands as our
customers strive to maximize their performance especially in today’s challenging retail economic environment. Brands are
important in our core categories to drive traffic and project the quality and value our customers demand.
Foreign Exchange Rates
Changes in exchange rates between the U.S. dollar and other currencies can impact our financial results in two ways; a
translation impact and a transaction impact. The translation impact refers to the impact that changes in exchange rates can have
on our published financial results. Similar to many multi-national corporations that publish financial results in U.S. dollars, our
revenue and profit earned in local foreign currencies is translated back into U.S. dollars using an average exchange rate over the
representative period. A period of strengthening in the U.S. dollar has a negative impact to our published financial results
(because it would take more units of a local currency to convert into a dollar). The opposite is true during a period of weakening
in the U.S. dollar. Our biggest foreign currency exposures are the Australian dollar, the Mexican peso, the Brazilian real, the
Canadian dollar and the Argentinian peso.
The transaction impact on financial results is common for apparel companies that source goods because these goods are
purchased in U.S. dollars. The transaction impact from a strengthening U.S. dollar would have a negative impact to our
financial results (because the U.S. dollar-based costs would convert into a higher amount of local currency units, which means a
higher local-currency cost of goods, and in turn, a lower local-currency gross profit). The transaction impact from exchange
rates is typically recovered over time with price increases. However, during periods of rapid change in exchange rates, pricing
is unable to change quickly enough; therefore, we use forward foreign exchange contracts to hedge against our sourcing costs to
minimize our exposure to fluctuating exchange rates.
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Our Key Business Strategies
Our business strategy integrates our brand superiority, industry-leading innovation and low-cost global supply chain to
provide higher value products while lowering production costs. We operate primarily in the global innerwear apparel category,
along with smaller operations within other apparel categories. Our strategy is based on managing and growing our iconic brands
through the three key principles of simplifying for growth, focus for impact, and continuously improving to win. By simplifying
the portfolio, we continue to elevate these brands by delivering quality and value to our consumers through innovative brand
and product experiences. We remain focused on the core product offerings while also expanding through innovation and new
business opportunities for greater marketplace impact.
We are taking decisive actions to streamline operations and deliver measurable results and have pushed to reduce
inventory and product SKUs through our disciplined inventory management. We have segmented and consolidated our world-
class supply chain for greater efficiency and flexibility and our go-to-market strategy has been reimagined into a winning,
repeatable cadence, supported by a robust, consumer-led innovation process that keeps us at the forefront of industry trends. We
are highly confident our iconic brand portfolio, world-class supply chain and product innovation will ensure we will
consistently grow sales, expand our margins and generate cash flow.
Over the last three years, we have experienced several unanticipated challenges, including significant cost inflation,
market disruption and consumer-demand headwinds. Despite the challenging global operating environment, we have been able
to balance the near-term management of the business with making the long-term investments necessary to execute our strategy
and transform us. During this time, we have made meaningful progress on several of our strategic initiatives. We have pivoted
our U.S. innerwear business back to gaining market share, which has been driven by the launch of new product innovation,
increased marketing investments in our brands and improved on-shelf product availability. We have simplified our portfolio by
selling our European Innerwear and U.S. Sheer Hosiery businesses.
In September 2023, we announced that our Board of Directors and executive leadership team, with the assistance of
financial and legal advisors, were undertaking an evaluation of strategic alternatives for the global Champion business which
included a broad range of alternatives to maximize shareholder value and also considered an evaluation of the strategic
alternatives for our U.S.-based outlet store business impacted by the global Champion business. In June 2024, we reached the
decision to exit the U.S.-based outlet store business and the global Champion business, excluding the Champion Japan business,
(“global Champion business”). In December 2024, we finalized plans to exit the Champion Japan business and expect to
complete the sale of the business within the next 12 months. We determined that the exit of the global Champion business,
U.S.-based outlet store business and the Champion Japan business represent multiple components of a single strategic plan that
met held-for-sale and discontinued operations accounting criteria in 2024. Accordingly, we began to separately report the
results of these businesses as discontinued operations in our Consolidated Statements of Operations and to present the related
assets and liabilities as held for sale in our Consolidated Balance sheets. These changes have been applied to all periods
presented.
In the second quarter of 2024, we announced that we had reached an agreement to sell the intellectual property and certain
operating assets of the global Champion business to Authentic Brands Group LLC (“Authentic”). Pursuant to the agreement, as
amended, we completed the sale of the intellectual property and certain operating assets of the global Champion business to
Authentic in the fourth quarter of 2024 on September 30, 2024 (the “Initial Closing”) in exchange for gross cash proceeds of
$857 million and a receivable of $12 million. In addition, we have the potential to receive additional contingent cash
consideration of up to $300 million pursuant to the agreement. We used net sale proceeds from the Initial Closing of $783
million, which excludes customary transaction costs and other deductions permitted under our senior secured credit facility (the
“Senior Secured Credit Facility”), to pay down a portion of our outstanding term debt in October 2024. We continued to operate
the Champion business in certain sectors and geographies through a transition period ending on January 31, 2025 (the
“Deferred Business”), on which date we completed the sale of the Deferred Business (the “Deferred Closing”) in exchange for
gross cash proceeds of $31 million. We continued to provide certain manufacturing and supply services as well as transition
services to Authentic and the applicable service recipients pursuant to the terms of the agreements entered into among the
Company, Authentic and the applicable service recipients. We expect to continue these services over a period of approximately
12 months. See Note, “Assets and Liabilities of Businesses Held for Sale” to our consolidated financial statements included in
this Annual Report on Form 10-K.
In the second quarter of 2024, we began actively marketing our U.S.-based outlet store business to prospective buyers. In
July 2024, we entered into a purchase agreement with Restore Capital (HCR Stores), LLC (“Restore”), an affiliate of Hilco
Merchant Resources, LLC. Under the purchase agreement, we paid Restore $12 million at closing and an additional $3 million
in January 2025 and to provide certain inventory to Restore, in exchange for Restore agreeing to assume the operations and
certain liabilities of our U.S.-based outlet store business as discussed in Note, “Assets and Liabilities of Businesses Held for
Sale” to our consolidated financial statements included in this Annual Report on Form 10-K.
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On March 5, 2022, we completed the sale of our European Innerwear business to an affiliate of Regent, L.P. and on
September 29, 2023, we completed the sale of our U.S. Sheer Hosiery business to AllStar Hosiery LLC, an affiliate of AllStar
Marketing Group, LLC. When we reached the decision to exit our European Innerwear business in 2021, we determined that
this business met held-for-sale and discontinued operations accounting criteria and accordingly, we began to separately report
the results of our European Innerwear business as discontinued operations in our Consolidated Statements of Operations for the
year ended December 31, 2022. The operations of our U.S. Sheer Hosiery business are reported in “Other” for the years ended
December 30, 2023 and December 31, 2022 in Note “Business Segment Information” to our consolidated financial statements
included in this Annual Report on Form 10-K.
Unless otherwise noted, all discussion within this Annual Report on Form 10-K, including amounts and percentages for
all periods, reflect the results of our continuing operations. See Note “Assets and Liabilities of Businesses Held for Sale” to our
consolidated financial statements included in this Annual Report on Form 10-K for additional information.
We seek to generate strong cash flow through effectively optimizing our capital structure and managing working capital
levels. In January 2023, we shifted our capital allocation strategy to focus the use of all our free cash flow (cash from operations
less capital expenditures) on reducing debt and bringing our leverage back to a range that is no greater than two to three times
on a net debt-to-adjusted EBITDA basis. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and
amortization excluding restructuring and other action-related costs and certain other losses, charges and expenses. Net debt is
defined as the total of current debt, long-term debt, and borrowings under the accounts receivable securitization facility
(excluding long-term debt issuance costs) less other debt and cash adjustments and cash and cash equivalents.
Ransomware Attack
As previously disclosed, on May 24, 2022, we identified that we had become subject to a ransomware attack that affected
certain of our information technology systems. The incident was subsequently investigated and contained and there are no
ongoing operational impacts on our ability to provide our products and services. We maintain insurance, including coverage for
cyber-attacks, subject to certain deductibles and policy limitations, in an amount that we believe appropriate.
In 2023, we recognized a benefit related to business interruption insurance proceeds of approximately $24 million, of
which approximately $23 million is reflected in the “Cost of sales” line and approximately $1 million is reflected in the
“Selling, general and administrative expenses” line of the Consolidated Statements of Operations. We received total business
interruption insurance proceeds of $26 million in 2023, a portion of which was recognized as an expected insurance recovery in
2022, related to the recovery of lost profit from business interruptions. In 2022, we incurred costs of approximately $15 million,
net of expected insurance recoveries, related to the ransomware attack. The costs, net of expected insurance recoveries, incurred
during 2022 included approximately $14 million primarily related to supply chain disruptions, which are reflected in the “Cost
of sales” line of the Consolidated Statements of Operations, and approximately $1 million primarily related to legal,
information technology and consulting fees, which are reflected in the “Selling, general and administrative expenses” line of the
Consolidated Statements of Operations.
Financing Arrangements
Due to the uncertain macroeconomic environment and associated potential impact on future earnings, we took the
following debt-related actions in 2023. In February and March of 2023, we refinanced our debt structure to provide greater
financial flexibility given the uncertainty within the global macroeconomic environment. The refinancing consisted of entering
into a new senior secured term loan B facility in an aggregate principal amount of $900 million due in 2030 (the "2023 Term
Loan B"), issuing $600 million aggregate principal amount of 9.000% senior unsecured notes due in 2031 (the "9.000% Senior
Notes") and redeeming our 4.625% senior notes due in May 2024 (the "4.625% Senior Notes") and our 3.5% senior notes due
in June 2024 (the "3.5% Senior Notes"). Additionally, in February and November 2023, we amended the credit agreement
governing our senior secured credit facility (the “Senior Secured Credit Facility”) prior to any potential future covenant
violation in order to modify the financial covenants and to provide greater strategic and operating flexibility. In May 2024, we
amended the accounts receivable securitization facility (the “ARS Facility”). This amendment extended the maturity date to
May 2025 with no change to the quarterly fluctuating facility limit. Additionally, the amendment removed the two pricing tiers
that were added in the previous amendment, reverting back to a single tier pricing structure. On September 30, 2024, we further
amended the ARS Facility at which time the quarterly fluctuating facility limit was reduced to $175 million in the fourth quarter
of 2024 and $125 million thereafter until the expiration date in May 2025. See Note "Debt" to our consolidated financial
statements included in this Annual Report on Form 10-K for additional information.
In 2024, we had a net pay down of $1.0 billion of our total outstanding debt using a combination of cash generated from
operations and net sale proceeds from the sale of our global Champion business, which was completed on September 30, 2024.
See Note “Assets and Liabilities of Businesses Held for Sale” for additional information.
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We expect to maintain compliance with our covenants, as amended, for at least 12 months from the issuance of these
financial statements based on our current expectations and forecasts, however economic conditions or the occurrence of events
discussed under Part I, Item 1A. “Risk Factors” in this Annual Report on Form 10-K or other SEC filings could cause
noncompliance. If economic conditions worsen or our earnings do not recover as currently estimated by management, this
could impact our ability to maintain compliance with our amended financial covenants and require us to seek additional
amendments to the Senior Secured Credit Facility. If we are not able to obtain such necessary additional amendments, this
would lead to an event of default and, if not cured timely, our lenders could require us to repay our outstanding debt. In that
situation, we may not be able to raise sufficient debt or equity capital, or divest assets, to refinance or repay the lenders.
Tax Expense
During 2024, our effective tax rate was impacted as a result of valuation allowances against certain net deferred tax assets
and unfavorable discrete items. During 2023, our effective tax rate was impacted by one-time discrete tax adjustments. During
2022, our effective tax rate was impacted as a result of a valuation allowance recorded in 2022 against U.S. federal and state
deferred tax assets. Additionally, our 2022 effective tax rate was impacted by tax impairments in Switzerland which generated
deferred tax liabilities.
We maintain intercompany transfer pricing agreements governing sales within our self-owned supply chain, which can
impact the amount of pre-tax income we recognize in foreign jurisdictions. In compliance with applicable tax laws, we
regularly review the terms of these agreements utilizing independent third-party transfer pricing studies to ensure that
intercompany pricing is consistent with what a seller would charge an independent, arm’s length customer, or what a buyer
would pay an independent, arm’s length supplier. Therefore, changes in intercompany pricing are often driven by market
conditions, which are also difficult to predict.
Future acquisitions or divestitures may affect the proportion of our pre-tax income from foreign jurisdictions, both due to
external sales and also increased volume in our self-owned supply chain. We follow a disciplined acquisition strategy focused
on acquisitions that meet strict criteria for strong likely returns with relatively low risk. It is difficult to predict whether or when
such acquisitions or divestitures will occur and whether the acquisition targets or divested operations will be foreign or
domestic. Therefore, it is also difficult to predict the effect of acquisitions or divestitures on the future distribution of our pre-
tax income.
As of December 28, 2024, we have continued to evaluate our global capital allocation strategy and assertions made with
respect to the accumulated earnings of our foreign subsidiaries. As a result of our overall and continuous evaluation, we have
not changed our assertion from prior year and we will continue to permanently reinvest a portion of our unremitted foreign
earnings. The portion of our unremitted foreign earnings as of December 28, 2024 that we intend to remit to the United States
totals approximately $65 million. We have additional foreign earnings totaling $1,267 million which are not permanently
reinvested within our foreign structure but which are permanently reinvested from a U.S. perspective. Earnings which are
permanently reinvested from a U.S. perspective will be used to fund working capital requirements and operations abroad. As of
December 28, 2024, we have accrued for income taxes of $32 million in connection with the tax cost of future repatriations,
including those between foreign entities. These income tax effects include all relevant implications of the planned remittance,
including U.S. federal, state, foreign and withholding taxes.
We regularly assess any significant exposure associated with increases in effective tax rates and adjustments are made as
events occur that warrant adjustment to our income tax provisions. See “We have a complex multinational tax structure, and
changes in effective tax rates or adverse outcomes resulting from examination of our income tax returns could impact our
capital deployment strategy and adversely affect our results.” in Part I, Item 1A. “Risk Factors” in this Annual Report on Form
10-K.
2024 Key Financial Results
Key financial results are as follows:
•
Total net sales in 2024 were $3.5 billion, compared with $3.6 billion in 2023, representing a 4% decrease.
•
Operating profit was $186 million in 2024 compared with $266 million in 2023, representing a 30% decrease. As a
percentage of sales, operating profit was 5.3% in 2024 compared to 7.3% in 2023. Included within operating profit
in 2024 were restructuring and other action-related charges of $229 million. Included within operating profit in 2023
were restructuring and other action-related charges of $23 million.
•
Diluted loss per share from continuing operations was $(0.28) in 2024 compared with diluted earnings per share
from continuing operations of $0.08 in 2023.
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Consolidated Results of Operations — Year Ended December 28, 2024 (“2024”) Compared with Year Ended
December 30, 2023 (“2023”)
Years Ended
December 28,
2024
December 30,
2023
Higher
(Lower)
Percent
Change
(dollars in thousands)
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
3,507,438 $
3,639,386 $
(131,948)
(3.6) %
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,147,914
2,347,496
(199,582)
(8.5)
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,359,524
1,291,890
67,634
5.2
Selling, general and administrative expenses . . . . . . . . . . .
1,173,576
1,025,612
147,964
14.4
Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
185,948
266,278
(80,330)
(30.2)
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
47,441
37,761
9,680
25.6
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
195,901
214,187
(18,286)
(8.5)
Income (loss) from continuing operations before
income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(57,394)
14,330
(71,724)
(500.5)
Income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . .
40,601
(14,818)
55,419
374.0
Income (loss) from continuing operations . . . . . . . . . .
(97,995)
29,148
(127,143)
(436.2)
Loss from discontinued operations, net of tax . . . . . . . . . .
(222,436)
(46,874)
(175,562)
(374.5)
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(320,431) $
(17,726) $
(302,705)
(1,707.7) %
Net Sales
Net sales decreased 4% during 2024 compared to prior year primarily due to the divestiture of the U.S. Sheer Hosiery
business on September 29, 2023, the unfavorable impact from foreign currency exchange rates in our International business of
approximately $40 million, a higher than anticipated level of inventory management actions by select retailers in the U.S.
segment and the continued macro-driven slowdown impacting consumer spending across segments.
Operating Profit
Operating profit as a percentage of net sales was 5.3% in 2024, representing a decrease from 7.3% in the prior year. The
operating margin rate decline primarily resulted from an increase in restructuring and other action-related charges included in
operating profit to $229 million in 2024 from $23 million in 2023, which resulted in a decline in operating margin rate of
approximately 590 basis points. In addition, the operating margin rate decline resulted from approximately 150 basis points of
increased brand investments partially offset by approximately 510 basis points from the reduction in input costs.
Other Highlights
Other Expenses – Other expenses increased by $10 million in 2024 compared to prior year primarily due higher funding
fees for sales of accounts receivables to financial institutions and higher pension expense in 2024. In addition, we recorded a
charge of $9 million in 2024 for the write-off of unamortized debt issuance costs related to the requirement to pay down a
portion of the Company’s outstanding term debt under the Senior Secured Credit Facility with the net proceeds from the sale of
the global Champion business. In 2023, we recorded charges of nearly $9 million incurred as a result of the redemption of the
4.625% Senior Notes and the 3.5% Senior Notes. The redemption charges related to the 4.625% Senior Notes and the 3.5%
Senior Notes included a payment of nearly $5 million for a required make-whole premium related to the redemption of the
3.5% Senior Notes and non-cash charges of nearly $4 million for the write-off of unamortized debt issuance costs. See Note
“Debt” to our consolidated financial statements included in this Annual Report on Form 10-K for additional information.
Interest Expense – Interest expense from continuing operations was $196 million and $214 million in 2024 and 2023,
respectively, representing a decrease of $18 million. The interest expense from continuing operations excludes $54 million and
$66 million in 2024 and 2023, respectively, which was allocated to discontinued operations due to the requirement to pay down
a portion of outstanding term debt under the Senior Secured Credit Facility with the net proceeds from the sale of the global
Champion business. Additionally, in conjunction with the redemption of the 3.5% Senior Notes described in “Other Expenses”
above, we unwound the related cross-currency swap contracts previously designated as cash flow hedges and the remaining
gain in accumulated other comprehensive loss of $1 million was released into earnings at the time of settlement which partially
offset interest expense in 2023. See Note “Financial Instruments” to our consolidated financial statements included in this
Annual Report on Form 10-K for additional information. Combined interest expense from continuing and discontinued
operations decreased $31 million in 2024 compared to 2023 primarily due to lower weighted average outstanding debt balances
partially offset by a higher weighted average interest rate on our borrowings during 2024. Our combined weighted average
interest rate, including the portion of interest expense that was allocated to discontinued operations, on our outstanding debt was
7.44% for 2024 compared to 7.00% for 2023.
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35
Income Tax Expense (Benefit) – In 2024, income tax expense was $41 million, resulting in an effective income tax rate of
(70.7)% and in 2023, income tax benefit was $15 million, resulting in an effective income tax rate of (103.4)%. Our effective
tax rate for 2024 and 2023 primarily differs from the U.S. statutory rate primarily due to valuation allowances against certain
net tax assets and one-time discrete tax adjustments in 2023.
Discontinued Operations – The results of our discontinued operations include the operations of our global Champion
business, U.S.-based outlet store business and the Champion Japan business, which we reached the decision to exit in 2024. See
Note “Assets and Liabilities of Businesses Held for Sale” to our consolidated financial statements included in this Annual
Report on Form 10-K for additional information.
Operating Results by Business Segment — Year Ended December 28, 2024 (“2024”) Compared with Year Ended
December 30, 2023 (“2023”)
Net Sales
Years Ended
December 28,
2024
December 30,
2023
Higher
(Lower)
Percent
Change
(dollars in thousands)
U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2,581,137 $
2,636,656 $
(55,519)
(2.1) %
International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
908,433
933,067
(24,634)
(2.6)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17,868
69,663
(51,795)
(74.4)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
3,507,438 $
3,639,386 $
(131,948)
(3.6) %
Operating Profit and Margin
Years Ended
December 28,
2024
December 30,
2023
Higher
(Lower)
Percent
Change
(dollars in thousands)
U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . $
548,852
21.3 % $
404,273
15.3 % $
144,579
35.8 %
International . . . . . . . . . . . . . . . . . . . . .
106,506
11.7
108,833
11.7
(2,327)
(2.1)
Other . . . . . . . . . . . . . . . . . . . . . . . . . .
2,550
14.3
(1,189)
(1.7)
3,739
314.5
Corporate(1) . . . . . . . . . . . . . . . . . . . . .
(471,960)
NM
(245,639)
NM
(226,321)
(92.1)
Total . . . . . . . . . . . . . . . . . . . . . . $
185,948
5.3 % $
266,278
7.3 % $
(80,330)
(30.2) %
(1)
Corporate includes general corporate expenses, amortization of intangibles and restructuring and other action-related charges.
U.S.
U.S. net sales decreased 2% compared to prior year primarily due to higher than anticipated level of inventory
management actions by select retailers in the first half of 2024 and softer point-of-sale trends stemming from the continued
macroeconomic pressures.
U.S. operating margin rate was 21.3%, an increase from 15.3% in the prior year. The operating margin rate improvement
primarily resulted from approximately 595 basis points from a reduction in input costs and approximately 410 basis points from
the savings realized from continued improvement in our supply chain partially offset by approximately 220 basis points due to
unfavorable sales mix and 195 basis points of increased brand investments.
International
Net sales in the International segment decreased 3% compared to prior year due to unfavorable foreign currency exchange
rates and macroeconomic pressures impacting consumer sentiment in Australia, partially offset by growth in the Americas and
Asia. The unfavorable impact of foreign currency exchange rates decreased net sales approximately $40 million in 2024.
International net sales on a constant currency basis, defined as net sales excluding the impact of foreign currency, increased 2%.
The impact of foreign currency exchange rates is calculated by applying prior period exchange rates to the current year financial
results. We believe constant-currency information is useful to management and investors to facilitate comparison of operating
results and better identify trends in our businesses.
International operating margin rate was 11.7% in both 2024 and 2023. The operating margin rate was impacted by
approximately 215 basis points from the reduction in input costs and approximately 80 basis points due to benefits from cost
savings initiatives offset by approximately 130 basis points of unfavorable sales mix and 160 basis points of increased brand
investments and administrative expenses.
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36
Other
Other net sales decreased primarily as a result of decreased hosiery sales as we completed the sale of our U.S. Sheer
Hosiery business on September 29, 2023. Operating margin rate increased as a result of the short term transition service
agreements and support of disposed businesses.
Other consists of our U.S. Sheer Hosiery business prior to its sale on September 29, 2023, certain sales from our supply
chain to the European Innerwear business which was sold on March 5, 2022, short term transition service agreements for the
global Champion business and support of disposed businesses. See Note “Assets and Liabilities of Businesses Held for Sale” to
our consolidated financial statements included in this Annual Report on Form 10-K for additional information.
Corporate
Corporate expenses were higher in 2024 compared to the prior year primarily due to higher restructuring and other action-
related charges in 2024 and the benefit from business interruption insurance proceeds received, which reduced corporate
expenses in 2023.
In 2023, we recognized a benefit related to business interruption insurance proceeds of approximately $24 million, of
which approximately $23 million is reflected in the “Cost of sales” line and approximately $1 million is reflected in the
“Selling, general and administrative expenses” line of the Consolidated Statements of Operations. We received total business
interruption insurance proceeds of $26 million in 2023, a portion of which was recognized as an expected insurance recovery in
2022, primarily related to the recovery of lost profit from business interruptions.
Significant restructuring and other action-related charges within operating profit are discussed below.
•
Supply chain restructuring and consolidation charges in 2024 include:
◦
$81 million reflected in the “Cost of Sales” line in the Consolidated Statements of Operations, primarily
related to charges of $54 million to write down inventory as a result of further SKU rationalization efforts and
$20 million for severance and related employee actions for impacted supply chain facilities; and
◦
$91 million reflected in the “Selling, general and administrative expenses” line in the Consolidated
Statements of Operations, primarily related to charges of $72 million for impairment of an owned facility that
was classified as held for sale and a right of use asset for which the leased facility was not in operation, $11
million for accelerated amortization of right of use assets for leased facilities that we expect to exit before the
end of the contractual lease term, and $4 million for headcount actions and related severance related to
restructuring and consolidation efforts within our supply chain network.
•
Supply chain restructuring and consolidation charges in 2023 are reflected in the “Cost of Sales” line in the
Consolidated Statements of Operations and primarily represent supply chain segmentation charges to restructure and
position our distribution and manufacturing network to align with demand trends.
•
Corporate asset impairment charges in 2024 include charges of $10 million, reflected in the “Cost of sales” line in the
Consolidated Statements of Operations, primarily related to a contract termination, and $10 million, reflected in the
“Selling, general and administrative expenses” line in the Consolidated Statements of Operations, primarily related to
charges for impairment of our headquarters location sold in 2024.
•
In addition to the charges discussed above, the following restructuring and other action-related charges are primarily
reflected in the “Selling, general and administrative expenses” line in the Consolidated Statements of Operations in
2024 and 2023:
◦
Headcount actions and related severance charges related to operating model initiatives.
◦
Fees for professional services that primarily include consulting and advisory services related to restructuring
activities.
◦
Technology charges related to the implementation of our technology modernization initiative including the
implementation of a global enterprise resource planning platform.
◦
The loss on sale of business and classification of assets held for sale related to the sale of our U.S. Sheer
Hosiery business, which was sold to AllStar in 2023. See Note “Assets and Liabilities of Businesses Held for
Sale” to our consolidated financial statements included in this Annual Report on Form 10-K for additional
information regarding the U.S. Sheer Hosiery business.
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37
•
Restructuring and other action-related charges recorded in the “Other expenses” and “Interest expense, net” lines in the
Consolidated Statements of Operations included the following:
◦
In 2024, we recorded a charge of $9 million in the “Other expenses” line for the write-off of unamortized debt
issuance costs related to the requirement to pay down a portion of our outstanding term debt under the Senior
Secured Credit Facility with the net proceeds from the sale of the global Champion business.
◦
In 2023, we recorded a charge of nearly $9 million in restructuring and other action-related charges related to
the redemption of our 4.625% Senior Notes and 3.5% Senior Notes. The charge, which is recorded in the
“Other expenses” line, included a payment of nearly $5 million for a required make-whole premium related to
the redemption of the 3.5% Senior Notes and a non-cash charge of nearly $4 million for the write-off of
unamortized debt issuance costs related to the redemption of the 4.625% Senior Notes and the 3.5% Senior
Notes.
◦
Additionally, in 2023, in connection with the redemption of the 3.5% Senior Notes, we unwound the related
cross-currency swap contracts previously designated as cash flow hedges and the remaining gain in AOCI of
$1 million was released into earnings at the time of settlement which is recorded in the “Interest expense, net”
line. See Note “Financial Instruments and Risk Management” to our consolidated financial statements
included in this Annual Report on Form 10-K for additional information.
The components of restructuring and other action-related charges were as follows:
Years Ended
December 28,
2024
December 30,
2023
(dollars in thousands)
Restructuring and other action-related charges:
Supply chain restructuring and consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
171,529 $
1,128
Corporate asset impairment charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20,107
—
Headcount actions and related severance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16,993
5,149
Professional services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16,488
3,819
Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,859
8,347
Loss on sale of business and classification of assets held for sale . . . . . . . . . . . . . . . . . . . . . .
—
3,641
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,247
715
Total included in operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
229,223
22,799
Loss on extinguishment and refinancing of debt included in other expenses . . . . . . . . . . . . . .
9,412
8,466
Gain on final settlement of cross currency swap contracts included in other expenses . . . . . . .
—
(116)
Gain on final settlement of cross currency swap contracts included in interest expense, net . .
—
(1,254)
Total included in income (loss) from continuing operations before income taxes . . . . . . .
238,635
29,895
Discrete tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
85,122
Tax effect on actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
Total included in income tax (expense) benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
85,122
Total restructuring and other action-related charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
238,635 $
(55,227)
Table of Contents
38
Consolidated Results of Operations — Year Ended December 30, 2023 (“2023”) Compared with Year Ended
December 31, 2022 (“2022”)
Years Ended
December 30,
2023
December 31,
2022
Higher
(Lower)
Percent
Change
(dollars in thousands)
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
3,639,386 $
3,862,809 $
(223,423)
(5.8) %
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,347,496
2,515,774
(168,278)
(6.7)
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,291,890
1,347,035
(55,145)
(4.1)
Selling, general and administrative expenses . . . . . . . . . . .
1,025,612
1,079,664
(54,052)
(5.0)
Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
266,278
267,371
(1,093)
(0.4)
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
37,761
8,294
29,467
355.3
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
214,187
131,733
82,454
62.6
Income from continuing operations before income
taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14,330
127,344
(113,014)
(88.7)
Income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . .
(14,818)
447,889
(462,707)
(103.3)
Income (loss) from continuing operations . . . . . . . . . .
29,148
(320,545)
349,693
109.1
Income (loss) from discontinued operations, net of tax . . .
(46,874)
193,341
(240,215)
(124.2)
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(17,726) $
(127,204) $
109,478
86.1 %
Net Sales
Net sales decreased 6% during 2023 compared to prior year primarily due to the continued macro-driven slowdown
impacting consumer spending and the unfavorable impact from foreign currency exchange rates in our International business of
approximately $49 million partially offset by growth within our U.S. innerwear categories from product innovation and the
impact of prior year business disruption caused by the ransomware attack on the business in the second quarter of 2022.
Operating Profit
Operating profit as a percentage of net sales was 7.3% in 2023, representing an increase from 6.9% in the prior year. The
operating margin rate improvement primarily resulted from approximately 105 basis points related to manufacturing time-out
costs associated with our inventory reduction actions taken in 2022, approximately 100 basis points from the recovery of the
business interruption insurance claim received in 2023 related to the ransomware attack which occurred in the second quarter of
2022 partially offset by approximately 175 net basis points of increased input costs and approximately 35 basis points of
unfavorable sales mix. Included in operating profit were restructuring and other action-related charges of $23 million in 2023
and $55 million in 2022, which resulted in an improvement in operating margin rate of approximately 80 basis points.
Other Highlights
Other Expenses – Other expenses increased by $29 million in 2023 compared to prior year primarily due to higher
funding fees for sales of accounts receivable to financial institutions with additional customers entering the programs and
higher pension expense in 2023 along with charges of nearly $9 million incurred as a result of the redemption of the 4.625%
Senior Notes and the 3.5% Senior Notes in 2023. The redemption charges related to the 4.625% Senior Notes and the 3.5%
Senior Notes included a payment of nearly $5 million for a required make-whole premium related to the redemption of the
3.5% Senior Notes and non-cash charges of nearly $4 million for the write-off of unamortized debt issuance costs. See Note
“Debt” to our consolidated financial statements included in this Annual Report on Form 10-K for additional information.
Interest Expense – Interest expense from continuing operations was higher by $82 million in 2023 compared to prior year,
primarily due to a higher weighted average interest rate on our borrowings during 2023. The interest expense from continuing
operations excludes $66 million and $26 million in 2023 and 2022, respectively, which was allocated to discontinued
operations due to the requirement to pay down a portion of outstanding term debt under the Senior Secured Credit Facility with
the net proceeds from the sale of the global Champion business. Additionally, in conjunction with the redemption of the 3.5%
Senior Notes described in “Other Expenses” above, we unwound the related cross-currency swap contracts previously
designated as cash flow hedges and the remaining gain in accumulated other comprehensive loss of $1 million was released into
earnings at the time of settlement which partially offset interest expense in 2023. See Note “Financial Instruments” to our
consolidated financial statements included in this Annual Report on Form 10-K for additional information. Combined interest
expense from continuing and discontinued operations increased $118 million in 2023 compared to 2022, primarily due to a
higher weighted average interest rate on our borrowings during 2023. Our weighted average interest rate on our outstanding
debt was 7.00% for 2023 compared to 3.79% for 2022.
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39
Income Tax Expense (Benefit) – In 2023, income tax benefit was $15 million, resulting in an effective income tax rate of
(103.4)% and in 2022, income tax expense was $448 million, resulting in an effective income tax rate of 351.7%. Our effective
tax rate for 2023 primarily differs from the U.S. statutory rate primarily due to one-time discrete tax adjustments. The higher
effective tax rate for 2022 was primarily due to non-cash discrete tax charges for valuation allowances established against U.S.
deferred tax assets and tax impairments in Switzerland which generated deferred tax liabilities during 2022.
Discontinued Operations – The results of our discontinued operations include the operations of our global Champion
business, U.S.-based outlet store business and the Champion Japan business, which we reached the decision to exit in 2024, and
the operations of our European Innerwear business which was sold on March 5, 2022. See Note “Assets and Liabilities of
Businesses Held for Sale” to our consolidated financial statements included in this Annual Report on Form 10-K for additional
information.
Operating Results by Business Segment — Year Ended December 30, 2023 (“2023”) Compared with Year Ended
December 31, 2022 (“2022”)
Net Sales
Years Ended
December 30,
2023
December 31,
2022
Higher
(Lower)
Percent
Change
(dollars in thousands)
U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2,636,656 $
2,692,175 $
(55,519)
(2.1) %
International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
933,067
1,010,541
(77,474)
(7.7)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
69,663
160,093
(90,430)
(56.5)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
3,639,386 $
3,862,809 $
(223,423)
(5.8) %
Operating Profit and Margin
Years Ended
December 30,
2023
December 31,
2022
Higher
(Lower)
Percent
Change
(dollars in thousands)
U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . $
404,273
15.3 % $
402,697
15.0 % $
1,576
0.4 %
International . . . . . . . . . . . . . . . . . . . . .
108,833
11.7
144,373
14.3
(35,540)
(24.6)
Other . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,189)
(1.7)
21,774
13.6
(22,963)
(105.5)
Corporate(1) . . . . . . . . . . . . . . . . . . . . .
(245,639)
NM
(301,473)
NM
55,834
18.5
Total . . . . . . . . . . . . . . . . . . . . . . $
266,278
7.3 % $
267,371
6.9 % $
(1,093)
(0.4) %
(1)
Corporate includes general corporate expenses, amortization of intangibles and restructuring and other action-related charges.
U.S.
U.S. net sales decreased 2% compared to prior year primarily due to softer point-of-sale trends stemming from the
macroeconomic pressures partially offset by growth from product innovation, increased space gains, pricing actions and lower
sales in prior year due to business disruption caused by the ransomware attack in the second quarter of 2022.
U.S. operating margin rate was 15.3%, an increase from 15.0% in the prior year. The operating margin rate increase
primarily resulted from approximately 145 basis points related to manufacturing time-out costs associated with our inventory
reduction actions taken in 2022 and approximately 95 basis points of selective price increases partially offset by approximately
185 net basis points of increased input costs.
International
Net sales in the International segment decreased 8% compared to prior year primarily due to unfavorable foreign currency
exchange rates and macroeconomic pressures impacting consumer spending in Australia. The unfavorable impact of foreign
currency exchange rates decreased net sales approximately $49 million in 2023. International net sales on a constant currency
basis, defined as net sales excluding the impact of foreign currency, decreased 3%. The impact of foreign currency exchange
rates is calculated by applying prior period exchange rates to the current year financial results. We believe constant-currency
information is useful to management and investors to facilitate comparison of operating results and better identify trends in our
businesses.
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40
International operating margin rate was 11.7%, a decrease from 14.3% in the prior year. The operating margin rate decline
primarily resulted from approximately 255 basis points of unfavorable business mix as consumers shifted to lower margin
categories driven by the macroeconomic environment and approximately 115 net basis points of increased input costs partially
offset by approximately 105 basis points of net cost reduction actions and efficiencies within our supply chain.
Other
Other net sales and operating margin rate decreased in 2023 as compared to the prior year, primarily as a result of
decreased sales from our supply chain to the divested European Innerwear business and the resulting deleverage of selling,
general and administrative expenses, respectively.
We continued certain sales from our supply chain to the European Innerwear business on a transitional basis after the sale
of the business on March 5, 2022. These sales and the related profit are included in Other in all periods presented, as applicable
and have not been eliminated as intercompany transactions in consolidation for the period when the European Innerwear
business was owned by us. See Note “Assets and Liabilities of Businesses Held for Sale” to our consolidated financial
statements included in this Annual Report on Form 10-K for additional information.
Corporate
Corporate expenses were lower in 2023 compared to the prior year primarily due to lower restructuring and other action-
related charges, business interruption insurance proceeds received and lower costs incurred during 2023 related to the
ransomware attack which occurred during the second quarter of 2022, partially offset by an increase in information technology
costs.
In 2023, we recognized a benefit related to business interruption insurance proceeds of approximately $24 million, of
which approximately $23 million is reflected in the “Cost of sales” line and approximately $1 million is reflected in the
“Selling, general and administrative expenses” line of the Consolidated Statements of Operations. We received total business
interruption insurance proceeds of $26 million in 2023, a portion of which was recognized as an expected insurance recovery in
2022, primarily related to the recovery of lost profit from business interruptions. In 2022, we incurred costs of approximately
$15 million, net of expected insurance recoveries, related to the ransomware attack. The costs, net of expected insurance
recoveries, incurred during 2022 included approximately $14 million primarily related to supply chain disruptions, which are
reflected in the “Cost of sales” line of the Consolidated Statements of Operations, and approximately $1 million primarily
related to legal, information technology and consulting fees, which are reflected in the “Selling, general and administrative
expenses” line of the Consolidated Statements of Operations.
Restructuring and other action-related charges within operating profit in 2023 and 2022 include:
•
Supply chain restructuring and consolidation charges representing supply chain segmentation to restructure and
position our distribution and manufacturing network to align with our demand trends.
•
Headcount actions and related severance charges related to operating model initiatives.
•
Professional services primarily including consulting and advisory services related to restructuring activities.
•
Technology charges related to the implementation of our technology modernization initiative including the
implementation of a global enterprise resource planning platform.
•
The (gain) loss on sale of business and classification of assets held for sale related to the sale of our U.S. Sheer
Hosiery business, which was sold to AllStar in 2023. See Note “Assets and Liabilities of Businesses Held for Sale” to
our consolidated financial statements included in this Annual Report on Form 10-K for additional information
regarding the U.S. Sheer Hosiery business.
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41
The components of restructuring and other action-related charges were as follows:
Years Ended
December 30,
2023
December 31,
2022
(dollars in thousands)
Restructuring and other action-related charges:
Supply chain restructuring and consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1,128 $
14,345
Headcount actions and related severance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,149
6,975
Professional services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,819
23,994
Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,347
11,922
Loss (gain) on sale of business and classification of assets held for sale . . . . . . . . . . . . . . . .
3,641
(3,535)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
715
941
Total included in operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22,799
54,642
Loss on extinguishment and refinancing of debt included in other expenses . . . . . . . . . . . . . .
8,466
—
Gain on final settlement of cross currency swap contracts included in other expenses . . . . . . .
(116)
—
Gain on final settlement of cross currency swap contracts included in interest expense, net . .
(1,254)
—
Total included in income (loss) from continuing operations before income taxes . . . . . . .
29,895
54,642
Discrete tax (expense) benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
85,122
(422,918)
Tax effect on actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
9,152
Total included in income tax (expense) benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
85,122
(413,766)
Total restructuring and other action-related charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(55,227) $
468,408
Liquidity and Capital Resources
Cash Requirements and Trends and Uncertainties Affecting Liquidity
We rely on our cash flows generated from operations and the borrowing capacity under our credit facilities to meet the
cash requirements of our business. In January 2023, we shifted our capital allocation strategy to utilize our cash from operations
for payments to our employees and vendors in the normal course of business and to reinvest in our business through capital
expenditures. We then utilize our free cash flow (cash from operations less capital expenditures) to pay down debt to bring our
leverage back to a range that is no greater than two to three times on a net debt-to-adjusted EBITDA basis.
Based on our current expectations and forecasts of future earnings and cash flows, we believe we have sufficient cash and
available borrowings to support our operations and key business strategies for at least the next 12 months and we currently
believe our cash flows and available borrowings, together with our access to the capital markets, are sufficient to support our
longer term liquidity needs as well.
Our primary financing arrangements are our Senior Secured Credit Facility, our 9.000% senior notes due in 2031 (the
“9.000% Senior Notes”), our 4.875% senior notes due in 2026 (the “4.875% Senior Notes”) and our accounts receivable
securitization facility due in 2025 (the “ARS Facility”). The Senior Secured Credit Facility consists of a $1 billion revolving
loan facility due in 2026 (the “Revolving Loan Facility”), a senior secured term loan A facility due in 2026 (the “Term Loan
A”), and a senior secured term loan B facility due in 2030 (the “Term Loan B”).
Our primary sources of liquidity are cash generated from global operations and cash available under our Revolving Loan
Facility, our ARS Facility and our other international credit facilities.
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42
We had the following borrowing capacity and available liquidity under our credit facilities as of December 28, 2024:
As of December 28, 2024
Borrowing
Capacity
Available
Liquidity
(dollars in thousands)
Senior Secured Credit Facility:
Revolving Loan Facility(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1,000,000 $
996,743
ARS Facility(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
126,686
31,686
Other international credit facilities(3)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,477
(4,997)
Total liquidity from credit facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1,130,163 $
1,023,432
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
214,854
Total liquidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
1,238,286
(1)
A portion of the Revolving Loan Facility is available to be borrowed in Euros or Australian dollars. Available liquidity is reduced by
standby and trade letters of credit issued and outstanding under this facility.
(2)
Borrowing availability under the ARS Facility is subject to a quarterly facility limit of $175 million in the fourth quarter of 2024 and
$125 million thereafter until the expiration date in May 2025 and permitted only to the extent that the face of the receivables in the
collateral pool, net of applicable reserves and other deductions, exceeds the outstanding loans.
(3)
Available liquidity for other international credit facilities is reduced for any outstanding international letters of credit. The international
letters of credit are not outstanding under any specific credit facility and do not reduce actual borrowing capacity under the specific
credit facilities.
The following have impacted or may impact our liquidity:
•
We have principal and interest obligations under our debt and ongoing financial covenants under those debt
facilities.
•
We used a combination of cash generated from operations and net proceeds from the sale of the intellectual property
and certain operating assets of our global Champion business toward a net pay down of $1.0 billion of our total
outstanding debt in 2024.
•
The difficult global macroeconomic environment has had, and may continue to have, a negative impact on our
business.
•
Our Board of Directors eliminated our quarterly cash dividend as we shifted our capital allocation strategy in
January 2023 to pay down debt to bring our leverage back to a range that is no greater than two to three times on a
net debt-to-adjusted EBITDA basis. The declaration of any future dividends and, if declared, the amount of any such
dividends, will be subject to our actual future earnings, capital requirements, regulatory restrictions, debt covenants,
other contractual restrictions and to the discretion of our Board of Directors.
•
We have invested in global growth initiatives, as well as marketing and brand building.
•
We previously launched a series of multi-year cost savings programs and recently began implementing significant
restructuring and consolidation efforts within our supply chain network, both manufacturing and distribution, as well
as corporate cost and headcount reductions within continuing operations to drive stronger operating performance and
margin expansion.
•
We expect capital expenditures of approximately $65 million in 2025, including capital expenditures of $50 million
within investing cash flow activities and cloud computing arrangements of $15 million within operating cash flow
activities.
•
In the future, when it aligns with our capital allocation strategy and absent any covenant restrictions, we may pursue
strategic business acquisitions.
•
We have completed and may pursue strategic divestitures, such as the recently completed Initial Closing of our
global Champion business in the fourth quarter of 2024 on September 30, 2024 and the exit of our U.S.-based outlet
store business in July 2024. In December 2024, the we finalized plans to exit the Champion Japan business and
expect to complete the sale of the business within the next 12 months. Subsequent to the 2024 year ended, we
completed the Deferred Closing of our global Champion business on January 31, 2025.
•
We made total cash contributions of $15 million to our U.S Pension Plans in 2024, of which $10 million were
required. We expect to make required cash contributions of $12 million to our U.S. pension plans in 2025 based on
the preliminary calculation by our actuary. We may also elect to make additional voluntary contributions. Our U.S.
qualified pension plans were both approximately 93% funded as of December 1, 2024 and 2023 under the Pension
Protection Act funding rules.
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43
•
We may increase or decrease the portion of the current-year income of our foreign subsidiaries that we remit to the
United States, which could impact our effective income tax rate. We have not changed our reinvestment strategy
from the prior year with regards to our unremitted foreign earnings and intend to remit foreign earnings totaling $65
million to the United States.
Future Contractual Obligations and Commitments
The following table contains information on our material contractual obligations and commitments at December 28, 2024,
and their expected timing on future cash flows and liquidity.
Payments Due by Period
At December 28,
2024
Fiscal 2025
Fiscal
2026-2027
Fiscal
2028-2029
Fiscal
2030 and
Thereafter
(dollars in thousands)
Operating activities:
Interest on debt obligations(1) . . . . . . . . . $
570,217 $
151,293 $
196,520 $
157,968 $
64,436
Inventory purchase obligations . . . . . . . .
240,398
240,398
—
—
—
Operating lease obligations(2) . . . . . . . . .
338,761
79,331
136,618
69,811
53,001
Defined benefit plan minimum
contributions(3)
. . . . . . . . . . . . . . . . . . .
12,000
12,000
—
—
—
Tax obligations(4)
. . . . . . . . . . . . . . . . . . .
59,533
58,827
706
—
—
Other obligations(5) . . . . . . . . . . . . . . . . .
221,091
108,763
56,249
45,958
10,121
Investing activities:
Capital expenditures . . . . . . . . . . . . . . . .
11,632
11,632
—
—
—
Financing activities:
Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,298,267
95,000
1,303,070
—
900,197
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
3,751,899 $
757,244 $
1,693,163 $
273,737 $
1,027,755
(1)
Interest obligations on floating rate debt instruments are calculated for future periods using interest rates in effect at December 28,
2024.
(2)
Material operating lease commitments that have been signed, but not yet commenced are included in operating lease obligations.
(3)
Represents only the required minimum pension contributions to our U.S. qualified pension plans in the current year. We expect to make
required cash contributions of $12 million to our U.S. pension plans in 2025 based on a preliminary calculation by our actuary. We may
also elect to make additional voluntary contributions to maintain certain funded levels. For a discussion of our pension plan obligations,
see Note “Defined Benefit Pension Plans” to our consolidated financial statements included in this Annual Report on Form 10-K.
(4)
Represents current tax liabilities, uncertain tax positions and transition tax liabilities resulting from the Tax Cuts and Jobs Act.
(5)
Primarily represents the projected payments for liabilities recorded on the Consolidated Balance Sheets for royalty-bearing license
agreements, certain employee benefit obligations, information technology services, obligations under non-inventory-related purchase
orders, deferred compensation and marketing and advertising obligations.
Sources and Uses of Our Cash
The information presented below regarding the sources and uses of our cash flows for the years ended December 28, 2024
and December 30, 2023 was derived from our consolidated financial statements.
Years Ended
December 28,
2024
December 30,
2023
(dollars in thousands)
Operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
264,243 $
561,749
Investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
813,033
(23,483)
Financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,046,720)
(580,075)
Effect of changes in foreign exchange rates on cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(20,703)
8,897
Change in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,853
(32,912)
Cash and cash equivalents at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
205,501
238,413
Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
215,354 $
205,501
Balances included in the Consolidated Balance Sheets: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
214,854 $
185,217
Cash and cash equivalents included in current assets held for sale . . . . . . . . . . . . . . . . . . . . .
500
20,284
Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
215,354 $
205,501
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Operating Activities
Our overall liquidity has historically been driven by our cash flow provided by operating activities, which is dependent on
net operating results and changes in our working capital. Cash from operating activities decreased from prior year as we
experienced significant reductions in working capital in 2023, primarily driven by inventory reduction initiatives. In 2024, cash
from operations was driven by margin expansion and continued discipline in managing working capital.
Investing Activities
Net cash provided by investing activities increased in 2024 primarily driven by $857 million proceeds received from the
sale of our global Champion business on September 30, 2024, $12 million proceeds received from the sale of assets and lower
capital expenditures in 2024. This was partially offset by the $19 million cash receipt for the final settlement of the cross
currency swap contracts previously designated as net investment hedges in connection with the redemption of the 3.5% Senior
Notes in 2023 and the exit of our U.S.-based outlet store business in July 2024 which resulted in a cash payment of $12 million.
Financing Activities
Net cash used by financing activities of over $1.0 billion in 2024 primarily resulted from net repayments of our total
outstanding debt using a combination of cash generated from operations and net sale proceeds from the Initial Closing of the
sale of the global Champion business. Net cash used by financing activities of $580 million in 2023 primarily resulted from a
combination of refinancing our debt structure and net repayments on borrowings of $546 million on our debt facilities and
payments $28 million to refinance our debt structure to provide greater financial flexibility given the uncertainty within the
macroeconomic environment, which included a required make-whole premium of $5 million related to the redemption of the
3.5% Senior Notes and total capitalized debt issuance costs of $23 million related to the issuance of the 2023 Term Loan B and
the 9.000% Senior Notes. See Note “Debt” to our consolidated financial statements included in this Annual Report on Form 10-
K for additional information.
Financing Arrangements
In September 2024, we amended the ARS Facility at which time the quarterly fluctuating facility line was reduced to
$175,000 in the fourth quarter of 2024 and $125,000 thereafter until the expiration date in May 2025. ARS Facility borrowings
are permitted only to the extent that the face value of the receivables in the collateral pool, net of applicable concentrations,
reserves and other deductions, exceeds the outstanding loans. See Note “Debt” to our consolidated financial statements included
in this Annual Report on Form 10-K for additional information.
In May 2024, we amended the ARS Facility. This amendment extended the maturity date to May 2025 with no change to
the quarterly fluctuating facility limit, which was $225 million as of December 28, 2024. Additionally, the amendment removed
the two pricing tiers that were added in the previous amendment, reverting back to a single tier pricing structure. See Note
“Debt” to our consolidated financial statements included in this Annual Report on Form 10-K for additional information.
In November 2023, given the continuing uncertain economic environment and the associated potential impact on future
earnings, we amended the credit agreement governing the Senior Secured Credit Facility prior to any potential future covenant
violation in order to modify the financial covenants and to provide greater strategic financial flexibility. See Note “Debt” to our
consolidated financial statements and “Liquidity and Capital Resources” included in this Annual Report on Form 10-K for
additional information.
In June 2023, we amended the ARS Facility. This amendment extended the maturity date to May 2024 with no change to
the quarterly fluctuating facility limit, which was $225 million as of December 28, 2024. Additionally, the amendment created
two pricing tiers based on a consolidated net total leverage ratio of 4.50 to 1.00. See Note “Debt” to our consolidated financial
statements included in this Annual Report on Form 10-K for additional information.
In February and March of 2023, we refinanced our debt structure to provide greater financial flexibility given the
uncertainty within the global macroeconomic environment. The refinancing consisted of entering into the 2023 Term Loan B,
issuing the 9.000% Senior Notes and redeeming the 4.625% Senior Notes and the 3.5% Senior Notes. See Note “Debt” to our
consolidated financial statements and “Liquidity and Capital Resources” included in this Annual Report on Form 10-K for
additional information.
We believe our financing structure provides a secure base to support our operations and key business strategies. As of
December 28, 2024, we were in compliance with all financial covenants under our credit facilities and other outstanding
indebtedness. Under the terms of the Senior Secured Credit Facility, among other financial and non-financial covenants, we are
required to maintain a minimum interest coverage ratio and a maximum total debt to EBITDA (earnings before interest, income
taxes, depreciation expense and amortization, as computed pursuant to the Senior Secured Credit Facility), or leverage ratio,
each of which is defined in the Senior Secured Credit Facility. The method of calculating all of the components used in the
covenants is included in the Senior Secured Credit Facility.
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45
We expect to maintain compliance with our covenants, as amended, for at least 12 months from the issuance of these
financial statements based on our current expectations and forecasts, however economic conditions or the occurrence of events
discussed under Part I, Item 1A. “Risk Factors” in this Annual Report on Form 10-K or other SEC filings could cause
noncompliance. If economic conditions worsen or our earnings do not recover as currently estimated by management, this
could impact our ability to maintain compliance with our amended financial covenants and require us to seek additional
amendments to the Senior Secured Credit Facility. If we are not able to obtain such necessary additional amendments, this
would lead to an event of default and, if not cured timely, our lenders could require us to repay our outstanding debt. In that
situation, we may not be able to raise sufficient debt or equity capital, or divest assets, to refinance or repay the lenders.
For further details regarding our liquidity from our available cash balances and credit facilities see “Cash Requirements
and Trends and Uncertainties Affecting Liquidity” above.
Critical Accounting Policies and Estimates
We have chosen accounting policies that we believe are appropriate to report our operating results and financial condition
in conformity with accounting principles generally accepted in the United States. We apply these accounting policies in a
consistent manner. Our significant accounting policies are discussed in Note “Summary of Significant Accounting Policies” to
our consolidated financial statements included in this Annual Report on Form 10-K.
The application of critical accounting policies requires that we make estimates and assumptions that affect the reported
amounts of assets, liabilities, revenues and expenses and related disclosures. These estimates and assumptions are based on
historical and other factors believed to be reasonable under the circumstances. We evaluate these estimates and assumptions on
an ongoing basis and may retain outside consultants to assist in our evaluation. If actual results ultimately differ from previous
estimates, the revisions are included in results of operations in the period in which the actual amounts become known. The
critical accounting policies that involve the most significant management judgments and estimates used in preparation of our
consolidated financial statements, or are the most sensitive to change from outside factors, are described below:
Sales Recognition and Incentives
We recognize revenue when obligations under the terms of a contract with a customer are satisfied, which occurs at a
point in time, upon either shipment or delivery to the customer. Revenue is measured as the amount of consideration we expect
to receive in exchange for transferring goods, which includes estimates for variable consideration. We record provisions for any
uncollectible amounts based upon our historical collection statistics and current customer information. Our management
reviews these estimates each quarter and makes adjustments based upon actual experience.
Note “Summary of Significant Accounting Policies — (d) Sales Recognition and Incentives” to our consolidated financial
statements included in this Annual Report on Form 10-K describes a variety of sales incentives that we offer to resellers and
consumers of our products. Measuring the cost of these incentives requires, in many cases, estimating future customer
utilization and redemption rates. We use historical data for similar transactions to estimate the cost of current incentive
programs. Our management reviews these estimates each quarter and makes adjustments based upon actual experience and
other available information. We classify the costs associated with cooperative advertising as a reduction in the “Net sales” line
in our Consolidated Statements of Operations.
Accounts Receivable Valuation
Accounts receivable consist primarily of amounts due from customers. We carry our accounts receivable at net realizable
value. In determining the appropriate allowance for doubtful accounts, we evaluate our receivables on a collection (pool) basis
which are aggregated based on similar risk characteristics and consider a combination of factors, such as historical losses, the
aging of trade receivables, industry trends, and our customers’ financial strength, credit standing and payment and default
history. Changes in the characteristics of our accounts receivable and the aforementioned factors, among others, are reviewed
quarterly and may lead to adjustments in our allowance for doubtful accounts. The calculation of the required allowance
involves judgment by our management as to the impact of these and other factors on the ultimate realization of our trade
receivables. Charges to the allowance for doubtful accounts are reflected in the “Selling, general and administrative expenses”
line and charges to the allowance for customer chargebacks and other customer deductions are primarily reflected as a reduction
in the “Net sales” line in our Consolidated Statements of Operations. Because we cannot predict future changes in the financial
stability of our customers, actual future losses from uncollectible accounts may differ from our estimates. If the financial
condition of our customers were to deteriorate, resulting in their inability to make payments, a larger reserve might be required
in the future. The amount of actual historical losses has not varied materially from our estimates for bad debts.
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46
Inventory Valuation
We carry inventory on our balance sheet at the estimated lower of cost or market. Cost is determined by the first-in, first-
out, or “FIFO,” method for our inventories. We carry obsolete, damaged and excess inventory at net realizable value, which we
determine by assessing historical recovery rates, current market conditions and our future marketing and sales plans. Because
our assessment of net realizable value is made at a point in time, there are inherent uncertainties related to our value
determination. Market factors and other conditions underlying net realizable value may change, resulting in further reserve
requirements. A reduction in the carrying amount of an inventory item from cost to market value creates a new cost basis for
the item that cannot be reversed at a later period. While we believe that adequate write-downs for inventory obsolescence have
been provided in the consolidated financial statements, consumer tastes and preferences will continue to change and we could
experience additional inventory write-downs in the future.
Rebates, discounts and other cash consideration received from a vendor related to inventory purchases are reflected as
reductions in the cost of the related inventory item, and are therefore reflected in the “Cost of Sales” line in our Consolidated
Statements of Operations when the related inventory item is sold.
Income Taxes
Deferred tax assets and liabilities are established for temporary differences between the financial reporting basis and the
income tax basis of our assets and liabilities, as well as for realizable operating loss and tax credit carryforwards, at tax rates in
effect for the years in which the differences are expected to reverse. Realization of deferred tax assets is dependent on future
taxable income in specific jurisdictions, the amount and timing of which are uncertain, and on possible changes in tax laws and
tax planning strategies. If in our judgment it appears that it is more likely than not that all or some portion of the asset will not
be realized, valuation allowances are established against our deferred tax assets, which increase income tax expense in the
period when such determination is made.
We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be
sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in
the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50%
likelihood of being realized upon ultimate resolution. These assessments of uncertain tax positions contain judgments related to
the interpretation of tax regulations in the jurisdictions in which we transact business. The judgments and estimates made at a
point in time may change based on the outcome of tax audits, expiration of statutes of limitations, as well as changes to, or
further interpretations of tax laws and regulations. Income tax expense is adjusted in our Consolidated Statements of Operations
in the period in which these events occur.
Trademarks and Other Identifiable Intangibles
Trademarks, license agreements, customer and distributor relationships and computer software are our primary
identifiable intangible assets. We amortize identifiable intangibles determined to have finite lives over their estimated useful
lives, and we do not amortize identifiable intangibles with indefinite lives. As of December 28, 2024, the net book value of
trademarks and other identifiable intangible assets was $886 million, of which we are amortizing a balance of $36 million. We
anticipate that our amortization expense for 2025 will be approximately $15 million.
We evaluate identifiable intangible assets subject to amortization for impairment if triggering events occur, such as
significant adverse changes in business climate, several periods of operating or cash flow losses, forecasted continued losses or
a current expectation that an intangible asset’s value will be eliminated prior to the end of its useful life. We estimate an
intangible asset’s useful life based on historical experience, the level of maintenance expenditures required to obtain future cash
flows, future business plans and the period over which the asset will be economically useful to us. Our policies require that we
periodically review our assets’ remaining depreciable lives based upon actual experience and expected future utilization. A
change in the depreciable life is treated as a change in accounting estimate and the accelerated amortization is accounted for in
the period of change and future periods.
We assess identifiable intangible assets not subject to amortization for impairment at least annually, as of the first day of
the third fiscal quarter, and additionally if triggering events occur. In order to determine the impairment of identifiable
intangible assets, we compare the fair value of the intangible asset to its carrying amount. Fair values of intangible assets are
primarily based on future cash flows projected to be generated from that asset. We recognize an impairment loss for the amount
by which an identifiable intangible asset’s carrying value exceeds its fair value.
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47
In connection with the annual intangible assets impairment analysis performed in the third quarter of 2024, we performed
a quantitative assessment utilizing an income approach to estimate the fair values of certain indefinite-lived intangible assets.
The most significant assumptions used to estimate the fair values of the indefinite-lived intangible assets included weighted
average cost of capital, revenue growth rate, terminal growth rate and operating profit margin rate. While the analysis indicated
that those indefinite-lived intangible assets had fair values that exceeded their carrying value, we noted a meaningful decline in
the fair value cushion above the carrying value for one of the indefinite-lived trademarks with the Australian business. The
decline in this trademark was driven by continued macroeconomic pressures impacting consumer spending in Australia and
resulting in a fair value that exceeded the carrying value by approximately 10% at the time the analysis was performed. As a
result, this trademark was considered to be at a higher risk for future impairment if economic conditions worsen or earnings and
operating cash flows do not recover as currently estimated by management. As of December 28, 2024, the carrying value of this
trademark was $218 million, which is reflected in the “Trademarks and other identifiable intangibles, net” line in the
Consolidated Balance Sheets. The results of our annual intangible assets impairment analysis are discussed in Note “Intangible
Assets and Goodwill” to our consolidated financial statements included in this Annual Report on Form 10-K.
Goodwill
As of December 28, 2024, we had $638 million of goodwill. We do not amortize goodwill, but we assess for impairment
at least annually and additionally if triggering events occur. The timing of our annual goodwill impairment analysis is the first
day of the third fiscal quarter. In evaluating the recoverability of goodwill, we estimate the fair value of our reporting units. We
rely on a number of factors to determine the fair value of our reporting units and evaluate various factors to discount anticipated
future cash flows, including operating results, business plans and present value techniques. As discussed above under
“Trademarks and Other Identifiable Intangibles,” there are inherent uncertainties related to these factors, and our judgment in
applying them and the assumptions underlying the impairment analysis may change in such a manner that impairment in value
may occur in the future. Such impairment will be recognized in the period in which it becomes known.
In connection with the annual goodwill impairment analysis performed in the third quarter of 2024, we performed a
quantitative assessment utilizing an income approach to estimate the fair value of each reporting unit. The most significant
assumptions used to estimate the fair values of the reporting units include the weighted average cost of capital, revenue growth
rate, terminal growth rate and operating profit margin rate. We completed our annual quantitative impairment analysis for each
reporting unit and the respective goodwill balances. The analysis indicated that all reporting units had fair values that exceeded
their carrying values by more than 20% at the time the analysis was performed. Although we determined that no impairment
existed for our goodwill as of the date the analysis was performed in the third quarter of 2024, these assets could be at risk for
future impairment due to changes in our business or global economic conditions. The results of our annual goodwill impairment
analysis are discussed in Note “Intangible Assets and Goodwill” to our consolidated financial statements included in this
Annual Report on Form 10-K.
Defined Benefit Pension Plans
For a discussion of our defined benefit pension plans and the related net periodic benefit cost, plan obligations, plan assets
and how we measure the amount of these costs, see Note “Defined Benefit Pension Plans” to our consolidated financial
statements included in this Annual Report on Form 10-K. The funded status of our defined benefit pension plans are recognized
on our balance sheet. Differences between actual results in a given year and the actuarially determined assumed results for that
year are deferred as unrecognized actuarial gains or losses in comprehensive income. We measure the funded status of our plans
as of the date of our fiscal year end.
The net periodic benefit cost of the pension plans is determined using projections and actuarial assumptions, the most
significant of which are the discount rate and the long-term rate of asset return. The net periodic pension income or expense is
recognized in the year incurred. Gains and losses, which occur when actual experience differs from actuarial assumptions, are
amortized over the average future expected life of participants. As benefits under the U.S. defined benefit pension plans, which
includes the Hanesbrands Inc. Legacy Pension Plan and the Hanesbrands Inc. Pension Plan (together, the “U.S. Pension
Plans”), are frozen, year over year fluctuations in our pension expense are not expected to have a material impact on our
Consolidated Statements of Operations.
Our policies regarding the establishment of pension assumptions are as follows:
•
Discount rate assumptions are generally based on yield curves applicable to each country and the expected cash
flows for each plan. For our U.S. Pension Plans, we use the full series of spot rates along the Aon AA-Only Above
Median Yield Curve and expected plan cash flows to determine liabilities and expense. Single equivalent discount
rates are shown for disclosure purposes.
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48
•
Salary increase assumptions, where applicable, are generally based on historical experience and management
expectations. This assumption is not applicable to the U.S. or Canada SERP as benefits under these plans are either
frozen or not tied to pay. The benefits under the U.S. Pension Plans were frozen as of December 31, 2005.
•
Long-term rate of return on plan assets assumptions, where applicable, are generally based on each plan’s
investment mix and forward-looking capital market assumptions applicable to each country. Expected returns also
reflect an incremental premium for actively managed investments and a reduction for trust-paid expenses. This
assumption is not applicable to unfunded plans.
•
Retirement and turnover assumptions are generally based on actual plan experience while standard actuarial
mortality tables applicable to each country are used to estimate life expectancy. For our U.S. Pension Plans, the 2024
mortality tables are from the Society of Actuaries’ Private Plan study published in 2019 (Pri-2012) projected
generationally with Scale MP-2021 and reflecting Aon’s Endemic scale adjustment, which increases the standard
mortality rates in the near term due to the impact of the pandemic in the U.S., scaling down each year to a permanent
slight increase to the standard mortality rates.
The sensitivity of changes in actuarial assumptions on our annual pension expense and on our plans’ benefit obligations,
all other factors being equal, is illustrated by the following:
Increase (Decrease) in
Pension
Expense
Benefit
Obligation
(in millions)
1% decrease in discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(1) $
75
1% increase in discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
(64)
1% decrease in expected investment return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
N/A
1% increase in expected investment return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7)
N/A
Recently Issued Accounting Pronouncements
For a summary of recently issued accounting pronouncements, see Note “Summary of Significant Accounting Policies” to
our consolidated financial statements included in this Annual Report on Form 10-K.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to market risk from changes in foreign exchange rates, interest rates and commodity prices. Our risk
management control system uses analytical techniques including market value, sensitivity analysis and value at risk estimations.
Foreign Exchange Rates
We sell the majority of our products in transactions denominated in U.S. dollars; however, we purchase some raw
materials, pay a portion of our wages and make other payments in our supply chain in foreign currencies. With our international
commercial presence, we also have foreign entities that purchase raw materials and finished goods in U.S. dollars. We are also
exposed to foreign exchange gains and losses resulting from the effect that fluctuations in foreign exchange rates have on the
reported results in our consolidated financial statements due to the translation of operating results and financial position of our
foreign subsidiaries. Our exposure to foreign exchange rates exists primarily with respect to the Australian dollar, the Canadian
dollar, the Mexican peso and the Argentinian peso against the U.S. dollar. We use forward foreign exchange contracts, and have
used cross-currency swap contracts and nonderivative financial instruments to hedge material exposure to adverse changes in
foreign exchange rates. A sensitivity analysis technique has been used to evaluate the effect that changes in the market value of
foreign exchange currencies will have on our forward foreign exchange contracts. At December 28, 2024, assuming a 10%
adverse change in the underlying currency price, the potential change in fair value of foreign currency derivative instruments
would be unfavorable by approximately $15 million.
Interest Rates
Our debt under the Revolving Loan Facility, the 2026 Term Loan A, the 2030 Term Loan B and the ARS Facility bears
interest at variable rates. As a result, we are exposed to changes in market interest rates that could impact the cost of servicing
our debt. Approximately 35% of our total debt outstanding at December 28, 2024 is at variable rates. A 25-basis point increase
in the annual interest rate charged on the outstanding debt balances as of December 28, 2024 would result in a change in annual
interest expense of approximately $2 million.
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49
Commodity Prices
We are exposed to commodity price fluctuations primarily as a result of the cost of materials that are used in our
manufacturing process. Cotton is the primary raw material used in manufacturing many of our products. Under our current
agreements with our primary yarn suppliers, we have the ability to periodically fix the cotton cost component of our yarn
purchases so that the suppliers bear the risk of cotton price fluctuation for the specified yarn volume and interim fluctuations in
the price of cotton do not impact our costs. However, our business can be affected by sustained dramatic movements in cotton
prices.
In addition, fluctuations in crude oil or petroleum prices may influence the prices of other raw materials we use to
manufacture our products, such as chemicals, dyestuffs, polyester yarn and foam, as well as affect our transportation and utility
costs. We generally purchase raw materials at market prices.
Item 8.
Financial Statements and Supplementary Data
Our consolidated financial statements required by this item are contained on pages F-1 through F-66 of this Annual
Report on Form 10-K. See Item 15(a)(1) for a listing of consolidated financial statements provided.
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
As required by Rule 13a-15(b) under the Exchange Act, our management, including our Chief Executive Officer and
Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures, as defined in
Exchange Act Rule 13a-15(e), as of the end of the period covered by this report. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the
reports that it files or submits under the Exchange Act is accumulated and communicated to the Company's management,
including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required
disclosure. Based on their evaluation of our disclosure controls and procedures as of December 28, 2024, our Chief Executive
Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective.
Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as
defined in Exchange Act Rule 13a-15(f). Management’s annual report on internal control over financial reporting and the report
of independent registered public accounting firm are incorporated by reference to pages F-2 and F-3 of this Annual Report on
Form 10-K.
Changes in Internal Control over Financial Reporting
In connection with the evaluation required by Exchange Act Rule 13a-15(d), our management, including our Chief
Executive Officer and Chief Financial Officer, concluded that no changes in our internal control over financial reporting
occurred during the quarter ended December 28, 2024 that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.
Item 9B.
Other Information
None of our directors or officers adopted, modified or terminated a Rule 10b5-1 trading arrangement or a non-Rule
10b5-1 trading arrangement during the quarter ended December 28, 2024.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
None.
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50
PART III
Item 10.
Directors, Executive Officers and Corporate Governance
The Company has adopted an insider trading policy governing certain activities with respect to the Company’s securities
that applies to the Company’s directors, officers, employees, and other covered persons. The Company also follows procedures
for the repurchase of its securities. The Company believes that its insider trading policy and repurchase procedures are
reasonably designed to promote compliance with insider trading laws, rules and regulations, and listing standards applicable to
the Company. A copy of the Company’s insider trading policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K.
The material under the heading “Proposal 1 - Election of Directors: Nominees for Election as Directors for a One-Year
Term Expiring in 2025,” “Corporate Governance: Director Nomination Process,” “Corporate Governance: Board Structure and
Processes” and “Corporate Governance: Other Governance Information,” each as included and to be filed in the Company’s
definitive Proxy Statement for the 2025 Annual Meeting of Stockholders (the “2025 Proxy Statement”), is incorporated by
reference herein in response to this Item.
The chart below lists our executive officers and is followed by biographical information about them. Each of our
executive officers is elected annually by the Board of Directors to serve until his or her successor is elected and qualifies or
until his or her death, resignation or removal. No family relationship exists between any of our directors or executive officers.
Name
Age
Positions
Stephen B. Bratspies . . . . . . . . . . . . .
57
Chief Executive Officer
M. Scott Lewis(1) . . . . . . . . . . . . . . . .
54
Chief Financial Officer and Chief Accounting Officer
Joseph W. Cavaliere . . . . . . . . . . . . . .
62
President, Innerwear - Global
Michael E. Faircloth . . . . . . . . . . . . . .
59
EVP, President, Global Operations
Kristin L. Oliver . . . . . . . . . . . . . . . . .
52
EVP, Chief Human Resources Officer and Chief Legal Officer
Scott A. Pleiman . . . . . . . . . . . . . . . . .
54
EVP, Chief Strategy, Transformation, Analytics & Technology Officer
(1)
As previously disclosed, Mr. Lewis was appointed as Chief Financial Officer and principal financial officer of the Company effective
July 11, 2023. Mr. Lewis also continues to serve as Chief Accounting Officer and principal accounting officer of the Company.
Stephen B. Bratspies has served as our Chief Executive Officer since August 2020. Immediately prior to joining the
Company, Mr. Bratspies served as Chief Merchandising Officer since 2015 for Walmart, a publicly traded multinational retail
company that operates a chain of supercenters, discount stores, grocery stores and warehouse clubs. He served in various
capacities at Walmart since 2005, including as Executive Vice President, Food from 2014 to 2015 and as Executive Vice
President, General Merchandise from 2013 to 2014.
M. Scott Lewis has served as our Chief Financial Officer and Chief Accounting Officer since July 2023, served as our
Chief Accounting Officer and Controller since 2015 and served as our Interim Chief Financial Officer from January 2020 to
May 2021 and from March 2023 to June 2023. Mr. Lewis joined the Company in 2006 as Director, External Reporting and was
promoted in 2011 to Vice President, External Reporting, promoted in 2013 to Vice President, Financial Reporting and
Accounting, and promoted in December 2013 to Vice President, Tax. Prior to joining the Company, Mr. Lewis served as senior
manager with the accounting, audit and tax consulting firm KPMG.
Joseph W. Cavaliere has served as our President, Innerwear - Global since February 2021. Mr. Cavaliere joined the
Company from C&S Wholesale Grocers, a wholesale grocery supply company, where he was President and General Manager
of the Company’s retail chain division during 2020 and Chief Commercial Officer from 2018 to 2020. Prior to C&S Wholesale
Grocers, he served as President and Transformation Lead at Newell Brands Inc., a global consumer products company, from
2017 to 2018 and as President and Chief Customer Officer from 2012 to 2017. Before that, Mr. Cavaliere was Executive Vice
President of Customer Development at Unilever PLC, a multinational consumer goods company from 2008 to 2012 and was
Senior Vice President from 2005 to 2008. He also served as Executive Vice President of Sales at Kraft Foods from 2002 to
2005, and held a number of other leadership positions in more than 20 years with the Company.
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51
Michael E. Faircloth has served as our EVP, President, Global Operations since July 2024 and served as EVP, Supply
Chain - Global from 2019 until 2024. He has served in a variety of roles with the Company, including as our Group President,
Global Operations, American Casualwear and E-Commerce from 2019 to 2020, as our Group President, Global Supply Chain,
Information Technology and E-Commerce from 2018 to 2019, as our President, Chief Global Supply Chain and Information
Technology Officer from 2014 to 2017 and as our Chief Global Operations Officer (a position previously known as President,
Chief Global Supply Chain Officer) from 2010 to 2014. Prior to his appointment as Chief Global Operations Officer,
Mr. Faircloth served as our Senior Vice President, Supply Chain Support from 2009 to 2010, as our Vice President, Supply
Chain Support from March 2009 to September 2009 and as our Vice President of Engineering & Quality from 2006 to 2009.
Prior to the completion of the Company’s spin off from Sara Lee Corporation (“Sara Lee”), Mr. Faircloth served as Vice
President, Industrialization of Sara Lee.
Kristin L. Oliver has served as our EVP, Chief Human Resources Officer since September 2020, our Chief Legal Officer
since January 2025 and served as our Interim Chief Legal Officer from December 2023 to January 2025. From 2018 to 2020,
Ms. Oliver served as Senior Vice President and Chief Human Resources Officer at Walgreens, a retail pharmacy leader and a
division of Walgreens Boots Alliance, Inc. From 2016 to 2018, she served as Executive Vice President and Chief Human
Resources Officer at Chico’s FAS, Inc., a publicly traded women’s clothing and accessories retailer. Previously in her career,
Ms. Oliver served in various roles at Walmart, including as Executive Vice President, Walmart US, People division from 2013
to 2015, Senior Vice President and head of Human Resources, International Division from 2010 to 2012, Vice President and
Division General Counsel, Employment from 2008 to 2010 and Associate General Counsel from 2004 to 2009.
Scott A. Pleiman has served as our EVP, Chief Strategy, Transformation, Analytics & Technology Officer since January
2025 and as EVP, Chief Strategy and Transformation Officer from January 2023 to January 2025. Mr. Pleiman joined the
Company from Boston Consulting Group, where he was a senior advisor regarding strategy and transformation, specializing in
retail and consumer products industries. Prior to joining Boston Consulting Group, Mr. Pleiman held a number of senior
leadership positions at Walmart Stores, Inc., including Executive Vice President, Merchandising Operations from 2017 to 2021,
Senior Vice President, Merchandising – Pricing, Planning & Modular Development from 2015 to 2017, Senior Vice President,
Finance & Strategy from 2009 to 2015, Vice President, Merchandising Finance and Business Strategy Walmart U.S. from 2007
to 2009, and Vice President, Business Strategy Walmart U.S. from 2005 to 2007. Earlier in his career, Mr. Pleiman held
strategic consulting roles with Cap Gemini (formerly Ernst & Young Consulting Services), and accounting roles at Ernst &
Young Audit and Advisory Business Services.
Item 11.
Executive Compensation
The material under the heading “Proposal 3 - Advisory Vote to Approve Named Executive Officer Compensation,” as
included and to be filed in the 2025 Proxy Statement, is incorporated by reference herein in response to this Item.
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The material under the heading “Equity Compensation Plan Information” as included in Item 5 of this Annual Report on
Form 10-K and the material under the heading “Ownership of Our Stock: Share Ownership of Major Stockholders,
Management and Directors” as included and to be filed in the 2025 Proxy Statement is incorporated by reference herein in
response to this Item.
Item 13.
Certain Relationships and Related Transactions, and Director Independence
The material under the heading “Corporate Governance: Other Governance Information” and “Corporate Governance:
Director Nomination Process,” each as included and to be filed in the 2025 Proxy Statement, is incorporated by reference herein
in response to this Item.
Item 14.
Principal Accountant Fees and Services
The material under the heading “Proposal 2 - Ratification of Appointment of Independent Registered Public Accounting
Firm: Relationship with Independent Registered Public Accounting Firm” as included and to be filed in the 2025 Proxy
Statement is incorporated by reference herein in response to this Item.
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52
PART IV
Item 15.
Exhibits and Financial Statement Schedules
(a)(1) Financial Statements
The financial statements listed in the accompanying Index to Consolidated Financial Statements on page F-1 are filed as
part of this Annual Report on Form 10-K.
(a)(3) Exhibits
2.1
Stock and Asset Purchase Agreement, dated as of June 4, 2024, by and among Hanesbrands
Inc., ABG-Sparrow IPCo LLC, and, solely for purposes of Section 11.17, Authentic Brands
Group LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on
Form 8-K filed with the Securities and Exchange Commission on June 6, 2024).**
2.2
First Amendment to Stock and Asset Purchase Agreement, dated as of September 25, 2024,
between Hanesbrands Inc. and ABG-Champion LLC (f/k/a ABG-Sparrow IPCo LLC)
(incorporated by reference to Exhibit 2.2 to the Registrant’s Quarterly Report on Form 10-Q
filed with the Securities and Exchange Commission on November 7, 2024).
3.1
Articles of Amendment and Restatement of Hanesbrands Inc. (incorporated by reference
from Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Securities
and Exchange Commission on September 5, 2006).
3.2
Articles Supplementary (Junior Participating Preferred Stock, Series A) (incorporated by
reference from Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed with the
Securities and Exchange Commission on September 5, 2006).
3.3
Articles of Amendment to Articles of Amendment and Restatement of Hanesbrands Inc.
(incorporated by reference from Exhibit 3.1 to the Registrant’s Current Report on Form 8-K
filed with the Securities and Exchange Commission on January 28, 2015).
3.4
Articles Supplementary (Reclassifying Junior Participating Preferred Stock, Series A)
(incorporated by reference from Exhibit 3.1 to the Registrant’s Current Report on Form 8-K
filed with the Securities and Exchange Commission on November 2, 2015).
3.5
Amended and Restated Bylaws of Hanesbrands Inc. as amended on September 29, 2022
(incorporated by reference from Exhibit 3.1 to the Registrant’s Current Report on Form 8-K
filed with the Securities and Exchange Commission on September 30, 2022).
4.1
Description of Securities (incorporated by reference from Exhibit 4.1 to the Registrant’s
Annual Report on Form 10-K filed with the Securities and Exchange Commission on.
February 12, 2021).
4.2
Indenture, dated May 6, 2016, among Hanesbrands Inc., the subsidiary guarantors named
therein and U.S. Bank National Association (incorporated by reference from Exhibit 4.2 to
the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange
Commission on May 6, 2016).
4.3
Form of 4.875% Senior Notes due 2026 (incorporated by reference from Exhibit 4.3 to the
Registrant’s Current Report on Form 8-K filed with the Securities and Exchange
Commission on May 6, 2016).
4.4
Indenture, dated February 14, 2023, among Hanesbrands Inc., the guarantors named therein,
and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference
from Exhibit 4.1 to the Registrant's Current Report on Form 8-K filed with the Securities and
Exchange Commission on February 14, 2023).
4.5
Form of 9.000% Senior Notes due 2031 (incorporated by reference from Exhibit 4.2 to the
Registrant's Current Report on Form 8-K filed with the Securities and Exchange
Commission on February 14, 2023).
10.1
Hanesbrands Inc. 2020 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1 to
the Registrant’s Current Report on Form 8-K filed with the Securities Exchange Commission
on April 29, 2020).*
Exhibit
Number
Description
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53
10.2
Form of Calendar Year Grant Restricted Stock Unit Grant Notice and Agreement under the
Hanesbrands Inc. 2020 Omnibus Incentive Plan (incorporated by reference from Exhibit 10.2
to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange
Commission on February 16,2024).*
10.3
Form of Discretionary Grant Restricted Stock Unit Grant Notice and Agreement under the
Hanesbrands Inc. 2020 Omnibus Incentive Plan (incorporated by reference from Exhibit 10.3
to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange
Commission on February 16, 2024).*
10.4
Form of Performance Stock Award Grant Notice and Agreement under the Hanesbrands Inc.
2020 Omnibus Incentive Plan (incorporated by reference from Exhibit 10.4 to the
Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange
Commission on February 16, 2024).*
10.5
Form of Non-Employee Director Restricted Stock Unit Grant Notice and Agreement under
the Hanesbrands Inc. 2020 Omnibus Incentive Plan (incorporated by reference from Exhibit
10.5 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange
Commission on February 16, 2024).*
10.6
Inducement Stock Option Grant Notice and Agreement with Stephen B. Bratspies
(incorporated by reference to Exhibit 4.8 to the Registrant’s Registration Statement on Form
S-8 (Commission file number 333-240312) filed with the Securities and Exchange
Commission on August 3, 2020).*
10.7
Hanesbrands Inc. Supplemental Employee Retirement Plan (incorporated by reference from
Exhibit 10.8 to the Registrant’s Annual Report on Form 10-K filed with the Securities and
Exchange Commission on February 9, 2010).*
10.8
Hanesbrands Inc. Annual Incentive Plan for Section 16 Officers (incorporated by reference
from Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities
and Exchange Commission on January 30, 2020).*
10.9
Hanesbrands Inc. Executive Deferred Compensation Plan, as amended (incorporated by
reference from Exhibit 10.11 to the Registrant’s Annual Report on Form 10-K filed with the
Securities and Exchange Commission on February 6, 2014).*
10.10
First Amendment to Hanesbrands Inc. Executive Deferred Compensation Plan, as amended
(incorporated by reference from Exhibit 10.16 to the Registrant’s Annual Report on Form
10-K filed with the Securities and Exchange Commission on February 11, 2019).*
10.11
Second Amendment to Hanesbrands Inc. Executive Deferred Compensation Plan, as
amended (incorporated by reference from Exhibit 10.17 to the Registrant’s Annual Report on
Form 10-K filed with the Securities and Exchange Commission on February 11, 2019).*
10.12
Hanesbrands Inc. Executive Life Insurance Plan (incorporated by reference from Exhibit
10.10 to the Registrant’s Annual Report on Form 10-K filed with the Securities and
Exchange Commission on February 11, 2009).*
10.13
Hanesbrands Inc. Executive Long-Term Disability Plan (incorporated by reference from
Exhibit 10.11 to the Registrant’s Annual Report on Form 10-K filed with the Securities and
Exchange Commission on February 11, 2009).*
10.14
Hanesbrands Inc. Employee Stock Purchase Plan (As Amended and Restated as of 2014)
(incorporated by reference from Exhibit 10.14 to the Registrant’s Annual Report on Form
10-K filed with the Securities and Exchange Commission on February 16, 2024).*
10.15
Hanesbrands Inc. Non-Employee Director Deferred Compensation Plan (incorporated by
reference from Exhibit 10.13 to the Registrant’s Annual Report on Form 10-K filed with the
Securities and Exchange Commission on February 11, 2009).*
10.16
First Amendment to Hanesbrands Inc. Non-Employee Director Deferred Compensation Plan
(incorporated by reference from Exhibit 99.3 to the Registrant’s Registration Statement on
Form S-8 filed with the Securities and Exchange Commission on November 4, 2016).*
10.17
Second Amendment to Hanesbrands Inc. Non-Employee Director Deferred Compensation
Plan (incorporated by reference from Exhibit 10.23 to the Registrant’s Annual Report on
Form 10-K filed with the Securities and exchange Commission on February 11, 2019).*
Exhibit
Number
Description
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54
10.18
Form of Severance/Change in Control Agreement entered into by and between Hanesbrands
Inc. and certain of its executive officers and schedule of all such agreements with current
executive officers.*
10.19
Severance/Change in Control Agreement dated August 3, 2020 between Hanesbrands Inc.
and Stephen B. Bratspies (incorporated by reference from Exhibit 10.38 to the Registrant's
Annual Report on Form 10-K filed with the Securities and Exchange Commission on
February 12, 2021).*
10.20
Fifth Amended and Restated Credit Agreement (the “Fifth Amended Credit Agreement”) by
and among Hanesbrands Inc., MFB International Holdings S.à r.l., HBI Holdings Australasia
Pty Ltd (f/k/a HBI Australia Acquisition Co. Pty Ltd.) and the various financial institutions
from time to time party to the Fifth Amended Credit Agreement as lenders, Bank of
America, N.A., Barclays Bank PLC, HSBC Bank USA, N.A., PNC Bank, National
Association, Truist Bank, N.A. and Wells Fargo Bank, N.A., as the co-syndication agents,
Fifth Third Bank, National Association, The Bank of Nova Scotia, MUFG Securities
Americas Inc. and Goldman Sachs Bank USA, as the co-documentation agents, JPMorgan
Chase Bank, N.A., as the administrative agent and the collateral agent, and JPMorgan Chase
Bank, N.A., BOFA Securities, Inc., Barclays Bank PLC, HSBC Securities (USA) Inc., PNC
Capital Markets LLC, Truist Securities Inc., and Wells Fargo Securities, LLC, as the joint
lead arrangers and joint bookrunners (incorporated by reference to Exhibit 10.1 to the
Registrant’s Current Report on Form 8-K filed with the Securities and Exchange
Commission on November 23, 2021).
10.21
First Amendment, dated October 31, 2022, to the Fifth Amended and Restated Credit
Agreement among Hanesbrands Inc., MFB International Holdings S.à r.l., HBI Australia
Acquisition Co. Pty Ltd, the lenders party thereto from time to time and JPMorgan Chase
Bank N.A., as the administrative agent and the collateral agent (incorporated by reference
from Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed with the
Securities and Exchange Commission on November 9, 2022).
10.22
Second Amendment, dated November 4, 2022, to the Fifth Amended and Restated Credit
Agreement among Hanesbrands Inc., MFB International Holdings S.à r.l., HBI Australia
Acquisition Co. Pty Ltd, the lenders party thereto from time to time and JPMorgan Chase
Bank N.A., as the administrative agent and the collateral agent (incorporated by reference
from Exhibit 10.2 to the Registrant’s Quarterly report on Form 10-Q filed with the Securities
and Exchange Commission on November 9, 2022).
10.23
Third Amendment to Hanesbrands Inc. Non-Employee Director Deferred Compensation
Plan (incorporated by reference from Exhibit 10.35 to the Registrant's Annual Report on
Form 10-K filed with the Securities and Exchange Commission on February 8, 2023).*
10.24
Fourth Amendment to Hanesbrands Inc. Non-Employee Director Deferred Compensation
Plan (incorporated by reference from Exhibit 10.36 to the Registrant's Annual Report on
Form 10-K filed with the Securities and Exchange Commission on February 8, 2023).*
10.25
Hanesbrands Inc. Legacy Pension Plan (incorporated by reference from Exhibit 10.37 to the
Registrant's Annual Report on Form 10-K filed with the Securities and Exchange
Commission on February 8, 2023).*
10.26
Master Receivables Purchase Agreement, dated as of December 11, 2019, by and among
Hanesbrands Inc., Knights Apparel LLC, GFSI LLC, CC Products LLC, Alternative
Apparel, Inc., the other sellers and servicers from time to time party thereto, and MUFG
Bank, LTD., as Buyer (incorporated by reference from Exhibit 10.38 to the Registrant's
Annual Report on Form 10-K filed with the Securities and Exchange Commission on
February 8, 2023).
10.27
Amendment No. 1, dated as of June 19, 2020, to Master Receivables Purchase Agreement,
by and among Hanesbrands Inc., Knights Apparel LLC, GFSI LLC, CC Products LLC,
Alternative Apparel, Inc. and MUFG Bank, LTD (incorporated by reference from Exhibit
10.39 to the Registrant's Annual Report on Form 10-K filed with the Securities and
Exchange Commission on February 8, 2023).
10.28
Amendment No. 2, dated as of December 2, 2022, to Master Receivables Purchase
Agreement, by and among Hanesbrands Inc., Knights Apparel LLC, GFSI LLC, CC
Products LLC, Alternative Apparel, Inc. and MUFG Bank, LTD (incorporated by reference
from Exhibit 10.40 to the Registrant's Annual Report on Form 10-K filed with the Securities
and Exchange Commission on February 8, 2023).
Exhibit
Number
Description
Table of Contents
55
10.29
Retention Award Agreement with M. Scott Lewis (incorporated by reference from Exhibit
10.41 to the Registrant's Annual Report on Form 10-K filed with the Securities and
Exchange Commission on February 8, 2023).*
10.30
Purchase Agreement, dated February 10, 2023 among Hanesbrands Inc., the guarantors
named therein and J.P. Morgan Securities LLC, as representative of the several initial
purchasers named therein (incorporated by reference to Exhibit 1.1 to the Registrant's
Current Report on Form 8-K filed with the Securities and Exchange Commission on
February 14, 2023).
10.31
Third Amendment, dated as of February 1, 2023, to the Fifth Amended and Restated Credit
Agreement among Hanesbrands Inc., MFB International Holdings S.à r.l., HBI Australia
Acquisition Co. Pty Ltd, the lenders party thereto and JPMorgan Chase Bank N.A., as the
administrative agent and the collateral agent (incorporated by reference to Exhibit 10.1 to the
Registrant's Quarterly Report on Form 10-Q filed with the Securities and Exchange
Commission on May 3, 2023).
10.32
Fourth Amendment, dated as of November 8, 2023, to the Fifth Amended and Restated
Credit Agreement among Hanesbrands Inc., MFB International Holdings S.à r.l., HBI
Australia Acquisition Co. Pty Ltd, the lenders party thereto and JPMorgan Chase Bank N.A.,
as the administrative agent and the collateral agent (incorporated by reference to Exhibit
10.32 to the Registrant’s Annual Report on Form 10-K filed with the Securities and
Exchange Commission on February 16, 2024).
10.33
First Incremental Amendment and Joinder Agreement, dated as of March 8, 2023, to the
Fifth Amended and Restated Credit Agreement among Hanesbrands Inc., MFB International
Holdings S.à r.l., HBI Australia Acquisition Co. Pty Ltd, the lenders party thereto and
JPMorgan Chase Bank N.A., as the administrative agent and the collateral agent
(incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K
filed with the Securities and Exchange Commission on March 13, 2023).
10.34
Amendment No. 3, dated as of June 22, 2023, to Master Receivables Purchase Agreement,
by and among Hanesbrands Inc., Knights Apparel LLC, GFSI LLC, CC Products LLC,
Alternative Apparel, Inc. and MUFG Bank, LTD (incorporated by reference to Exhibit 10.1
to the Registrant's Quarterly Report on Form 10-Q filed with the Securities and Exchange
Commission on August 10, 2023).
10.35
First Amendment of Hanesbrands Inc. 2020 Omnibus Incentive Plan (incorporated by
reference from Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the
Securities and Exchange Commission on April 27, 2023).*
10.36
Australia Addendum to Hanesbrands Inc. 2020 Omnibus Incentive Plan (incorporated by
reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q filed with the
Securities and Exchange Commission on November 9, 2023).*
10.37
Cooperation Agreement, dated as of November 16, 2023, by and among Hanesbrands Inc.,
Barington Companies Equity Partners, L.P., Barington Capital Group, L.P., Barington
Companies Management, LLC and James A. Mitarotonda (incorporated by reference to
Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Securities and
Exchange Commission on November 16, 2023).
10.38
First Amendment dated October 11, 2024, to Cooperation Agreement by and among
Hanesbrands Inc., Barington Companies Equity Partners, L.P., Barington Capital Group,
L.P., Barington Companies Management, LLC, and James A. Mitarotonda.
10.39
Transaction Incentive Agreement, dated June 4, 2024, by and among Hanesbrands Inc. and
Vanessa LeFebvre (incorporated by reference to Exhibit 10.2 to the Registrant’s Current
Report on Form 8-K filed with the Securities and Exchange Commission on June 6, 2024).*
10.40
Form of Restricted Stock Unit Grant Notice and Agreement under the Hanesbrands Inc.
2020 Omnibus Incentive Plan (As Amended) (incorporated by reference to Exhibit 10.1 to
the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange
Commission on May 9, 2024).*
10.41
Form of Discretionary Restricted Stock Unit Grant Notice and Agreement under the
Hanesbrands Inc. 2020 Omnibus Incentive Plan (As Amended) (incorporated by reference to
Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and
Exchange Commission on May 9, 2024).*
Exhibit
Number
Description
Table of Contents
56
10.42
Form of Performance Stock Unit Grant Notice and Agreement under the Hanesbrands Inc.
2020 Omnibus Incentive Plan (As Amended) (incorporated by reference to Exhibit 10.3 to
the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange
Commission on May 9, 2024).*
10.43
Amendment No. 4, dated as of June 6, 2024, to Master Receivables Purchase Agreement, by
and among Hanesbrands Inc., Knights Apparel LLC, GFSI LLC, CC Products LLC,
Alternative Apparel, Inc. and MUFG Bank, LTD.
19.1
Hanesbrands Inc. Insider Trading Policy, effective July 1, 2023
21.1
Subsidiaries of the Registrant.
23.1
Consent of PricewaterhouseCoopers LLP.
24.1
Powers of Attorney (included on the signature pages hereto).
31.1
Certification of Stephen B. Bratspies, Chief Executive Officer.
31.2
Certification of M. Scott Lewis, Chief Financial Officer.
32.1
Section 1350 Certification of Stephen B. Bratspies, Chief Executive Officer.
32.2
Section 1350 Certification of M. Scott Lewis, Chief Financial Officer.
97.1
Hanesbrands Inc. Executive Compensation Clawback Policy (incorporated by reference from
Exhibit 97.1 to the Registrant’s Annual Report on Form 10-K filed with the Securities and
Exchange Commission on February 16, 2024).*
101.INS XBRL
Instance Document - the instance document does not appear in the Interactive Data file
because its XBRL tags are embedded within the Inline XBRL document
101.SCH XBRL
Taxonomy Extension Schema Document
101.CAL XBRL
Taxonomy Extension Calculation Linkbase Document
101.LAB XBRL
Taxonomy Extension Label Linkbase Document
101.PRE XBRL
Taxonomy Extension Presentation Linkbase Document
101.DEF XBRL
Taxonomy Extension Definition Linkbase Document
104
Cover Page Interactive Data File (embedded within the Inline XBRL document and
contained in Exhibit 101)
Exhibit
Number
Description
*
Management contract or compensatory plans or arrangements.
**
Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees
to furnish supplementally to the U.S. Securities and Exchange Commission a copy of any omitted schedule or exhibit
upon request.
Item 16.
Form 10-K Summary
Not applicable.
Table of Contents
57
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused
this Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, on February 14, 2025.
HANESBRANDS INC.
/s/ Stephen B. Bratspies
Stephen B. Bratspies
Chief Executive Officer
Table of Contents
58
POWER OF ATTORNEY
KNOW BY ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and
appoints jointly and severally, Stephen B. Bratspies, M. Scott Lewis and Kristin Oliver, and each one of them, his or her
attorneys-in-fact, each with the power of substitution, for him or her in any and all capacities, to sign any and all amendments to
this Annual Report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with
the Securities and Exchange Commission, hereby ratifying and confirming all that each said attorneys-in-fact, or his or her
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed
below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
Signature
Capacity
Date
/s/ Stephen B. Bratspies
Chief Executive Officer
(principal executive officer)
February 14, 2025
Stephen B. Bratspies
/s/ M. Scott Lewis
Chief Financial Officer and Chief Accounting
Officer
(principal financial officer and principal
accounting officer)
February 14, 2025
M. Scott Lewis
/s/ Geralyn R. Breig
Director
February 14, 2025
Geralyn R. Breig
/s/ Colin Browne
Director
February 14, 2025
Colin Browne
/s/ Natasha C. Chand
Director
February 14, 2025
Natasha C. Chand
/s/ Sharilyn S. Gasaway
Director
February 14, 2025
Sharilyn S. Gasaway
/s/ Mark A. Irvin
Director
February 14, 2025
Mark A. Irvin
/s/ James C. Johnson
Director
February 14, 2025
James C. Johnson
/s/ John G. Mehas
Director
February 14, 2025
John G. Mehas
/s/ Franck J. Moison
Director
February 14, 2025
Franck J. Moison
/s/ Robert F. Moran
Director
February 14, 2025
Robert F. Moran
/s/ William S. Simon
Director
February 14, 2025
William S. Simon
Table of Contents
59
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
HANESBRANDS INC.
Consolidated Financial Statements:
Page
Management’s Report on Internal Control Over Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-2
Report of Independent Registered Public Accounting Firm (PCAOB ID 238) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-3
Consolidated Statements of Operations for the years ended December 28, 2024, December 30, 2023 and December
31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-5
Consolidated Statements of Comprehensive Income (Loss) for the years ended December 28, 2024, December 30,
2023 and December 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-6
Consolidated Balance Sheets at December 28, 2024 and December 30, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-7
Consolidated Statements of Stockholders’ Equity for the years ended December 28, 2024, December 30, 2023 and
December 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-8
Consolidated Statements of Cash Flows for the years ended December 30, 2023, December 31, 2022 and January 1,
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-9
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-10
Table of Contents
F-1
Hanesbrands Inc.
Management’s Report on Internal Control Over Financial Reporting
Management of Hanesbrands Inc. (“Hanesbrands”) is responsible for establishing and maintaining adequate internal
control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. Internal control over financial reporting is
a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with accounting principles generally accepted. Hanesbrands’ internal
control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of Hanesbrands; (ii) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with accounting principles generally accepted in the United States, and that receipts and expenditures of Hanesbrands are being
made only in accordance with authorizations of management and directors of Hanesbrands; and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of Hanesbrands’ assets that
could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Management
has evaluated the effectiveness of Hanesbrands’ internal control over financial reporting as of December 28, 2024, based upon
criteria for effective internal control over financial reporting described in Internal Control — Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on this evaluation,
management concluded that Hanesbrands’ internal control over financial reporting was effective as of December 28, 2024.
The effectiveness of our internal control over financial reporting as of December 28, 2024 has been audited by
PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report, which is included on
the following pages.
Table of Contents
F-2
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of Hanesbrands Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Hanesbrands Inc. and its subsidiaries (the "Company")
as of December 28, 2024 and December 30, 2023, and the related consolidated statements of operations, of comprehensive
income (loss), of stockholders’ equity and of cash flows for each of the three years in the period ended December 28, 2024,
including the related notes (collectively referred to as the "consolidated financial statements"). We also have audited the
Company's internal control over financial reporting as of December 28, 2024, based on criteria established in Internal Control -
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of the Company as of December 28, 2024 and December 30, 2023, and the results of its operations and its cash flows
for each of the three years in the period ended December 28, 2024 in conformity with accounting principles generally accepted
in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal
control over financial reporting as of December 28, 2024, based on criteria established in Internal Control - Integrated
Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal
control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included
in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express
opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting
based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United
States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material
misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in
all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to
those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of
internal control over financial reporting included obtaining an understanding of internal control over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal
control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the
circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Table of Contents
F-3
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated
financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to
accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging,
subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the
consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below,
providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Goodwill and Indefinite-Lived Intangible Asset Impairment Assessments – A Certain Reporting Unit in the International
Segment and Certain Indefinite-Lived Trademarks in the U.S. and International Segments
As described in Notes 2 and 11 to the consolidated financial statements, the Company’s consolidated goodwill and
indefinite-lived trademarks balances were $638 million and $850 million, respectively, as of December 28, 2024, of which a
portion of the consolidated goodwill balance relates to a certain reporting unit in the International segment and a significant
portion of the consolidated indefinite-lived trademarks balance relates to certain indefinite-lived trademarks in the U.S. and
International segments. Goodwill and identifiable intangible assets not subject to amortization are assessed for impairment at
least annually, as of the first day of the Company’s third fiscal quarter, and additionally if triggering events occur. Management
estimates the fair value of the Company’s reporting units or intangible assets, which is determined using the income approach,
and compares the fair value to the carrying value. If the carrying value exceeds fair value, an impairment loss is recognized in
an amount equal to such excess. Fair values of reporting units and intangible assets are primarily based on future cash flows
projected to be generated from that business or asset. In performing the discounted cash flow analysis, management makes
various judgments, estimates and assumptions, the most significant of which are the assumptions related to the weighted
average cost of capital, revenue growth rate, terminal growth rate, and operating profit margin rate.
The principal considerations for our determination that performing procedures relating to the goodwill and indefinite-lived
intangible asset impairment assessments of a certain reporting unit in the International segment and certain indefinite-lived
trademarks in the U.S. and International segments is a critical audit matter are (i) the significant judgment by management when
developing the fair value estimates of a certain reporting unit in the International segment and certain indefinite-lived
trademarks in the U.S. and International segments; (ii) a high degree of auditor judgment, subjectivity, and effort in performing
procedures and evaluating management’s significant assumptions related to revenue growth rates and operating profit margin
rates for a certain reporting unit in the International segment and a certain indefinite-lived trademark in the U.S. segment, and
the weighted average cost of capital, revenue growth rates, operating profit margin rates, and terminal growth rate for a certain
indefinite-lived trademark in the International segment; and (iii) the audit effort involved the use of professionals with
specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our
overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating
to management’s goodwill and indefinite-lived intangible asset impairment assessments, including controls over the valuation
of a certain reporting unit in the International segment and certain indefinite-lived trademarks in the U.S. and International
segments. These procedures also included, among others (i) testing management’s process for developing the fair value
estimates of a certain reporting unit in the International segment and certain indefinite-lived trademarks in the U.S. and
International segments; (ii) evaluating the appropriateness of the discounted cash flow analyses used by management; (iii)
testing the completeness and accuracy of underlying data used in the discounted cash flow analyses; and (iv) evaluating the
reasonableness of the significant assumptions used by management related to revenue growth rates and operating profit margin
rates for a certain reporting unit in the International segment and a certain indefinite-lived trademark in the U.S. segment, and
the weighted average cost of capital, revenue growth rates, operating profit margin rates, and terminal growth rate for a certain
indefinite-lived trademark in the International segment. Evaluating management’s assumptions related to revenue growth rates
and operating profit margin rates involved evaluating whether the assumptions were reasonable considering (i) the current and
past performance of a certain reporting unit and branded products associated with certain indefinite-lived trademarks; (ii) the
consistency with external market and industry data; and (iii) whether these assumptions were consistent with evidence obtained
in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in the evaluation of the
reasonableness of the weighted average cost of capital and terminal growth rate assumptions for a certain indefinite-lived
trademark in the International segment.
/s/ PricewaterhouseCoopers LLP
Greensboro, North Carolina
February 14, 2025
We have served as the Company’s auditor since 2006.
Table of Contents
F-4
HANESBRANDS INC.
Consolidated Statements of Operations
(in thousands, except per share data)
Years Ended
December 28,
2024
December 30,
2023
December 31,
2022
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
3,507,438 $
3,639,386 $
3,862,809
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,147,914
2,347,496
2,515,774
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,359,524
1,291,890
1,347,035
Selling, general and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . .
1,173,576
1,025,612
1,079,664
Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
185,948
266,278
267,371
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
47,441
37,761
8,294
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
195,901
214,187
131,733
Income (loss) from continuing operations before income taxes . . . . . . . .
(57,394)
14,330
127,344
Income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
40,601
(14,818)
447,889
Income (loss) from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . .
(97,995)
29,148
(320,545)
Income (loss) from discontinued operations, net of tax . . . . . . . . . . . . . . . . .
(222,436)
(46,874)
193,341
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(320,431) $
(17,726) $
(127,204)
Earnings (loss) per share - basic:
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(0.28) $
0.08 $
(0.92)
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(0.63)
(0.13)
0.55
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(0.91) $
(0.05) $
(0.36)
Earnings (loss) per share - diluted:
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(0.28) $
0.08 $
(0.92)
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(0.63)
(0.13)
0.55
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(0.91) $
(0.05) $
(0.36)
Table of Contents
See accompanying notes to Consolidated Financial Statements.
F-5
HANESBRANDS INC.
Consolidated Statements of Comprehensive Income (Loss)
(in thousands)
Years Ended
December 28,
2024
December 30,
2023
December 31,
2022
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(320,431) $
(17,726) $
(127,204)
Other comprehensive income (loss):
Translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(120,824)
15,321
(94,802)
Unrealized gain (loss) on qualifying cash flow hedges, net of tax of
$(1,584), $1,430 and $(226), respectively . . . . . . . . . . . . . . . . . . . . . . .
6,978
(13,246)
3,239
Unrecognized income from pension and postretirement plans, net of tax
of $(379), $104 and $(650), respectively . . . . . . . . . . . . . . . . . . . . . . . .
28,935
17,622
131,158
Total other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(84,911)
19,697
39,595
Comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(405,342) $
1,971 $
(87,609)
Table of Contents
See accompanying notes to Consolidated Financial Statements.
F-6
HANESBRANDS INC.
Consolidated Balance Sheets
(in thousands, except share and per share data)
December 28,
2024
December 30,
2023
Assets
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
214,854 $
185,217
Trade accounts receivable, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
376,195
423,682
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
871,044
956,430
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
152,853
113,281
Current assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
100,430
597,605
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,715,376
2,276,215
Property, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
188,259
353,035
Right-of-use assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
222,759
271,751
Trademarks and other identifiable intangibles, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
886,264
959,851
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
638,370
659,361
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13,591
18,176
Other noncurrent assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
116,729
135,247
Noncurrent assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
59,593
966,678
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
3,840,941 $
5,640,314
Liabilities and Stockholders’ Equity
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
593,377 $
538,782
Accrued liabilities and other:
Payroll and employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
121,267
82,711
Advertising and promotion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
111,080
130,242
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
220,593
197,199
Lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
64,233
64,547
Accounts Receivable Securitization Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
95,000
6,000
Current portion of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
59,000
Current liabilities held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
42,990
312,087
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,248,540
1,390,568
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,186,057
3,235,640
Lease liabilities - noncurrent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
206,124
235,453
Pension and postretirement benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
66,171
98,170
Other noncurrent liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
67,452
121,150
Noncurrent liabilities held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
32,587
139,980
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,806,931
5,220,961
Stockholders’ equity:
Preferred stock (50,000,000 authorized shares; $.01 par value)
Issued and outstanding — None . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
Common stock (2,000,000,000 authorized shares; $.01 par value)
Issued and outstanding — 352,541,826 and 350,137,826, respectively . . . . . . . . . . . . . .
3,525
3,501
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
373,213
353,367
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
234,494
554,796
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(577,222)
(492,311)
Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
34,010
419,353
Total liabilities and stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
3,840,941 $
5,640,314
Table of Contents
See accompanying notes to Consolidated Financial Statements.
F-7
HANESBRANDS INC.
Consolidated Statements of Stockholders’ Equity
(in thousands, except per share data)
Common Stock
Additional
Paid-In
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Total
Shares
Amount
Balances at January 1, 2022 . . .
349,903 $
3,499 $
315,337 $
935,260 $
(551,603) $
702,493
Net loss . . . . . . . . . . . . . . . . . . . .
—
—
—
(127,204)
—
(127,204)
Dividends ($0.60 per common
share) . . . . . . . . . . . . . . . . . . . .
—
—
—
(212,375)
—
(212,375)
Other comprehensive income . . .
—
—
—
—
39,595
39,595
Stock-based compensation . . . . .
—
—
23,157
—
—
23,157
Vesting of restricted stock units
and other . . . . . . . . . . . . . . . . .
683
7
(2,391)
—
—
(2,384)
Share repurchases . . . . . . . . . . . .
(1,577)
(16)
(1,427)
(23,575)
—
(25,018)
Balances at December 31, 2022
349,009 $
3,490 $
334,676 $
572,106 $
(512,008) $
398,264
Net loss . . . . . . . . . . . . . . . . . . . .
—
—
—
(17,726)
—
(17,726)
Other comprehensive income . . .
—
—
—
—
19,697
19,697
Stock-based compensation . . . . .
—
—
20,304
—
—
20,304
Vesting of restricted stock units
and other . . . . . . . . . . . . . . . . .
1,129
11
(1,613)
416
—
(1,186)
Balances at December 30, 2023
350,138 $
3,501 $
353,367 $
554,796 $
(492,311) $
419,353
Net loss . . . . . . . . . . . . . . . . . . . .
—
—
—
(320,431)
—
(320,431)
Other comprehensive loss . . . . . .
—
—
—
—
(84,911)
(84,911)
Stock-based compensation . . . . .
—
—
25,686
—
—
25,686
Vesting of restricted stock units
and other . . . . . . . . . . . . . . . . .
2,404
24
(5,840)
129
—
(5,687)
Balances at December 28, 2024
352,542 $
3,525 $
373,213 $
234,494 $
(577,222) $
34,010
Table of Contents
See accompanying notes to Consolidated Financial Statements.
F-8
HANESBRANDS INC.
Consolidated Statements of Cash Flows
(in thousands)
Years Ended
December 28,
2024(1)
December 30,
2023(1)
December 31,
2022(1)
Operating activities:
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (320,431) $
(17,726) $ (127,204)
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
69,861
75,268
76,294
Amortization of acquisition intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12,020
16,569
18,204
Other amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,174
13,200
11,769
Impairment of long-lived assets and goodwill . . . . . . . . . . . . . . . . . . . . . . .
76,746
—
—
Inventory write-down charges, net of recoveries . . . . . . . . . . . . . . . . . . . .
119,748
—
—
Loss on extinguishment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,412
8,466
—
Loss (gain) on sale of businesses and classification of assets held for sale .
114,161
3,641
(3,162)
Amortization of debt issuance costs and debt discount . . . . . . . . . . . . . . . .
12,535
8,939
7,300
Stock compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25,845
20,546
23,457
Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(11,974)
(84,745)
388,607
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
909
610
7,511
Changes in assets and liabilities:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,785)
174,249
154,145
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
114,931
599,982
(437,641)
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17,555
82,672
(107,742)
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17,649
(194,602)
(241,557)
Accrued pension and postretirement benefits . . . . . . . . . . . . . . . . . . . .
(4,662)
6,799
(2,023)
Accrued liabilities and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,549
(152,119)
(126,760)
Net cash from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
264,243
561,749
(358,802)
Investing activities:
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(37,889)
(44,056)
(112,122)
Purchase of trademarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
(103,000)
Proceeds from sales of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12,362
331
157
Proceeds from (payments for) disposition of businesses . . . . . . . . . . . . . . . . .
838,560
1,300
(10,816)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
18,942
9,353
Net cash from investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
813,033
(23,483)
(216,428)
Financing activities:
Borrowings on Term Loan Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
891,000
—
Repayments on Term Loan Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,127,483)
(44,250)
(25,000)
Borrowings on Accounts Receivable Securitization Facility . . . . . . . . . . . . . .
1,831,000
2,270,000
1,840,389
Repayments on Accounts Receivable Securitization Facility . . . . . . . . . . . . . (1,742,000) (2,473,500) (1,630,889)
Borrowings on Revolving Loan Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . .
613,500
1,923,000
1,792,000
Repayments on Revolving Loan Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(613,500) (2,275,500) (1,439,500)
Borrowings on Senior Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
600,000
—
Repayments on Senior Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
— (1,436,884)
—
Borrowings on notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
21,454
Repayments on notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
(21,713)
Share repurchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
(25,018)
Cash dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
(209,312)
Payments to amend and refinance credit facilities . . . . . . . . . . . . . . . . . . . . . .
(783)
(31,020)
(3,159)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7,454)
(2,921)
(3,423)
Net cash from financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,046,720)
(580,075)
295,829
Effect of changes in foreign exchange rates on cash . . . . . . . . . . . . . . . . . . . . . .
(20,703)
8,897
(42,815)
Change in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,853
(32,912)
(322,216)
Cash and cash equivalents at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . .
205,501
238,413
560,629
Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
215,354 $
205,501 $
238,413
Balances included in the Consolidated Balance Sheets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
214,854 $
185,217 $
196,237
Cash and cash equivalents included in current assets held for sale . . . . . . . . .
500
20,284
42,176
Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
215,354 $
205,501 $
238,413
(1)
The cash flows related to discontinued operations have not been segregated and remain included in the major classes of assets and
liabilities. Accordingly, the Consolidated Statements of Cash Flows include the results of continuing and discontinued operations.
Table of Contents
See accompanying notes to Consolidated Financial Statements.
F-9
(1)
Basis of Presentation
Hanesbrands Inc., a Maryland corporation (the “Company”), is a socially responsible global leader in everyday iconic
apparel operating across the Americas, Australia and Asia, under some of the world’s most recognized apparel brands in the
core and essentials category including Hanes, Bonds, Bali, Maidenform, Playtex, Bras N Things, Berlei, Wonderbra, Zorba,
JMS/Just My Size and Comfortwash. The Company primarily designs, manufactures, sources and sells a broad range of
innerwear apparel, such as T-shirts, bras, panties, shapewear, underwear and socks, as well as other apparel products that are
manufactured or sourced in the Company’s world-class supply chain.
The Company’s fiscal year ends on the Saturday closest to December 31. All references to “2024”, “2023” and “2022”
relate to the 52-week fiscal year ended on December 28, 2024, December 30, 2023 and December 31, 2022, respectively. Three
subsidiaries of the Company close three days after the Company’s consolidated year end. The difference in reporting of
financial information for these subsidiaries did not have a material impact on the Company’s financial condition, results of
operations or cash flows.
Business Strategy
The Company’s business strategy integrates its brand superiority, industry-leading innovation and low-cost global supply
chain to provide higher value products while lowering production costs. The Company operates primarily in the global
innerwear apparel category, along with smaller operations within other apparel categories. The business strategy is based on
managing and growing the Company’s iconic brands through the three key principles of simplifying for growth, focus for
impact, and continuously improving to win. By simplifying the portfolio, the Company continues to elevate these brands by
delivering quality and value to its consumers through innovative brand and product experiences. The Company remains focused
on the core product offerings while also expanding through innovation and new business opportunities for greater marketplace
impact.
The Company is taking decisive actions to streamline operations and deliver measurable results and has pushed to reduce
inventory and product SKUs through its disciplined inventory management. The Company has segmented and consolidated its
world-class supply chain for greater efficiency and flexibility and its go-to-market strategy has been reimagined into a winning,
repeatable cadence, supported by a robust, consumer-led innovation process that keeps it at the forefront of industry trends. The
Company is highly confident its iconic brand portfolio, world-class supply chain and product innovation will ensure it will
consistently grow sales, expand its margins and generate cash flow.
Over the last three years, the Company has experienced several unanticipated challenges, including significant cost
inflation, market disruption and consumer-demand headwinds. Despite the challenging global operating environment, the
Company has been able to balance the near-term management of the business with making the long-term investments necessary
to execute its strategy and transform the Company. During this time, the Company has made meaningful progress on several of
its strategic initiatives. The Company has pivoted its U.S. innerwear business back to gaining market share, which has been
driven by the launch of new product innovation, increased marketing investments in the Company’s brands and improved on-
shelf product availability. The Company has simplified its portfolio by selling its global Champion, U.S.-based outlet store,
U.S. Sheer Hosiery and European Innerwear businesses.
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-10
Discontinued Operations
In September 2023, the Company announced that its Board of Directors and executive leadership team, with the assistance
of financial and legal advisors, were undertaking an evaluation of strategic alternatives for the global Champion business,
which included a broad range of alternatives to maximize shareholder value and also considered an evaluation of the strategic
alternatives for the Company’s U.S.-based outlet store business impacted by the global Champion business. In June 2024, the
Company reached the decision to exit the U.S.-based outlet store business and the global Champion business, excluding the
Champion Japan business, (“global Champion business”). The Company completed the exit of the U.S.-based outlet store
business in July 2024 and completed the sale of the intellectual property and certain operating assets of the global Champion
business in the fourth quarter of 2024 on September 30, 2024. In December 2024, the Company finalized plans to exit the
Champion Japan business and expects to complete the sale of the business within the next 12 months. The Company determined
that the exit of the global Champion business, U.S.-based outlet store business and the Champion Japan business represent
multiple components of a single strategic plan that met held-for-sale and discontinued operations accounting criteria in 2024.
Accordingly, the Company began to separately report the results of these businesses as discontinued operations in its
Consolidated Statements of Operations and to present the related assets and liabilities as held for sale in its Consolidated
Balance Sheets. These changes have been applied to all periods presented.
Unless otherwise noted, discussion within these notes to the consolidated financial statements relates to continuing
operations. See Note “Assets and Liabilities of Businesses Held for Sale” for additional information about discontinued
operations. In addition, the Company realigned its reportable segments in the second quarter of 2024 and has applied this
change to all periods presented. See Note “Business Segment Information” for additional information about reportable
segments.
Ransomware Attack
As previously disclosed, on May 24, 2022, the Company identified that it had become subject to a ransomware attack that
affected certain of its information technology systems. The Company activated its incident response and business continuity
plans and contained the incident. There is no ongoing operational impact on the Company’s ability to provide its products and
services. The Company maintains insurance, including coverage for cyber-attacks, subject to certain deductibles and policy
limitations, in an amount that the Company believes appropriate.
In 2023, the Company recognized a benefit related to business interruption insurance proceeds of $24,062, of which
$23,354 is reflected in the “Cost of sales” line and $708 is reflected in the “Selling, general and administrative expenses” line of
the Consolidated Statements of Operations. The Company received total business interruption insurance proceeds of $25,562 in
2023, a portion of which was recognized as an expected insurance recovery in 2022, related to the recovery of lost profit from
business interruptions. In 2022, the Company incurred costs of $15,427, net of expected insurance recoveries, related to the
ransomware attack. The costs, net of expected insurance recoveries, incurred during 2022 included $14,168 primarily related to
supply chain disruptions, which are reflected in the “Cost of sales” line of the Consolidated Statements of Operations, and
$1,259 primarily related to legal, information technology and consulting fees, which are reflected in the “Selling, general and
administrative expenses” line of the Consolidated Statements of Operations.
(2)
Summary of Significant Accounting Policies
(a) Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned
subsidiaries. All intercompany balances and transactions have been eliminated in consolidation, except for certain intercompany
sales and related profit and receivables from the Company’s supply chain to the European Innerwear business, which was
classified as discontinued operations in the consolidated financial statements in 2022 and was sold on March 5, 2022. The
Company began to separately report the results of the global Champion business, the U.S.-based outlet store businesses, and the
Champion Japan business as discontinued operations in its Consolidated Statements of Operations and to present the related
assets and liabilities as held for sale in 2024. These changes have been applied to all periods presented. Unless otherwise noted,
discussion within these notes to the consolidated financial statements relates to continuing operations. See Note “Assets and
Liabilities of Businesses Held for Sale” for additional information.
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HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-11
(b) Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles
(“GAAP”) requires management to make use of estimates and assumptions that affect the reported amount of assets and
liabilities, certain financial statement disclosures at the date of the financial statements, and the reported amounts of revenues
and expenses during the reporting period. Actual results may vary from these estimates.
(c) Foreign Currency Translation
Foreign currency-denominated assets and liabilities are translated into U.S. dollars at exchange rates existing at the
respective balance sheet dates. Translation adjustments resulting from fluctuations in exchange rates are recorded as a separate
component of accumulated other comprehensive loss (“AOCI”) within stockholders’ equity. The Company translates the results
of operations of its foreign operations at the average exchange rates during the respective periods. Gains and losses resulting
from foreign currency transactions are included in both the “Cost of sales” and “Selling, general and administrative expenses”
lines in the Consolidated Statements of Operations.
(d) Sales Recognition and Incentives
The Company recognizes revenue when obligations under the terms of a contract with a customer are satisfied, which
occurs at a point in time, upon either shipment or delivery to the customer. Revenue is measured as the amount of consideration
the Company expects to receive in exchange for transferring goods, which includes estimates for variable consideration. The
Company records a sales reduction for returns and allowances based upon historical return experience. The Company earns
royalty revenues through license agreements with manufacturers of other consumer products that incorporate certain of the
Company’s brands. The Company accrues revenue earned under these contracts based upon reported sales from the licensee.
The Company offers a variety of sales incentives to resellers and consumers of its products, and the policies regarding the
recognition and display of these incentives within the Consolidated Statements of Operations are as follows:
Discounts, Coupons, and Rebates
The Company provides customers with discounts and rebates that are explicitly stated in the Company’s contracts and are
recorded as a reduction of revenue in the period the product revenue is recognized. The cost of these incentives is estimated
using a number of factors, including historical utilization and redemption rates. The Company includes incentives offered in the
form of free products in the determination of cost of sales.
For all variable consideration, where appropriate, the Company estimates the amount using the expected value, which
takes into consideration historical experience, current contractual requirements, specific known market events and forecasted
customer buying and payment patterns. Overall, these reserves reflect the Company’s best estimates of the amount of
consideration to which the customer is entitled based on the terms of the contracts.
Volume-Based Incentives
Volume-based incentives involve rebates or refunds of cash that are redeemable only if the customer completes a
specified number of sales transactions. Under these incentive programs, the Company estimates the anticipated rebate to be paid
and allocates a portion of the estimated cost of the rebate to each underlying sales transaction with the customer. The Company
records volume-based incentives as a reduction of revenue.
Cooperative Advertising
Under cooperative advertising arrangements, the Company agrees to reimburse the retailer for a portion of the costs
incurred by the retailer to advertise and promote certain of the Company’s products. The Company recognizes the cost of
cooperative advertising programs in the period in which the advertising and promotional activity takes place as a reduction of
revenue.
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HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-12
Fixtures and Racks
Store fixtures and racks are periodically used by resellers to display Company products. The Company expenses the cost
of these fixtures and racks in the period in which they are delivered to the resellers. The Company includes the costs of fixtures
and racks incurred by resellers and charged back to the Company in the determination of net sales. Fixtures and racks purchased
by the Company and provided to resellers are included in the “Selling, general and administrative expenses” line in the
Consolidated Statements of Operations.
Product Returns
The Company generally offers customers a limited right of return for a purchased product. The Company estimates the
amount of its product sales that may be returned by its customers and records this as a reduction of revenue in the period the
related product revenue is recognized.
(e) Advertising Expense
Advertising represents one of several brand building methods used by the Company. Advertising costs, which include the
development and production of advertising materials and the communication of these materials through various forms of media,
are expensed in the period the advertising first takes place. Additionally, the Company has agreements with certain of its largest
customers for digital advertising and the cost of these programs are expensed in the period the advertising and promotional
activity first takes place. The Company recognized advertising expense in the “Selling, general and administrative expenses”
line in the Consolidated Statements of Operations of $174,418, $126,280 and $136,047 in 2024, 2023 and 2022, respectively.
(f) Shipping and Handling Costs
Revenue received for shipping and handling costs is included in net sales and was $5,845, $6,665 and $6,950 in 2024,
2023 and 2022, respectively. Shipping costs, which comprise payments to third-party shippers, and handling costs, which
consist of warehousing costs in the Company’s various distribution facilities, were $245,407, $254,962 and $274,626 in 2024,
2023 and 2022, respectively. The Company recognizes shipping, handling and distribution costs in the “Selling, general and
administrative expenses” line in the Consolidated Statements of Operations.
(g) Research and Development
Research and development costs are expensed as incurred and are included in the “Selling, general and administrative
expenses” line in the Consolidated Statements of Operations. Research and development includes expenditures for new product,
technological improvements for existing products and process innovation, which primarily consist of salaries, consulting and
supplies attributable to time spent on research and development activities. Additional costs include depreciation and
maintenance for research and development equipment and facilities. Research and development expense was $15,988, $18,360
and $20,077 in 2024, 2023 and 2022, respectively.
(h) Defined Contribution Benefit Plans
The Company sponsors 401(k) plans as well as other defined contribution benefit plans. Expense for these plans was
$25,256, $22,578 and $23,647 in 2024, 2023 and 2022, respectively.
(i) Cash and Cash Equivalents
All highly liquid investments with an original maturity of three months or less at the time of purchase are considered to be
cash equivalents. Cash that is subject to legal restrictions or is unavailable for general operating purposes is classified as
restricted cash and is included within “Other current assets” in the Consolidated Balance Sheets.
(j) Accounts Receivable Valuation
Accounts receivable are stated at net realizable value. The allowance for doubtful accounts reflects the Company’s best
estimate of probable losses inherent in the accounts receivable portfolio. Trade receivables are evaluated on a collection (pool)
basis and aggregated on the basis of similar risk characteristics which are determined on the basis of historical losses, the aging
of trade receivables, industry trends, and its customers’ financial strength, credit standing and payment and default history.
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HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-13
(k) Inventory Valuation
Inventories are stated at the estimated lower of cost or net realizable value. Cost is determined by the first-in, first-out, or
“FIFO”, method for inventories. Obsolete, damaged, and excess inventory is carried at net realizable value, which is determined
by assessing historical recovery rates, current market conditions and future marketing and sales plans. Rebates, discounts and
other cash consideration received from a vendor related to inventory purchases are reflected as reductions in the “Cost of Sales”
line in our Consolidated Statements of Operations related inventory item and are therefore reflected in cost of sales when the
related inventory item is sold.
(l) Property
Property is stated at historical cost and depreciation expense is computed using the straight-line method over the estimated
useful lives of the assets. Machinery and equipment is depreciated over periods ranging from one to 15 years and buildings and
building improvements over periods of up to 40 years. A change in the depreciable life is treated as a change in accounting
estimate and the accelerated depreciation is accounted for in the period of change and future periods. Additions and
improvements that substantially extend the useful life of a particular asset and interest costs incurred during the construction
period of major properties are capitalized. Repairs and maintenance costs are expensed as incurred. Upon sale or disposition of
an asset, the cost and related accumulated depreciation are removed from the accounts.
Property is tested for recoverability whenever events or changes in circumstances indicate that its carrying value may not
be recoverable. Such events include significant adverse changes in the business climate, several periods of operating or cash
flow losses, forecasted continuing losses or a current expectation that an asset or an asset group will be disposed of before the
end of its useful life. Recoverability of property is evaluated by a comparison of the carrying amount of an asset or asset group
to future net undiscounted cash flows expected to be generated by the asset or asset group. If these comparisons indicate that an
asset is not recoverable, the impairment loss recognized is the amount by which the carrying amount of the asset exceeds the
estimated fair value. When an impairment loss is recognized for assets to be held and used, the adjusted carrying amount of
those assets is depreciated over its remaining useful life. Restoration of a previously recognized impairment loss is not
permitted under GAAP.
(m) Leases
The Company accounts for leases under the Financial Accounting Standards Board (“FASB”) issued Accounting
Standards Update (“ASU”) 2016-02, “Leases (Topic 842)”. The Company determines whether an arrangement is a lease at
inception. At inception, a right of use asset and lease liability is recorded. The Company has operating leases for real estate
(primarily retail stores and operating facilities) and certain equipment. The Company’s finance leases are not material. Leases
with a term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases
on a straight-line basis over the lease term.
The exercise of lease renewal options is at the Company’s sole discretion. In general, for leased retail real estate, the
Company will not include renewal options in the underlying lease term. However, if a situation arises where the lessor has
control over the option periods, then the Company will include these periods within the lease term. The depreciable life of
assets and leasehold improvements are limited by the expected lease term.
Certain of the Company’s lease agreements include rental payments based on a percentage of retail sales over contractual
levels and others include rental payments adjusted periodically for inflation. The Company’s lease agreements do not contain
any material residual value guarantees or material restrictive covenants.
As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based
on the information available at the lease commencement date in determining the present value of lease payments.
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HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-14
(n) Trademarks and Other Identifiable Intangible Assets
The primary identifiable intangible assets of the Company are trademarks, license agreements, customer and distributor
relationships and computer software. Identifiable intangible assets with finite lives are amortized and those with indefinite lives
are not amortized. The estimated useful life of a finite-lived intangible asset is based upon a number of factors, including
historical experience, the level of maintenance expenditures required to obtain future cash flows, future business plans and the
period over which the asset will be economically useful. Trademarks determined to have finite lives are generally amortized
over periods ranging from 10 to 20 years, license agreements are generally amortized over periods ranging from three to 15
years, customer and distributor relationships are generally amortized over periods ranging from one to 15 years, computer
software is generally amortized over periods ranging from four to seven years and other intangibles are generally amortized
over periods ranging from one to 10 years.
Identifiable intangible assets that are subject to amortization are evaluated for impairment using a process similar to that
used in evaluating elements of property. Identifiable intangible assets not subject to amortization are assessed for impairment at
least annually, as of the first day of the third fiscal quarter, and additionally if triggering events occur. The impairment test for
identifiable intangible assets not subject to amortization consists of comparing the fair value of the intangible asset, which is
determined using the income approach, to its carrying value. If the carrying value exceeds the fair value of the asset, an
impairment loss is recognized in an amount equal to such excess. Fair values of intangible assets are primarily based on future
cash flows projected to be generated from that asset. In performing the discounted cash flow analysis, management makes
various judgments, estimates and assumptions, the most significant of which are the assumptions related to weighted average
cost of capital, revenue growth rate, terminal growth rate and operating profit margin rate. Rates used to discount cash flows are
dependent upon interest rates and the cost of capital at a point in time. There are inherent uncertainties related to these factors
and management’s judgment in applying them to the analysis of intangible asset impairment.
The Company capitalizes internal software development costs incurred during the application development stage, which
include the actual costs to purchase software from vendors and generally include personnel and related costs for employees who
were directly associated with the enhancement and implementation of purchased computer software. Additions to computer
software are included in the “Capital expenditures” line in the Consolidated Statements of Cash Flows.
(o) Goodwill
Goodwill is the amount by which the purchase price exceeds the fair value of the assets acquired and liabilities assumed in
a business combination. When a business combination is completed, the assets acquired and liabilities assumed are assigned to
the reporting unit or units of the Company given responsibility for managing, controlling and generating returns on these assets
and liabilities. In many instances, all of the acquired assets and assumed liabilities are assigned to a single reporting unit and in
these cases, all of the goodwill is assigned to the same reporting unit. In those situations in which the acquired assets and
liabilities are allocated to more than one reporting unit, the goodwill to be assigned to each reporting unit is determined in a
manner similar to how the amount of goodwill recognized in a business combination is determined.
Goodwill is not amortized; however, it is assessed for impairment at least annually, as of the first day of the third quarter,
and additionally if triggering events occur. In evaluating the recoverability of goodwill, the Company estimates the fair value of
its reporting units, which is determined using the income approach, and compares it to the carrying value. If the carrying value
of the reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to such excess. Fair values of
reporting units are primarily based on future cash flows projected to be generated from that business. In performing the
discounted cash flow analysis, management makes various judgments, estimates and assumptions, the most significant of which
are the assumptions related to weighted average cost of capital, revenue growth rate, terminal growth rate and operating profit
margin rate. Rates used to discount cash flows are dependent upon interest rates and the cost of capital at a point in time. There
are inherent uncertainties related to these factors and management’s judgment in applying them to the analysis of goodwill
impairment.
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HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-15
(p) Cloud Computing Arrangements
The Company’s cloud computing arrangements (“CCA”) include software licenses purchased from external vendors.
Software license costs, implementation costs incurred during the application development stage and other costs meeting certain
criteria are capitalized while all other costs are expensed as incurred. These assets are included in computer software in the
“Trademarks and other identifiable intangibles, net” line in the Consolidated Balance Sheets and amortized on a straight-line
basis over their assessed useful lives. See Note “Intangible Assets and Goodwill” for additional information.
If a CCA does not include the purchase of a software license, the arrangement is accounted for as a service contract and
the fees associated with the hosting service are expensed as incurred. Prepayments of these costs are included in the “Other
current assets” line in the Consolidated Balance Sheets. Implementation costs incurred during the application development
stage as well as costs meeting certain criteria are capitalized and expensed on a straight-line basis over the term of the hosting
contracts, which range from four to seven years. The capitalized assets are included in the “Other noncurrent assets” line in the
Consolidated Balance Sheets. As of December 28, 2024 and December 30, 2023, net capitalized assets were $92,194 and
$93,514, respectively. Changes in the capitalized assets are included in the “Other assets” line within operating activities in the
Consolidated Statements of Cash Flows.
(q) Insurance Reserves
The Company is self-insured for property, workers’ compensation, medical and other casualty programs up to certain
stop-loss limits. Undiscounted liabilities for self-insured exposures are accrued at the present value of the expected aggregate
losses below those limits and are based on a number of assumptions, including historical trends, actuarial assumptions and
economic conditions.
(r) Supplier Finance Programs
The Company reviews supplier terms and conditions on an ongoing basis and has negotiated payment term extensions in
recent years in connection with its efforts to effectively manage working capital and improve cash flow. Separate from these
payment term extension actions noted above, the Company and certain financial institutions facilitate voluntary supplier finance
programs that enable participating suppliers the ability to request payment of their invoices from the financial institutions earlier
than the terms stated in Company’s payment policy. The Company is not a party to the arrangements between the suppliers and
the financial institutions and its obligations to suppliers, including amounts due and scheduled payment dates, are not impacted
by the suppliers’ participation in the supplier finance programs. The Company’s payment terms to the financial institutions,
including the timing and amount of payments, are based on the original supplier invoices. The Company has no economic
interest in a supplier’s decision to participate in the supplier finance programs and has no financial impact in connection with
the supplier finance programs. Accordingly, obligations under these programs continue to be trade payables and are not
indicative of borrowing arrangements. See Note “Supplier Finance Programs” for additional information.
(s) Stock-Based Compensation
The Company established the Hanesbrands Inc. Omnibus Incentive Plan (As Amended and Restated), (the “Omnibus
Incentive Plan”) to award stock options, stock appreciation rights, restricted stock, restricted stock units, deferred stock units,
performance shares and cash to its employees, non-employee directors and employees of its subsidiaries to promote the
interests of the Company, incent performance and retain employees. Stock-based compensation is estimated at the grant date
based on the award’s fair value and is recognized as expense over the requisite service period. The Company estimates
forfeitures for stock-based awards granted that are not expected to vest.
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HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-16
(t) Income Taxes
Deferred taxes are recognized for the future tax effects of temporary differences between financial and income tax
reporting using tax rates in effect for the years in which the differences are expected to reverse. Given continuing losses in
certain jurisdictions in which the Company operates on a separate return basis, a valuation allowance has been established for
the deferred tax assets in these specific locations. The Company periodically estimates the probable tax obligations using
historical experience in tax jurisdictions and informed judgment. There are inherent uncertainties related to the interpretation of
tax regulations in the jurisdictions in which the Company transacts business. The judgments and estimates made at a point in
time may change based on the outcome of tax audits, as well as changes to, or further interpretations of, regulations. Income tax
expense is adjusted in the period in which these events occur, and these adjustments are included in the Company’s
Consolidated Statements of Operations. If such changes take place, there is a risk that the Company’s effective tax rate may
increase or decrease in any period. A company must recognize the tax benefit from an uncertain tax position only if it is more
likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of
the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest
benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution.
The Company continues to use a portfolio approach to release the income tax effects in accumulated other comprehensive
loss related to pension and postretirement benefits. Under this approach, the income tax effects are released from AOCI based
on the pre-tax adjustments to pension liabilities or assets recognized within other comprehensive income. Any tax effects
remaining in AOCI are released only when the entire portfolio of the pension and postretirement benefits is liquidated, sold or
extinguished.
(u) Financial Instruments
The Company uses forward foreign exchange contracts and has used cross-currency swap contracts to manage its
exposures to movements in foreign exchange rates and has used interest rate contracts to manage its exposure to movements in
interest rates. The Company has also used a combination of cross-currency swap contracts and long-term debt to manage its
exposure to foreign currency risk associated with the Company’s net investment in certain European subsidiaries. The use of
these derivative and nonderivative financial instruments modifies the Company’s exposure to these risks with the goal of
reducing the risk or cost to the Company. The Company does not use derivatives for trading purposes and is not a party to
leveraged derivative contracts.
Depending on the nature of the underlying risk being hedged, these derivative and nonderivative financial instruments are
accounted for either as cash flow, net investment or mark to market hedges against changes in the value of the hedged item.
Derivatives are recorded in the Consolidated Balance Sheets at fair value. The fair value is based upon either market quotes for
actively traded instruments or independent bids for nonexchange traded instruments. The accounting for changes in fair value of
a derivative instrument depends on whether the instrument has been designated and qualifies as part of a hedging relationship.
The Company determines whether a derivative instrument meets the criteria for cash flow or net investment hedge accounting
treatment on the date the derivative is executed. Derivatives accounted for as mark to market hedges are not designated as
hedges for accounting purposes.
The Company formally documents its hedge relationships, including identifying the hedging instruments and the hedged
items, as well as its risk management objectives and strategies for undertaking the hedge transaction. This process includes
linking financial instruments to the hedged assets, liabilities, firm commitments, forecasted transactions or net investments.
The Company may be exposed to credit losses in the event of nonperformance by individual counterparties or the entire
group of counterparties to the Company’s derivative contracts. Risk of nonperformance by counterparties is mitigated by
dealing with highly rated counterparties and by diversifying across counterparties.
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HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-17
Cash Flow Hedges
For a cash flow hedge, the Company formally assesses, both at inception and on at least a quarterly basis thereafter,
whether the designated derivative instrument is highly effective in offsetting changes in cash flows of the hedged item. The
change in the fair value of a derivative instrument that is designated and highly effective as a cash flow hedge is recorded as a
deferred gain or loss in the “Accumulated other comprehensive loss” line in the Consolidated Balance Sheets. When the hedged
item affects the statement of operations, the deferred gain or loss on the derivative instrument is reclassified from AOCI and
recorded on the same line in the Consolidated Statements of Operations as the hedged item. The Company does not exclude
amounts from effectiveness testing for cash flow hedges that would require recognition into earnings based on changes in fair
value. If it is determined that a designated derivative instrument ceases to be a highly effective cash flow hedge, or if the
anticipated transaction is no longer likely to occur, the Company discontinues hedge accounting, and any deferred gain or loss
is reclassified from AOCI and recorded on the same line in the Consolidated Statements of Operations as the hedged item.
Cash flows from derivatives designated as cash flow hedges are classified in the same category as the item being hedged
in the Consolidated Statements of Cash Flows.
Net Investment Hedges
For a net investment hedge, the Company formally assesses, both at inception and on a quarterly basis thereafter, whether
the designated financial instrument is highly effective as an economic hedge of foreign exchange risk associated with the
hedged net investment. The change in the fair value of a derivative instrument or the change in the carrying value of a
nonderivative financial instrument that is designated and highly effective as a net investment hedge is recorded as a deferred
gain or loss in the cumulative translation adjustment component of AOCI, offsetting the translation gain or loss for the net
investment being hedged.
The Company assesses net investment hedge effectiveness and measures net investment hedge results for both derivative
and nonderivative hedging instruments on an after-tax basis. The interest component of a cross-currency swap derivative
contract designated in a highly effective net investment hedge is excluded from the assessment of hedge effectiveness and is
initially recorded in the cumulative translation adjustment component of AOCI. This excluded component is amortized in
earnings using a systematic and rational method over the term of the cross-currency swap derivative contract and recorded in
the “Interest expense, net” line in the Consolidated Statements of Operations.
If a net investment hedging relationship ceases to be highly effective, the Company discontinues hedge accounting, and
any future change in the fair value of the derivative hedging instrument or future change in the carrying value of the
nonderivative hedging instrument is recorded in the “Other expenses” line in the Consolidated Statements of Operations, which
is where the gain or loss on the sale or substantial liquidation of the underlying net investment would be recorded. However,
any deferred gain or loss previously recorded in the cumulative translation adjustment component of AOCI will remain in
AOCI until the hedged net investment is sold or substantially liquidated, at which time the cumulative deferred gain or loss is
reclassified from AOCI and recorded in the “Other expenses” line in the Consolidated Statements of Operations.
Cash flows from the periodic and final settlements of the cross-currency swap contracts are reported as cash flows from
investing activities in the Consolidated Statements of Cash Flows because the hedged item is a net investment in foreign
subsidiaries, and the cash paid or received from acquiring or selling the subsidiaries would typically be classified as investing.
Mark to Market Hedges
A derivative instrument whose change in fair value is used to hedge against changes in the value of a hedged item, but
which is not designated as a hedge under the accounting standards, is accounted for as a mark to market hedge. These
derivatives are recorded at fair value in the Consolidated Balance Sheets when the hedged item is recorded as an asset or
liability and then are revalued each accounting period. Changes in the fair value of derivatives accounted for as mark to market
hedges are reported in the “Cost of sales” and “Selling, general and administrative expenses” lines in the Consolidated
Statements of Operations.
Cash flows from derivatives not designated as hedges are classified as cash flows from operating activities in the
Consolidated Statements of Cash Flows.
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HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-18
(v) Assets and Liabilities Acquired in Business Combinations
Business combinations are accounted for using the purchase method, which requires the Company to allocate the cost of
an acquired business to the acquired assets and assumed liabilities based on their estimated fair values at the acquisition date.
The Company recognizes the excess of an acquired business’ cost over the fair value of acquired assets and assumed liabilities
as goodwill. Fair values are determined using the income approach based on market participant assumptions focusing on future
cash flow projections and accepted industry standards.
(w) Recently Issued Accounting Pronouncements
Disaggregation of Income Statement Expenses
In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense
Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”, which is intended to enhance
transparency into the nature and function of expenses. The new accounting rules require that on an annual and interim basis,
entities disclose disaggregated operating expense information about specific categories, including purchases of inventory,
employee compensation, depreciation, amortization and selling expense. The new accounting rules will be effective for the
Company beginning with the annual period of 2027 and interim periods beginning in 2028. Early adoption is permitted. This
ASU can be adopted either (i) prospectively to financial statements issued for reporting periods after the effective date of the
ASU or (ii) retrospectively to any or all prior reporting periods presented in the financial statements. While the new accounting
rules will not have any impact on the Company’s financial condition, results of operations or cash flows, the adoption of the
new accounting rules will result in additional disclosures. The Company is currently assessing the impact of this guidance on
our disclosures.
Reference Rate Reform
In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of
Reference Rate Reform on Financial Reporting.” In January 2021, the FASB clarified the scope of that guidance with the
issuance of ASU 2021-01, “Reference Rate Reform: Scope.” The new accounting rules provide optional expedients and
exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform. In
December 2022, the FASB deferred the expiration date of Topic 848 with the issuance of ASU 2022-06, “Reference Rate
Reform: Deferral of the Sunset Date of Topic 848.” The new accounting rules extend the relief in Topic 848 beyond the
cessation date of USD London Interbank Offered Rate (“LIBOR”). The new accounting rules were effective for the Company
in the fourth quarter of 2024. As the Company’s contracts referencing LIBOR have previously been amended or replaced with
Secured Overnight Financing Rate (“SOFR”) based contracts, the adoption of the new accounting rules did not have an impact
on the Company’s financial condition, results of operations, cash flows or disclosures.
Supplier Finance Program Obligations
In September 2022, the FASB issued ASU 2022-04, “Liabilities - Supplier Finance Programs (Subtopic 405-50):
Disclosure of Supplier Finance Program Obligations.” The new accounting rules create certain disclosure requirements for a
buyer in a supplier finance program. The new accounting rules require qualitative and quantitative disclosures including key
terms of the program, balance sheet presentation of related amounts, the obligation amount the buyer has confirmed as valid to
the finance provider and a rollforward of the obligation. The accounting rules do not impact the recognition, measurement, or
financial statement presentation of supplier finance program obligations. The disclosure of the obligation rollforward is
effective for the Company for annual periods beginning in 2024 and all other disclosures were effective for the Company in the
first quarter of 2023. While the new accounting rules did not have any impact on the Company’s financial condition, results of
operations or cash flows, the adoption of the new accounting rules did result in additional disclosures beginning in the first
quarter of 2023, which are included in Note “Supplier Finance Programs.”
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-19
Leases
In March 2023, the FASB issued ASU 2023-01, “Leases (Topic 842): Common Control Arrangements.” The new
accounting rules require that leasehold improvements associated with common control leases be amortized by the lessee over
the useful life of the leasehold improvements to the common control group (regardless of the lease term) as long as the lessee
controls the use of the underlying asset (the leased asset) through a lease. These leases should also be accounted for as a transfer
between entities under common control through an adjustment to equity if, and when, the lessee no longer controls the use of
the underlying asset. The new accounting rules were effective for the Company in the first quarter of 2024, including interim
periods. The adoption of the new rules did not have a material impact on the Company’s financial condition, results of
operations, cash flows and disclosures.
Segment Reporting
In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable
Segment Disclosures.” The new accounting rules are designed to improve reportable segment disclosure requirements,
primarily through enhanced disclosures about significant segment expenses. The new accounting rules are effective for the
Company for the annual period of 2024 and interim periods beginning in 2025. While the new accounting rules did not have
any impact on the Company’s financial condition, results of operations or cash flows, the adoption of the new accounting rules
resulted in additional disclosures, which are included in Note “Business Segment Information.”
Income Taxes
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax
Disclosures.” The new accounting rules on income tax disclosures require entities to disclose (1) specific categories in the rate
reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit as separated between
domestic and foreign and (3) income tax expense or benefit from continuing operations as separated by federal, state, and
foreign. The new accounting rules also require entities to disclose their income tax payments to federal, state and local
jurisdictions, and international, among other changes. The new accounting rules will be effective for the Company for the
annual periods beginning in 2025 and should be applied on a prospective basis, but retrospective application is permitted. Early
adoption is permitted. While the new accounting rules will not have any impact on the Company’s financial condition, results
of operations or cash flows, the adoption of the new accounting rules will result in additional disclosures.
(x) Reclassifications
Certain prior year amounts in the Consolidated Statements of Cash Flows have been reclassified to conform with the
current year presentation.
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-20
(3)
Assets and Liabilities of Businesses Held for Sale
Assets and liabilities of businesses classified as held for sale in the Consolidated Balance Sheets consist of the following:
December 28,
2024
December 30,
2023
Global Champion business - discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
38,841 $
513,247
Champion Japan business - discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
61,589
47,870
U.S.-based outlet store business - discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
36,488
Current assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
100,430 $
597,605
Global Champion business - discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
31,935 $
916,239
Champion Japan business - discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27,658
30,772
U.S.-based outlet store business - discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
19,667
Noncurrent assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
59,593 $
966,678
Global Champion business - discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
10,716 $
245,359
Champion Japan business - discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
32,274
59,012
U.S.-based outlet store business - discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
7,716
Current liabilities held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
42,990 $
312,087
Global Champion business - discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
11,488 $
110,451
Champion Japan business - discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21,099
22,083
U.S.-based outlet store business - discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
7,446
Noncurrent liabilities held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
32,587 $
139,980
U.S. Sheer Hosiery Business - Continuing Operations
In the fourth quarter of 2021, the Company reached the decision to divest its U.S. Sheer Hosiery business, including the
L’eggs brand, as part of its strategy to streamline its portfolio under its Full Potential transformation plan and determined that
this business met held-for-sale accounting criteria. The Company recorded a non-cash charge in the fourth quarter of 2021
against the net assets held for sale to write down the carrying value of the disposal group to the estimated fair value less costs of
disposal. In 2022, the Company recorded a non-cash gain of $3,535, which is reflected in the “Selling, general and
administrative expenses” line in the Consolidated Statements of Operations, to adjust the valuation allowance primarily
resulting from a decrease in carrying value due to changes in working capital. In 2023, the Company recognized a loss, net of
proceeds of $3,641, which is reflected in the “Selling, general and administrative expenses” line in the Consolidated Statements
of Operations, associated with the sale of the U.S. Sheer Hosiery business and adjustments to the related valuation allowance
prior to the sale primarily resulting from changes in carrying value due to changes in working capital. The operations of the
U.S. Sheer Hosiery business were reported in Other for all periods presented in Note “Business Segment Information.”
The Company completed the sale of its U.S. Sheer Hosiery business to AllStar Hosiery LLC, an affiliate of AllStar
Marketing Group, LLC, on September 29, 2023 for $3,300 in total proceeds, which included cash of $1,300, which is reported
in “Net cash from investing activities” in the Consolidated Statements of Cash Flows for the year ended December 30, 2023
and a receivable of $2,000, which is reported in the “Other current assets” line in the Consolidated Balance Sheets at
December 30, 2023. Collections of the receivable from AllStar in 2024 are reported in “Net cash from investing activities” in
the Consolidated Statements of Cash Flows for the year ended December 28, 2024.
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-21
Discontinued Operations
In 2024, the Company determined that the exit of the global Champion business, U.S.-based outlet store business and the
Champion Japan business represent multiple components of a single strategic plan that met held-for-sale and discontinued
operations accounting criteria and began to separately report the results of these businesses as discontinued operations in its
Consolidated Statements of Operations and to present the related assets and liabilities as held for sale in its Consolidated
Balance Sheets. The Company completed the exit of the U.S.-based outlet store business in July 2024 and completed the sale of
the intellectual property and certain operating assets of the global Champion business in the fourth quarter of 2024 on
September 30, 2024. In December 2024, the Company finalized plans to exit the Champion Japan business and expects to
complete the sale of the business within the next 12 months. The results of these businesses are reported in the “Income (loss)
from discontinued operations” line in the Consolidated Statements of Operations. In addition, certain expenses related to the
operations of the global Champion business, the U.S.-based outlet store business and the Champion Japan business were
included in general corporate expenses, restructuring and other action-related charges and amortization of intangibles, which
were previously excluded from segment operating profit, and have been reclassified to discontinued operations in 2024. These
changes have been applied to all periods presented.
In the first quarter of 2021, the Company announced that it had reached the decision to exit its European Innerwear
business as part of its strategy to streamline its portfolio and determined that this business met held-for-sale and discontinued
operations accounting criteria. Accordingly, the Company began to separately report the results of its European Innerwear
business as discontinued operations in its Consolidated Statements of Operations, and to present the related assets and liabilities
as held for sale in its Consolidated Balance Sheets. The results of the European Innerwear business, prior to completion of the
sale in March 2022, are reported in the “Income (loss) from discontinued operations” line in the Consolidated Statements of
Operations in 2022.
Global Champion Business
In the second quarter of 2024, the Company announced that it had reached an agreement to sell the intellectual property
and certain operating assets of the global Champion business to Authentic Brands Group LLC (“Authentic”). Pursuant to the
agreement, as amended, the Company completed the sale of the intellectual property and certain operating assets of the global
Champion business to Authentic in the fourth quarter of 2024 on September 30, 2024 (the “Initial Closing”) in exchange for
gross cash proceeds of $857,450 and a receivable of $12,162. In addition, the Company has the potential to receive additional
contingent cash consideration of up to $300,000 pursuant to the agreement. The Company continued to operate the Champion
business in certain sectors and geographies through a transition period ending on January 31, 2025 (the “Deferred Business”).
The Company continued certain sales from its supply chain to Authentic and the applicable service recipients on a transitional
basis after the sale of the business under a manufacturing and supply agreement that was signed as part of closing the
transaction. Additionally, the Company entered into a transitional services agreement pursuant to which the Company provided
transitional services including information technology, human resources, finance and accounting services. The Company will
continue to provide these services to Authentic and the applicable service recipients over a period of approximately 12 months.
The sales and the related profit are included in continuing operations in the Consolidated Statements of Operations and in Other
in Note “Business Segment Information”. The related receivables from Authentic or the applicable service recipients are
included in “Trade accounts receivable, net” and “Other current assets” in the Consolidated Balance Sheets for all periods
presented.
The Company used net sale proceeds from the Initial Closing of $783,208, which excludes customary transaction costs
and other deductions permitted under the Company’s senior secured credit facility (the “Senior Secured Credit Facility”), to pay
down a portion of the Company’s outstanding term debt in October 2024. In 2024, the Company recorded a net loss on the
Initial Closing of $50,756 and a non-cash charge of $8,554 to write down the carrying value of the net assets of the Deferred
Business to the estimated fair value less costs of disposal, which are both reflected in the “Loss on sale of business and
classification of assets held for sale” line in the summarized discontinued operations financial information below. The Company
completed the sale of the Deferred Business (the “Deferred Closing”) in exchange for gross cash proceeds of $31,020 on
January 31, 2025.
While the operations of the global Champion business were reflected within all reportable segments prior to its
reclassification to discontinued operations, the U.S. Champion business made up the majority of the Company’s former
Activewear segment. See Note “Business Segment Information” for discussion regarding realignment of the Company’s
reportable segments in 2024.
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-22
The following table reconciles the proceeds received from the Initial Closing, which are reported in the “Proceeds from
(payments for) disposition of businesses” line within investing activities in the Consolidated Statements of Cash Flows, to the
loss recognized on the Initial Closing of the global Champion business, which is reported in the “Loss on sale of businesses and
classification of assets held for sale” line within operating activities in the Consolidated Statements of Cash Flows:
Year Ended
December 28,
2024
Gross cash proceeds received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
857,450
Receivable from Authentic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12,162
Total consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
869,612
Less: Net carrying value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
894,046
Less: Costs to sell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26,322
Loss on Initial Closing of global Champion business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(50,756)
U.S.-Based Outlet Store Business
In the second quarter of 2024, the Company began actively marketing its U.S.-based outlet store business to prospective
buyers. In July 2024, the Company entered into a purchase agreement with Restore Capital (HCR Stores), LLC (“Restore”), an
affiliate of Hilco Merchant Resources, LLC. Under the purchase agreement, the Company paid Restore $12,000 at closing and
an additional $3,000 in January 2025 and to provide certain inventory to Restore, in exchange for Restore agreeing to assume
the operations and certain liabilities of the Company’s U.S.-based outlet store business. As of December 28, 2024, the
Company had a valuation allowance of $1,377 for the full balance of the remaining inventory that had not yet been transferred
to Restore. The remaining inventory balance as of December 28, 2024 is reflected in the “Inventories” line and the offsetting
valuation allowance is reflected in the “Valuation allowance - U.S.-based outlet store business” line in the summarized
discontinued operations financial information below. The agreement with Restore did not include Champion-branded U.S. retail
stores, which were addressed in accordance with the purchase agreement governing the sale of the global Champion business to
Authentic, which was completed in the fourth quarter of 2024 on September 30, 2024.
Upon meeting the criteria for held-for-sale classification in the second quarter of 2024, which qualified as a triggering
event, the Company performed an impairment analysis of the goodwill associated with the Company’s U.S.-based outlet store
business, which resulted in a non-cash impairment charge of $2,500 in 2024. The Company also recorded a net loss on the sale
of the U.S.-based outlet store business of $54,851 in 2024, which is reflected in the “Loss on sale of business and classification
of assets held for sale” line in the summarized discontinued operations financial information below.
The operations of the U.S.-based outlet store business were reported in Other in Note “Business Segment Information”
prior to its reclassification to discontinued operations.
Champion Japan Business
The sale of the intellectual property and certain operating assets of the global Champion business, which occurred in the
fourth quarter of 2024, excluded the Champion Japan business. In December 2024, the Company finalized plans to exit the
Champion Japan business and expects to complete the sale of the business within the next 12 months. The Company determined
that the exit of the Champion Japan business represented a component of the single strategic plan that included the global
Champion and U.S.-based outlet store businesses, which met held-for-sale and discontinued operations accounting criteria in
2024. Accordingly, the Company began to separately report the results of Champion Japan business as discontinued operations
in its Consolidated Statements of Operations and to present the related assets and liabilities as held for sale in its Consolidated
Balance Sheets in the fourth quarter of 2024. These changes have been applied to all periods presented. The Company will
continue to operate the Champion Japan business as a licensee of Authentic pursuant to the terms of a license agreement entered
into at the Initial Closing until the sale of the Champion Japan business is completed. The operations of the Champion Japan
business were previously reported in the International segment.
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-23
European Innerwear Business
In November 2021, the Company announced that it had reached an agreement to sell its European Innerwear business to
an affiliate of Regent, L.P., under which the purchaser received all the assets and operating liabilities of the European Innerwear
business, and completed the sale in March 2022. The Company recorded the final loss on the sale of the European Innerwear
business of $373 in 2022, which is reflected in the “Loss on sale of business and classification of assets held for sale” line in the
summarized discontinued operations financial information below. The operations of the European Innerwear business were
previously reported primarily in the International segment.
The Company continued certain sales from its supply chain to the European Innerwear business on a transitional basis
after the sale of the business. The Company was contracted to provide services under the terms of the Manufacturing and
Supply Agreement that was signed as part of closing the transaction through January 2024. Additionally, the Company entered
into a Transitional Services Agreement pursuant to which the Company provided transitional services including information
technology, human resources, facilities management, and limited finance and accounting services which expired in March 2023.
The sales and the related profit are included in continuing operations in the Consolidated Statements of Operations and in Other
in Note “Business Segment Information” in all periods presented and have not been eliminated as intercompany transactions in
consolidation for the period when the European Innerwear business was owned by the Company in 2022. The related
receivables from the European Innerwear business are included in “Trade accounts receivable, net” in the Consolidated Balance
Sheets for all periods presented.
Financial Results of Discontinued Operations
The operating results of discontinued operations only reflect revenues and expenses that are directly attributable to the
global Champion, U.S.-based outlet store, Champion Japan and European Innerwear businesses (the “Discontinued
Operations”) that have been eliminated from continuing operations. Discontinued operations does not include any allocation of
corporate overhead expense. The Company allocated interest expense to the discontinued operations of the global Champion
business of approximately $54,387, $65,703 and $25,807 in 2024, 2023 and 2022, respectively, resulting from the requirement
to pay down a portion of the Company’s outstanding term debt under the Senior Secured Credit Facility with the net proceeds
from the sale of the global Champion business. Interest expense was allocated to the global Champion business on a pro-rata
basis for the expected amount of debt required to be repaid under the Senior Secured Credit Facility, compared to the total
outstanding term debt subject to the repayment requirement. There was no interest allocated to the discontinued operations of
the U.S.-based outlet store business, the Champion Japan business or the European Innerwear business. The key components of
the operating results of the Discontinued Operations are as follows:
Years Ended
December 28,
2024
December 30,
2023
December 31,
2022
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1,404,277 $
1,997,137 $
2,472,155
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
967,573
1,392,617
1,557,183
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
436,704
604,520
914,972
Selling, general and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . .
486,675
582,016
676,588
Impairment of goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,500
—
—
Loss on sale of businesses and classification of assets held for sale . . . . . . .
114,161
—
373
Operating income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(166,632)
22,504
238,011
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
704
759
1,723
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
48,729
61,167
25,350
Income (loss) from discontinued operations before income taxes . . . . . .
(216,065)
(39,422)
210,938
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,371
7,452
17,597
Income (loss) from discontinued operations, net of tax . . . . . . . . . . . . . . $
(222,436) $
(46,874) $
193,341
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-24
Assets and liabilities of discontinued operations related to the global Champion, U.S.-based outlet store and Champion
Japan businesses classified as held for sale in the Consolidated Balance Sheets as of December 28, 2024 and December 30,
2023 consist of the following:
December 28,
2024
December 30,
2023
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
500 $
20,284
Trade accounts receivable, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
32,122
134,047
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
63,058
411,588
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14,681
31,686
Valuation allowance - Global Champion Business Deferred Closing . . . . . . . . . . . . . . . . . . . .
(8,554)
—
Valuation allowance - U.S.-based outlet store business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,377)
—
Current assets held for sale - discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
100,430
597,605
Property, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,585
61,331
Right-of-use assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
39,137
157,167
Trademarks and other identifiable intangibles, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
273
275,853
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,907
453,383
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
3,778
Other noncurrent assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,691
15,166
Noncurrent assets held for sale - discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . .
59,593
966,678
Total assets of discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
160,023 $
1,564,283
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
15,139 $
197,470
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14,640
68,524
Lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13,211
46,093
Current liabilities held for sale - discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . .
42,990
312,087
Lease liabilities - noncurrent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24,771
118,562
Pension and postretirement benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,983
6,085
Other noncurrent liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,833
15,333
Noncurrent liabilities held for sale - discontinued operations . . . . . . . . . . . . . . . . . . . . . . . .
32,587
139,980
Total liabilities of discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
75,577 $
452,067
The cash flows related to discontinued operations have not been segregated and are included in the Consolidated
Statements of Cash Flows. The following table presents cash flow and non-cash information for the Discontinued Operations:
Years Ended
December 28,
2024
December 30,
2023
December 31,
2022
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
7,521 $
14,137 $
14,969
Amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
5,454 $
10,946 $
11,912
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
5,962 $
19,002 $
11,470
Impairment of goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2,500 $
— $
—
Inventory write-down charges, net of recoveries . . . . . . . . . . . . . . . . . . . . . . $
63,348 $
— $
—
Loss on sale of businesses and classification of assets held for sale . . . . . . . $
114,161 $
— $
373
Capital expenditures included in accounts payable at end of period . . . . . . . $
— $
403 $
10,549
Cash paid for amounts included in the measurement of lease liabilities-
operating cash flows from leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
53,077 $
62,547 $
57,292
Right-of-use assets obtained in exchange for lease obligations . . . . . . . . . . . $
19,159 $
48,835 $
4,893
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-25
(4) Revenue Recognition
Revenue is recognized when obligations under the terms of a contract with a customer are satisfied, which occurs at a
point in time, upon either shipment or delivery to the customer. Revenue is measured as the amount of consideration the
Company expects to receive in exchange for transferring goods, which includes estimates for variable consideration. Variable
consideration includes trade discounts, rebates, volume-based incentives, cooperative advertising and product returns, which are
offered within contracts between the Company and its customers, employing the practical expedient for contract costs.
Incidental items that are immaterial to the context of the contract are recognized as expense at the transaction date.
The following table presents the Company’s revenues disaggregated by the customer’s method of purchase:
Years Ended
December 28,
2024
December 30,
2023
December 31,
2022
Wholesale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
3,011,260 $
3,119,447 $
3,256,993
Owned retail stores and websites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
496,178
519,939
605,816
Total net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
3,507,438 $
3,639,386 $
3,862,809
Revenue Sources
Wholesale Revenue
Wholesale revenue is primarily generated by sales of the Company’s products to retailers to support their brick-and-
mortar operations and e-commerce platforms. Wholesale revenue also includes royalty revenue from license agreements as well
as short term supply agreements and transition service agreements. The Company earns royalties through license agreements
with manufacturers of other consumer products that incorporate certain of the Company’s brands. The Company accrues
revenue earned under these contracts based upon reported sales from the licensees.
Owned Retail Stores and Website Revenue
Owned brick-and-mortar retail stores and website revenue is generated through sales driven directly by the consumer
through company-operated stores and e-commerce platforms.
(5)
Earnings (Loss) Per Share
Basic earnings (loss) per share was computed by dividing net income (loss) by the number of weighted average shares of
common stock outstanding during the period. Diluted earnings (loss) per share was calculated to give effect to all potentially
issuable dilutive shares of common stock using the treasury stock method. In 2024 and 2022, all potentially dilutive securities
were excluded from the diluted weighted average share calculation because the Company incurred a net loss for these years and
their inclusion would be anti-dilutive.
The weighted average number of shares used in the basic and diluted earnings (loss) per share calculation is as follows:
Years Ended
December 28,
2024
December 30,
2023
December 31,
2022
Basic weighted average shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . .
352,139
350,592
349,970
Effect of potentially dilutive securities:
Restricted stock units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
455
—
Employee stock purchase plan and other . . . . . . . . . . . . . . . . . . . . . . . . .
—
10
—
Diluted weighted average shares outstanding . . . . . . . . . . . . . . . . . . . . . . . .
352,139
351,057
349,970
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-26
The following securities were excluded from the diluted weighted average share calculation because their effect would be
anti-dilutive:
Years Ended
December 28,
2024
December 30,
2023
December 31,
2022
Stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
250
250
252
Restricted stock units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,395
3,795
1,907
Employee stock purchase plan and other . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
—
8
(6)
Stock-Based Compensation
The Company established the Omnibus Incentive Plan to award stock options, stock appreciation rights, restricted stock,
restricted stock units, deferred stock units, performance shares and cash to its employees, non-employee directors and
employees of its subsidiaries to promote the interests of the Company, incent performance and retain employees. In April 2020,
the stockholders of the Company approved the Hanesbrands Inc. 2020 Omnibus Incentive Plan (the “2020 Omnibus Plan”). The
Company satisfies the requirement for common shares for share-based payments to employees pursuant to the 2020 Omnibus
Plan by issuing newly authorized shares. The 2020 Omnibus Plan initially authorized a total of 11,000 shares of common stock
of the Company for awards granted under the 2020 Omnibus Plan, plus the number of shares of common stock of the Company
available for grant under the predecessor Hanesbrands Inc. Omnibus Incentive Plan (the “Prior Plan”) that had not yet been
made subject to awards under the Prior Plan as of the effective date of the 2020 Omnibus Plan. In April 2023, the stockholders
of the Company approved an amendment to the 2020 Omnibus Plan to increase the authorized shares of common stock of the
Company available for grant by 5,300 shares of common stock. After the April 2023 amendment, the 2020 Omnibus Plan had
79,520 shares authorized for awards of stock options and restricted stock units, of which 11,785 shares were available for future
grants as of December 28, 2024.
Stock Options
Under the Omnibus Incentive Plan, the exercise price of each stock option equals the closing market price of the
Company’s stock on the date of grant. Options granted vest ratably over three years and can be exercised over a term of 10
years. The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model.
There were no options granted during 2024, 2023 or 2022 under the Omnibus Incentive Plan.
The 250 stock options outstanding were granted by the Company in 2020 outside of the 2020 Omnibus Plan in reliance on
the employment inducement exemption under the New York Stock Exchange’s Listed Company Manual Rule 303A.08. The
exercise price of each stock option equals either the closing market price of the Company’s stock on the date of grant or the
closing market price of the Company’s stock on the date of grant multiplied by a specified exercise premium factor applicable
to each option. Options granted vested ratably over three years and can be exercised over a term of 10 years. The fair value of
each option grant was estimated on the date of grant using the Black-Scholes option-pricing model.
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-27
A summary of the changes in stock options outstanding to the Company’s employees is presented below:
Shares
Weighted-
Average
Exercise
Price
Aggregate
Intrinsic
Value
Weighted-
Average
Remaining
Contractual
Term
(Years)
Options outstanding at January 1, 2022 . . . . . . . . . . . . . . . . . . .
250 $
17.18 $
200
8.59
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
Options outstanding at December 31, 2022 . . . . . . . . . . . . . . . .
250 $
17.18 $
—
7.59
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
Options outstanding at December 30, 2023 . . . . . . . . . . . . . . . .
250 $
17.18 $
—
6.59
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
Options outstanding at December 28, 2024 . . . . . . . . . . . . . . . .
250 $
17.18 $
—
5.59
Options exercisable at December 28, 2024 . . . . . . . . . . . . . . . . .
250 $
17.18 $
—
5.59
There were no stock option exercises during 2024, 2023 or 2022.
Stock Unit Awards
Under the Omnibus Incentive Plan, restricted stock units (“RSUs”) of the Company’s stock are granted to certain
Company non-employee directors and employees to induce employment and incent performance and retention over periods of
one to three years. Upon vesting, the RSUs are converted into shares of the Company’s common stock on a one-for-one basis
and issued to the grantees. Some RSUs which have been granted under the Omnibus Incentive Plan vest upon continued future
service to the Company, while others also have a performanced-based vesting feature. The cost of these awards is determined
using the fair value of the shares on the date of grant, and compensation expense is recognized over the period during which the
grantees provide the requisite service to the Company.
A summary of the changes in the restricted stock unit awards outstanding is presented below:
Shares
Weighted-
Average
Grant
Date Fair
Value
Aggregate
Intrinsic
Value
Weighted-
Average
Remaining
Contractual
Term
(Years)
Nonvested share units outstanding at January 1, 2022 . . . . . . . .
2,121 $
16.53 $
35,455
1.18
Granted — non-performanced based . . . . . . . . . . . . . . . . . . .
1,178
15.39
Granted — performanced based . . . . . . . . . . . . . . . . . . . . . . .
1,624
16.98
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(829)
15.92
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(435)
16.84
Nonvested share units outstanding at December 31, 2022 . . . . .
3,659 $
16.46 $
23,268
1.24
Granted — non-performanced based . . . . . . . . . . . . . . . . . . .
2,026
7.76
Granted — performanced based . . . . . . . . . . . . . . . . . . . . . . .
1,662
7.92
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(931)
15.45
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(688)
14.85
Nonvested share units outstanding at December 30, 2023 . . . . .
5,728 $
11.26 $
25,547
1.18
Granted — non-performanced based . . . . . . . . . . . . . . . . . . .
2,328
5.26
Granted — performanced based . . . . . . . . . . . . . . . . . . . . . . .
2,840
5.99
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3,176)
11.03
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(631)
9.86
Nonvested share units outstanding at December 28, 2024 . . . . .
7,089 $
7.41 $
58,343
1.30
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-28
The total fair value of shares vested during 2024, 2023 and 2022 was $35,026, $14,381 and $13,199, respectively. Certain
participants elected to defer receipt of shares earned upon vesting.
In addition to granting RSUs that vest solely upon continued future service to the Company, the Company also grants
performanced-based RSUs where the number of shares of the Company’s common stock that will be received upon vesting
range from 0% to 200% of the number of units granted based on the Company’s achievement of a mix of certain Company
performance metrics as well as a market condition. These performanced-based stock awards, which are included in the table
above, represent awards that are earned based on future performance and service. As reported in the above table, the number of
performanced-based RSUs granted each year represents the initial units granted on the date of grant plus or minus any
adjustment for units that were earned based on the final achievement of the respective performance thresholds.
The Company modified all outstanding RSU and PSU grants issued prior to 2024 for employees associated with the
Champion business to accelerate the vesting of the grants upon the date of the Initial Closing contingent on continued
employment with the Company up to said date. The modified grants for 18 employees resulted in no incremental cost to the
Company.
For all share-based awards granted, the Company recognized compensation expense as follows:
Years Ended
December 28,
2024
December 30,
2023
December 31,
2022
Compensation expense included in continuing operations . . . . . . . . . . . . . . . $
18,769 $
17,439 $
22,249
Compensation expense included in discontinued operations . . . . . . . . . . . . .
6,917
2,865
908
Total compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
25,686 $
20,304 $
23,157
For all share-based awards granted, the Company did not recognize any deferred tax benefits in 2024, 2023 or 2022.
At December 28, 2024, there was $20,967 of total unrecognized compensation cost related to non-vested stock-based
compensation arrangements, of which $13,285, $6,680, and $1,002 is expected to be recognized in continuing operations in
2025, 2026, and 2027, respectively.
(7)
Trade Accounts Receivable
Allowances for Trade Accounts Receivable
The changes in the Company’s allowance for doubtful accounts and allowance for customer chargebacks and other
customer deductions are as follows:
Allowance
for
Doubtful
Accounts
Allowance
for
Chargebacks
and Other
Deductions
Total
Balance at January 1, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
28,708 $
20,215 $
48,923
Charged to expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,383
16,924
22,307
Deductions, write-offs and adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(19,018)
(12,442)
(31,460)
Currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(69)
(268)
(337)
Balance at December 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
15,004 $
24,429 $
39,433
Charged to expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
966
12,059
13,025
Deductions, write-offs and adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2,594)
(12,849)
(15,443)
Currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
774
369
1,143
Balance at December 30, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
14,150 $
24,008 $
38,158
Charged to expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2,890)
7,964
5,074
Deductions, write-offs and adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,361)
(19,812)
(21,173)
Currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(774)
(165)
(939)
Balance at December 28, 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
9,125 $
11,995 $
21,120
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-29
Charges to the allowance for doubtful accounts are reflected in the “Selling, general and administrative expenses” line in
the Consolidated Statements of Operations and charges to the allowance for customer chargebacks and other customer
deductions are primarily reflected as a reduction in the “Net sales” line in the Consolidated Statements of Operations.
Deductions, write-offs and adjustments, which do not increase or decrease income, represent write-offs of and adjustments to
previously reserved accounts receivable and allowed customer chargebacks and deductions against gross accounts receivable.
Sales of Trade Accounts Receivable
The Company has entered into agreements to sell selected trade accounts receivable to financial institutions based on
programs sponsored by the Company as well as working capital programs offered by certain of the Company’s customers. As a
result of the strong credit worthiness of these customers, the discount taken on most of these programs is less than the marginal
borrowing rate on the Company’s variable rate credit facilities. In all agreements, after the sale, the Company does not retain
any beneficial interests in the receivables. The applicable financial institution services and collects the accounts receivable
directly from the customer for programs offered by the Company’s customers. For programs sponsored by the Company, the
Company maintains continued involvement as the servicer to collect the accounts receivable from the customer and remit
payment to the financial institutions. Net proceeds of these accounts receivable sale programs are recognized in the
Consolidated Statements of Cash Flows as part of operating cash flows.
During 2024, 2023 and 2022, the Company sold total trade accounts receivable of $1,820,094, $1,421,592 and $372,693,
respectively, related to Company sponsored programs and removed the trade accounts receivable from the Company’s balance
sheet at the time of sale. As of December 28, 2024 and December 30, 2023, $383,878 and $297,807, respectively, of the sold
trade accounts receivable remain outstanding with the financial institutions as a result of the related servicing obligation.
Collections of accounts receivable not yet submitted to the financial institutions are remitted within one week of collection and
recognized within the “Accounts payable” line in the Consolidated Balance Sheets. As these funds are related to the ongoing
service agreement and do not serve in a financing capacity, cash flows collected from customers and submitted to the financial
institutions are recognized in the Consolidated Statements of Cash Flows as part of operating activities.
The Company recognized total funding fees of $25,990, $21,833 and $8,265 in 2024, 2023 and 2022, respectively, for
sales of trade accounts receivable to financial institutions and working capital programs in the “Other expenses” line in the
Consolidated Statements of Operations.
(8)
Inventories
Inventories consisted of the following:
December 28,
2024
December 30,
2023
Raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
43,243 $
45,960
Work in process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
63,436
70,932
Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
764,365
839,538
$
871,044 $
956,430
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-30
(9)
Property, Net
Property is summarized as follows:
December 28,
2024
December 30,
2023
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
8,424 $
21,810
Buildings and improvements(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
160,646
319,159
Machinery and equipment(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
681,885
839,028
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17,306
42,318
868,261
1,222,315
Less accumulated depreciation(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
680,002
869,280
Property, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
188,259 $
353,035
(1)
Balances as of December 30, 2023 have been revised for a correction of an immaterial error in the prior period disclosure.
Capital expenditures included in accounts payable at December 28, 2024 and December 30, 2023 were $6,231 and
$18,147, respectively. There were no capital expenditures in accounts payable at December 31, 2022.
(10) Leases
The Company has operating leases for real estate (primarily retail stores and operating facilities) and certain equipment.
The Company’s finance leases are not material. The Company’s leases have remaining lease terms of one month to 33 years,
some of which include options to extend the leases for up to 15 years, and some of which include options to terminate the leases
within one year.
Total operating lease costs, which includes short-term lease cost and variable cost, were $136,729, $145,658 and
$145,484 for 2024, 2023 and 2022, respectively. For 2024, 2023 and 2022, variable costs of $44,618, $46,344 and $59,507,
respectively, were included in total operating lease costs. Short-term lease costs were immaterial for 2024, 2023 and 2022.
The following table presents supplemental cash flow and non-cash information related to leases:
Years Ended
December 28,
2024
December 30,
2023
December 31,
2022
Cash paid for amounts included in the measurement of lease liabilities -
operating cash flows from leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
97,576 $
100,423 $
89,146
Right-of-use assets obtained in exchange for lease obligations - non-cash
activity(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
44,285 $
96,918 $
165,349
(1)
Balances as of December 30, 2023 and December 31, 2022 have been revised for a correction of an immaterial error in the prior period
disclosure.
The following table presents supplemental information related to operating lease terms and discount rates:
Years Ended
December 28,
2024
December 30,
2023
December 31,
2022
Weighted average remaining lease term . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.8 years
5.4 years
5.1 years
Weighted average discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.89 %
5.55 %
4.93 %
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-31
The following table presents maturities of operating lease liabilities as of December 28, 2024:
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
77,688
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
75,034
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
56,839
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
44,381
2029 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20,966
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
40,199
Total lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
315,107
Less interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
44,750
$
270,357
As of December 28, 2024, the Company’s operating lease liabilities exclude $17,497 of additional lease commitments that
have not yet commenced. These operating lease liabilities will be paid over a period of 10 years.
(11) Intangible Assets and Goodwill
(a) Intangible Assets
The primary components of the Company’s intangible assets and the related accumulated amortization are as follows:
Gross
Accumulated
Amortization
Net Book
Value
Year ended December 28, 2024:
Intangible assets subject to amortization:
Trademarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
12,165 $
6,674 $
5,491
License agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11,300
11,300
—
Customer and distributor relationships . . . . . . . . . . . . . . . . . . . . . . . . .
83,404
67,777
15,627
Computer software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
122,353
107,620
14,733
Other intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,120
3,120
—
$
232,342 $
196,491
35,851
Intangible assets not subject to amortization:
Trademarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
850,413
Net book value of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
886,264
Gross
Accumulated
Amortization
Net Book
Value
Year ended December 30, 2023:
Intangible assets subject to amortization:
Trademarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
12,866 $
6,438 $
6,428
License agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11,300
11,300
—
Customer and distributor relationships . . . . . . . . . . . . . . . . . . . . . . . . .
88,191
64,411
23,780
Computer software(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
140,480
116,722
23,758
Other intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,292
3,292
—
$
256,129 $
202,163
53,966
Intangible assets not subject to amortization:
Trademarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
905,885
Net book value of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
959,851
(1)
Gross and accumulated amortization balances as of December 30, 2023 have been revised to correct an immaterial
error in the prior period disclosures.
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-32
In connection with the annual intangible assets impairment analysis performed in the third quarter of 2024, the Company
performed a quantitative assessment utilizing an income approach to estimate the fair values of certain indefinite-lived
intangible assets. The most significant assumptions used to estimate the fair values of the indefinite-lived intangible assets
included weighted average cost of capital, revenue growth rate, terminal growth rate and operating profit margin rate. While the
analysis indicated that those indefinite-lived intangible assets had fair values that exceeded their carrying value, the Company
noted a meaningful decline in the fair value cushion above the carrying value for one of the indefinite-lived trademarks with the
Australian business. The decline in this trademark was driven by continued macroeconomic pressures impacting consumer
spending in Australia and resulting in a fair value that exceeded the carrying value by approximately 10% at the time the
analysis was performed. As a result, this trademark was considered to be at a higher risk for future impairment if economic
conditions worsen or earnings and operating cash flows do not recover as currently estimated by management. As of
December 28, 2024, the carrying value of this trademark was $218,341, which is reflected in the “Trademarks and other
identifiable intangibles, net” line in the Consolidated Balance Sheets.
The amortization expense for intangible assets subject to amortization was $16,740, $18,823 and $18,060 for 2024, 2023
and 2022, respectively. The estimated amortization expense for the next five years, assuming no change in the estimated useful
lives of identifiable intangible assets or changes in foreign exchange rates is as follows: $14,683 in 2025, $9,958 in 2026,
$4,035 in 2027, $2,110 in 2028 and $373 in 2029.
(b) Goodwill
Goodwill and the changes in those amounts during the period are as follows:
U.S.
International
Total
Net book value at December 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
402,228 $
256,650 $
658,878
Currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
483
483
Net book value at December 30, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
402,228 $
257,133 $
659,361
Currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
(20,991)
(20,991)
Net book value at December 28, 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
402,228 $
236,142 $
638,370
In connection with the annual goodwill impairment analysis performed in the third quarter of 2024, the Company
performed a quantitative assessment utilizing an income approach to estimate the fair value of each reporting unit. The most
significant assumptions used to estimate the fair values of the reporting units include the weighted average cost of capital,
revenue growth rate, terminal growth rate and operating profit margin rate. The Company completed its annual quantitative
impairment analysis for each reporting unit and the respective goodwill balances. The analysis indicated that all reporting units
had fair values that exceeded their carrying values by more than 20% at the time the analysis was performed. Although the
Company determined that no impairment existed for the Company’s goodwill as of the date the analysis was performed in the
third quarter of 2024, these assets could be at risk for future impairment due to changes in the Company’s business or global
economic conditions.
(12) Supplier Finance Programs
As of December 28, 2024 and December 30, 2023, the amounts due to suppliers participating in supplier finance programs
totaled $106,543 and $108,499, respectively, which are included in the “Accounts Payable” line of the Consolidated Balance
Sheets.
A rollforward of the Company’s outstanding obligations confirmed as valid under its supplier finance programs is as
follows:
December 28,
2024
Confirmed obligations outstanding at the beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
108,499
Invoices confirmed during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
560,794
Confirmed invoices paid during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(562,750)
Confirmed obligations outstanding at the end of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
106,543
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-33
(13) Debt
A summary of the Company’s debt is presented below:
Interest Rate as
of December 28,
2024
Principal Amount
December 28,
2024
December 30,
2023
Maturity Date
Senior Secured Credit Facility:
Revolving Loan Facility . . . . . . . . . . . . . . . . . . . . .
—
$
— $
— November 2026
Term Loan A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.42%
403,070
937,500 November 2026
Term Loan B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.32%
300,197
893,250 March 2030
9.000% Senior Notes . . . . . . . . . . . . . . . . . . . . . . . . . .
9.00%
600,000
600,000 February 2031
4.875% Senior Notes . . . . . . . . . . . . . . . . . . . . . . . . . .
4.88%
900,000
900,000 May 2026
Accounts Receivable Securitization Facility . . . . . . . .
6.68%
95,000
6,000 May 2025
2,298,267
3,336,750
Less long-term debt issuance costs and debt discount .
17,210
36,110
Less current maturities . . . . . . . . . . . . . . . . . . . . . . . . .
95,000
65,000
$
2,186,057 $
3,235,640
As of December 28, 2024 the Company’s primary financing arrangements were the senior secured credit facility (the
“Senior Secured Credit Facility”), 9.000% senior notes (the “9.000% Senior Notes”), 4.875% senior notes (the “4.875% Senior
Notes”) and the accounts receivable securitization facility (the “ARS Facility”). The outstanding balances at December 28,
2024 and December 30, 2023 are reported in the “Accounts Receivable Securitization Facility”, “Current portion of long-term
debt” and “Long-term debt” lines in the Consolidated Balance Sheets.
Senior Secured Credit Facility
The $1,000,000 Revolving Loan Facility, a portion of which is available to be borrowed in Euros or Australian dollars, is
used for general corporate purposes and working capital needs. All borrowings under the Revolving Loan Facility may be
repaid and reborrowed from time to time without penalty but must be repaid in full upon maturity. A portion of the Revolving
Loan Facility is available for the issuances of letters of credit and the making of swingline loans, and any such issuance of
letters of credit or making of a swingline loan will reduce the amount available under the Revolving Loan Facility. As of
December 28, 2024, the Company had $996,743 of borrowing availability under the Revolving Loan Facility after taking into
account $3,257 of standby and trade letters of credit issued and outstanding under this facility.
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-34
In November 2023, given the continuing uncertain economic environment and the associated potential impact on future
earnings, the Company amended the credit agreement governing the Senior Secured Credit Facility prior to any potential future
covenant violation in order to modify the financial covenants and to provide greater strategic financial flexibility. The
November 2023 amendment effected changes to certain provisions and covenants under the Senior Secured Credit Facility,
including changes to certain covenants and provisions that were previously amended in November 2022 and February 2023,
during the period beginning with the fiscal quarter ending December 30, 2023 and continuing through the fiscal quarter ending
September 27, 2025, or such earlier date as the Company may elect (such period of time, the “Extended Covenant Relief
Period”), including: (a) an extension of the original Covenant Relief Period from March 30, 2024 to September 27, 2025; (b) an
increase in the maximum leverage ratio to 6.75 to 1.00 for the quarters ending December 30, 2023 and March 30, 2024, 6.63 to
1.00 for the quarters ending June 29, 2024 and September 28, 2024, 6.38 to 1.00 for the quarter ending December 28, 2024,
5.63 to 1.00 for the quarter ending March 29, 2025, 5.25 to 1.00 for the quarter ending June 28, 2025, and 5.00 to 1.00 for the
quarter ending September 27, 2025, reverting back to 4.50 to 1.00 for each quarter after the Extended Covenant Relief Period
has ended; and (c) a reduction of the minimum interest coverage ratio to 1.63 to 1.00 for the quarters ending December 30,
2023 through September 28, 2024, 1.75 to 1.00 for the quarter ending December 28, 2024, 2.00 to 1.00 for the quarter ending
March 29, 2025, 2.25 to 1.00 for the quarter ending June 28, 2025, and 2.50 to 1.00 for the quarter ending September 27, 2025
and each quarter after the Extended Covenant Relief Period has ended. The November 2023 amendment also included the
following additional baskets and restrictions: (a) an additional basket for permitted asset sales of $60,000; (b) suspended the
Company’s reinvestment rights with respect to net proceeds in respect of certain asset sales (including the additional asset sale
basket described in (a) above) and casualty and condemnation events (requiring the Company to prepay the credit agreement
term loan obligations with such net proceeds, subject to step-downs for such prepayment requirement based on the leverage
ratio); (c) reduced the cap on the Company’s general lien basket from $165,000 to $85,000 during the Extended Covenant
Relief Period; (d) reduced the maximum amount for incremental facilities secured by a lien to $100,000 during the Extended
Covenant Relief Period; and (e) suspended the payment of annual dividends during the Extended Covenant Relief Period,
which will revert back to the greater of (x) $350,000 and (y) 8.0% of Total Tangible Assets after the Extended Covenant Relief
Period has ended. In addition, the November 2023 amendment increased the applicable interest rate margins and commitment
fee rates based on the leverage ratio during the Extended Covenant Relief Period.
In 2024, the Company paid down $1,127,483 of its outstanding term debt under the Senior Secured Credit Facility, of
which $1,083,233 was a result of accelerated debt payments using a combination of cash generated from operations and net sale
proceeds from the Initial Closing of the sale of the global Champion business, which was completed on September 30, 2024.
See Note “Assets and Liabilities of Businesses Held for Sale” for additional information.
Prior to the November 2023 amendment, the Company amended the Senior Secured Credit Facility in November 2022
and February 2023. These prior amendments included changes to certain provisions and covenants under the Senior Secured
Credit Facility that were extended to September 27, 2025 but otherwise were not impacted by the November 2023 amendment,
including: (a) suspension of restricted payments in connection with share repurchases; (b) suspension of restricted payments
pursuant to the Company's leverage ratio-based and "Available Amount" restricted payments baskets; (c) suspension of the
Company’s “Available Amount” basket for investments in foreign subsidiaries and other investments; (d) suspension of the
0.50 to 1.00 increase in the maximum permitted consolidated net total leverage ratio resulting from a material permitted
acquisition; and (e) the addition of two new tiers to the top of the pricing grid if the maximum consolidated net total leverage
ratio exceeds 5.00 to 1.00 and 5.50 to 1.00. In addition, the November 2022 amendment permanently transitioned the Senior
Secured Credit Facility from the LIBOR to the Secured Overnight Financing Rate (“SOFR”) with a 10 basis point credit spread
adjustment already included in the Senior Secured Credit Facility.
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-35
Borrowings under the Senior Secured Credit Facility bear interest at a variable rate based on, at the Company’s option,
either the SOFR or an alternative base rate (both as defined in the Senior Secured Credit Facility), or the appropriate SOFR
benchmark for non-U.S. dollar borrowings, plus, in each case, an applicable margin that is based on the Company’s leverage
ratio (as defined in the Senior Secured Credit Facility). Interest is payable quarterly for base rate loans, but the Company has the
option to pay interest on a more frequent, or less frequent, basis for SOFR-based loans. The applicable margin was 1.750% plus
a 10 basis point credit spread adjustment for SOFR-based loans and 0.75% for base rate loans as of December 28, 2024. During
the Extended Covenant Relief Period, the applicable margin ranges from a maximum of 2.75% in the case of SOFR-based loans
and 1.75% in the case of base rate loans if the Company’s leverage ratio is greater than or equal to 5.50 to 1.00, and steps down
in varying increments to a minimum of 1.25% in the case of SOFR-based loans and 0.25% in the case of base rate loans if the
Company’s leverage ratio is less than 2.25 to 1.00. After the Extended Covenant Relief Period has ended, the applicable margin
will range from a maximum of 1.75% in the case of SOFR-based loans and 0.75% in the case of base rate loans if the
Company’s leverage ratio is greater than or equal to 4.50 to 1.00, and steps down in varying increments to a minimum of 1.00%
in the case of SOFR-based loans and 0.00% in the case of base rate loans if the Company’s leverage ratio is less than 2.25 to
1.00.
The commitment fee for the unused portion of the Revolving Loan Facility, which is based on the Company’s leverage
ratio (as defined in the Senior Secured Credit Facility, as amended), was 0.275% as of December 28, 2024. During the
Extended Covenant Relief Period, the commitment fee ranges from a maximum of 0.425% if the Company’s leverage ratio is
greater than or equal to 5.50 to 1.00, and steps down in varying increments to a minimum of 0.175% if the Company’s leverage
ratio is less than 2.25 to 1.00. After the Extended Covenant Relief Period has ended, the commitment fee will range from a
maximum of 0.25% if the Company’s leverage ratio is greater than or equal to 4.50 to 1.00, and steps down in varying
increments to a minimum of 0.15% if the Company’s leverage ratio is less than 2.25 to 1.00.
Subject to restrictions in the Senior Secured Credit Facility, which was amended in November 2022, February 2023 and
November 2023, the Company may add one or more tranches of term loans or increase the commitments under the Revolving
Loan Facility after the Extended Covenant Relief Period has ended so long as certain conditions are satisfied, including, among
others, that no default or event of default is in existence, the Company is in pro forma compliance with the financial covenants
set forth in the Senior Secured Credit Facility and the Company’s senior secured leverage ratio is not greater than 3.50 to 1.00
on a pro forma basis after giving effect to the incurrence of such indebtedness.
The Senior Secured Credit Facility is guaranteed by substantially all of the Company’s existing and future direct and
indirect U.S. subsidiaries and certain foreign subsidiaries, with certain customary or agreed-upon exceptions for certain
subsidiaries. The Senior Secured Credit Facility is secured by the equity interests of substantially all of the Company’s direct
and indirect U.S. subsidiaries and 65% of the voting securities of certain first tier foreign subsidiaries and substantially all
present and future property and assets of the Company and each guarantor, except for certain enumerated interests.
The Senior Secured Credit Facility requires the Company to comply with customary affirmative, negative and financial
covenants. The financial covenants include a minimum interest coverage ratio and a maximum total debt to EBITDA (earnings
before interest, income taxes, depreciation expense and amortization, as computed pursuant to the Senior Secured Credit
Facility), or leverage ratio, each of which is defined in the Senior Secured Credit Facility. The method of calculating all of the
components used in the covenants, is included in the Senior Secured Credit Facility.
The Senior Secured Credit Facility contains customary events of default, including nonpayment of principal when due;
nonpayment of interest, fees or other amounts after stated grace period; material inaccuracy of representations and warranties;
violations of covenants; certain bankruptcies and liquidations; any cross-default to material indebtedness; certain material
judgments; certain events related to the ERISA, actual or asserted invalidity of any guarantee, security document or
subordination provision or non-perfection of security interest, and a change in control (as defined in the Senior Secured Credit
Facility).
As of December 28, 2024, the Company was in compliance with all financial covenants related to the Senior Secured
Credit Facility. The Company expects to maintain compliance with its financial covenants, as amended in November 2023, for
at least 12 months from the issuance of these financial statements based on its current expectations and forecasts.
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-36
2023 Refinancing
In February and March 2023, the Company refinanced its debt structure to provide greater near-term financial flexibility
given the uncertainty within the global macroeconomic environment. The 2023 refinancing consisted of entering into a new
senior secured term loan B facility in an aggregate principal amount of $900,000 due in 2030 (the “2023 Term Loan B”),
issuing $600,000 aggregate principal amount of the 9.000% Senior Notes and redeeming the Company’s 4.625% senior notes
due in May 2024 (the “4.625% Senior Notes”) and 3.5% senior notes due in June 2024 (the “3.5% Senior Notes”).
The Company used the net proceeds from borrowings under the 2023 Term Loan B together with the net proceeds from
the offering of the 9.000% Senior Notes to redeem all of its outstanding 4.625% Senior Notes and 3.5% Senior Notes and pay
the related fees and expenses which resulted in total charges of $8,466. The charges, which are recorded in the “Other
expenses” line in the Consolidated Statements of Operations, included a payment of $4,632 for a required make-whole
premium related to the redemption of the 3.5% Senior Notes, a non-cash charge of $1,654 for the write-off of unamortized debt
issuance costs related to the redemption of the 3.5% Senior Notes and a non-cash charge of $2,180 for the write-off of
unamortized debt issuance costs related to the redemption of the 4.625% Senior Notes. The 2023 refinancing activities resulted
in a debt discount of $9,000 related to the 2023 Term Loan B and total capitalized debt issuance costs of $22,991, which
included $11,917 related to the 2023 Term Loan B and $11,074 related to the 9.000% Senior Notes. The debt discount and debt
issuance costs are amortized into interest expense over the respective terms of the debt instruments. The cash payments for the
make-whole premium and fees capitalized as debt issuance costs are reported in “Net cash from financing activities” in the
Consolidated Statements of Cash Flows.
The issuance of the 2023 Term Loan B resulted in proceeds, net of the debt discount of $9,000 and debt issuance costs of
$11,917, of approximately $879,083. The 2023 Term Loan B bears interest based on the SOFR plus an applicable margin of
3.75%, subject to a floor of 0.50%. The 2023 Term Loan B Facility is guaranteed by each domestic subsidiary of the Company
which guarantees the other facilities under the Senior Secured Credit Facility (the “U.S. Subsidiary Guarantors”) and is secured
by substantially all of the assets of the Company and the U.S. Subsidiary Guarantors, on a pari passu basis with the other
facilities under the Senior Secured Credit Facility. Outstanding borrowings under the 2023 Term Loan B are repayable in
0.25% quarterly installments, with the remainder of the outstanding principal to be repaid at maturity. If the 2023 Term Loan B
is repriced or refinanced on or prior to the six month anniversary of its funding and as a result of such repricing or refinancing
the effective interest rate of the 2023 Term Loan B decreases, the Company shall be required to pay a prepayment fee equal to
1.0% of the aggregate principal amount of the 2023 Term Loan B subject to such repricing or refinancing. Additionally, the
Company is required to prepay any outstanding amounts in connection with (i) the incurrence of certain indebtedness and (ii)
non-ordinary course asset sales or other dispositions (including as a result of casualty or condemnation) that exceed certain
thresholds in any period of twelve-consecutive months, with customary reinvestment provisions. The 2023 Term Loan B also
requires the Company, as applicable, to prepay any outstanding term loans under the 2023 Term Loan B in connection with
excess cash flow, which percentage will be based upon the Company’s leverage ratio during the relevant fiscal period. All such
prepayments will be made on a pro rata basis under each of the applicable term loans that are subject to such prepayments. The
2023 Term Loan B matures on March 8, 2030.
9.000% Senior Notes
In February 2023, the Company issued $600,000 aggregate principal amount of 9.000% Senior Notes, with interest
payable on February 15 and August 15 of each year. The issuance of the 9.000% Senior Notes resulted in proceeds, net of debt
issuance costs of $11,074, of approximately $588,926. The 9.000% Senior Notes mature on February 15, 2031.
Prior to February 15, 2026, the Company has the right to redeem all or of a portion of the 9.000% Senior Notes at a
redemption price equal to 100% of the principal amount plus a “make-whole” premium and accrued and unpaid interest, if any,
to, but excluding, the redemption date. In addition, prior to February 15, 2026, the Company may on any one or more occasions
redeem up to 40% of the notes with the net proceeds from certain equity offerings at a redemption price equal to 109.000% of
the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. On and after
February 15, 2026, the Company has the right to redeem all or a portion of the 9.000% Senior Notes, at the redemption prices
set forth in the indenture governing the 9.000% Senior Notes, plus accrued and unpaid interest, if any, to, but excluding, the
redemption date. In the event of a change of control of the Company and a rating downgrade, the Company will be required to
offer to repurchase all outstanding 9.000% Senior Notes at a purchase price in cash equal to 101% of the principal amount, plus
accrued and unpaid interest, if any, to, but excluding, the repurchase date.
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-37
The 9.000% Senior Notes are senior unsecured obligations of the Company and are guaranteed by the Company and
certain of its domestic subsidiaries that guarantee its credit facilities and certain other material indebtedness. The indenture
limits the ability of the Company and its subsidiaries to incur liens, enter into certain sale and leaseback transactions and
consolidate, merge or sell all or substantially all of their assets and contains customary covenants and events of default. The
9.000% Senior Notes were issued in a transaction exempt from registration under the Securities Act of 1933 and do not require
disclosure of separate financial information for the guarantor subsidiaries.
4.875% Senior Notes and 4.625% Senior Notes
In May 2016, the Company issued $900,000 aggregate principal amount of 4.875% Senior Notes and $900,000 aggregate
principal amount of 4.625% Senior Notes (collectively, the “USD Senior Notes”), with interest payable on May 15 and
November 15 of each year. The issuance of the USD Senior Notes resulted in net proceeds of approximately $1,773,000, which
were used to redeem in full the Company’s 6.375% Senior Notes and reduce the outstanding borrowings under the Revolving
Loan Facility.
The 4.625% Senior Notes, which were scheduled to mature in May 2024, were redeemed in full in March 2023 in
connection with the 2023 refinancing described above.
The 4.875% Senior Notes will mature in May 2026. On or after February 15, 2026, the Company may redeem all or a
portion of the 4.875% Senior Notes at a price equal to 100% of the principal amount, plus any accrued and unpaid interest.
The 4.875% Senior Notes are senior unsecured obligations of the Company and are fully and unconditionally guaranteed,
subject to certain exceptions, by substantially all of the Company’s current domestic subsidiaries. The indenture limits the
ability of the Company and its subsidiaries to incur liens, enter into certain sale and leaseback transactions and consolidate,
merge or sell all or substantially all of their assets and contains customary covenants and events of default.
The 4.875% Senior Notes were issued in a transaction exempt from registration under the Securities Act and do not
require disclosure of separate financial information for the guarantor subsidiaries.
3.5% Senior Notes
In June 2016, the Company issued €500,000 aggregate principal amount of 3.5% Senior Notes, with interest payable on
June 15 and December 15 of each year. The issuance of the 3.5% Senior Notes resulted in net proceeds of approximately
€492,500, which were used to fund a portion of the acquisition of Champion Europe and Hanes Australasia.
The 3.5% Senior Notes, which were scheduled to mature in June 2024, were redeemed in full in February 2023 in
connection with the 2023 refinancing described above.
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-38
ARS Facility
Borrowing availability under the ARS Facility, which was entered into in November 2007, was subject to a quarterly
fluctuating facility limit ranging from $200,000 in the first and second quarters in 2024 to $225,000 in the third and fourth
quarters in 2024 until the ARS Facility was amended in September 2024 at which time the quarterly fluctuating facility limit
was reduced to $175,000 in the fourth quarter of 2024 and $125,000 thereafter until the expiration date in May 2025. ARS
Facility borrowings are permitted only to the extent that the face value of the receivables in the collateral pool, net of applicable
concentrations, reserves and other deductions, exceeds the outstanding loans. The Company also amended the ARS facility in
June 2022, June 2023 and May 2024. The June 2022 amendment extended the maturity date to June 2023 and changed the
Company’s interest rate option as defined in the ARS Facility from the rate announced from time to time by PNC Bank, N.A. as
its prime rate or the LIBOR to the rate announced from time to time by PNC Bank, N.A. as its prime rate or the SOFR and
increased certain receivables to the pledged collateral pool for the facility. The June 2023 amendment extended the maturity
date to May 2024 and created two pricing tiers based on a consolidated net total leverage ratio of 4.50 to 1.00. The May 2024
amendment extended the maturity date to May 2025 with no change to the quarterly fluctuation facility limit. Additionally, the
amendment removed the two pricing tiers that were added in the previous amendment, reverting back to a single tier pricing
structure. As of December 28, 2024, the quarterly fluctuating facility limit was $175,000, the maximum borrowing capacity was
$126,686 and the Company had $31,686 of borrowing availability under the ARS Facility.
Under the terms of the ARS Facility, the Company and certain of its subsidiaries sell or otherwise assign, on an ongoing
basis, certain domestic trade receivables to HBI Receivables LLC (“Receivables LLC”), a wholly owned bankruptcy-remote
subsidiary that in turn pledges the trade receivables to secure the borrowings, which are funded through conduits and financial
institutions that are not affiliated with the Company. Funding under the ARS Facility is received either from conduits party to
the ARS Facility through the issuance of commercial paper in the short-term market or through committed bank purchasers.
The assets and liabilities of Receivables LLC are fully reflected on the Consolidated Balance Sheets, and the securitization is
treated as a secured borrowing by Receivables LLC from the third-party conduits and financial institutions party thereto for
accounting purposes, but the assets of Receivables LLC will be used solely to satisfy the creditors of Receivables LLC, not the
Company’s other creditors. The borrowings under the ARS Facility remain outstanding throughout the term of the agreement
subject to Receivables LLC maintaining sufficient eligible receivables, by continuing to acquire trade receivables from the
Company and certain of its subsidiaries, unless an event of default occurs.
Availability of funding under the ARS Facility depends primarily upon the eligible outstanding receivables balance. The
outstanding balance under the ARS Facility is reported on the Consolidated Balance Sheets in the line “Accounts Receivable
Securitization Facility.” In the case of any creditors party to the ARS Facility that are conduits, the yield on the commercial
paper, which is the conduits’ cost to issue the commercial paper plus certain dealer fees, is considered a financing cost and is
included in the “Interest expense, net” line in the Consolidated Statements of Operations. In the case of any creditors party to
the ARS Facility that are committed bank purchasers, the interest rate would be payable at the Company’s option at the rate
announced from time to time by PNC Bank, N.A. as its prime rate or at the SOFR (as defined in the ARS Facility) plus the
applicable margin in effect from time to time. If the SOFR (as defined in the ARS Facility) is unavailable or otherwise does not
accurately reflect the costs to these creditors related to the borrowings, the interest rate would generally default to the prime
rate. These amounts are also considered financing costs and are included in the “Interest expense, net” line in the Consolidated
Statements of Operations. In addition, Receivables LLC is required to make certain indemnity and other payments to a conduit
purchaser, a committed purchaser, or certain entities that provide funding to or are affiliated with them, including in the event
that assets and liabilities of a conduit purchaser subject to the ARS Facility are consolidated for financial and/or regulatory
accounting purposes with certain other entities.
The ARS Facility contains customary events of default and requires the Company to maintain the same interest coverage
ratio and leverage ratio contained from time to time in the Senior Secured Credit Facility, provided that any changes to such
covenants will only be applicable for purposes of the ARS Facility if approved by the managing agents or their affiliates. As of
December 28, 2024, the Company was in compliance with all financial covenants.
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-39
Other
The Company had $3,477 of borrowing capacity under other international credit facilities after taking into account
outstanding borrowings at December 28, 2024. The Company had $8,474 of international letters of credit outstanding at
December 28, 2024. Available liquidity for other international credit facilities is reduced for any outstanding international
letters of credit. The international letters of credit are not outstanding under any specific credit facility and do not reduce actual
borrowing capacity under the specific credit facilities.
Future Principal Payments
Future principal payments for all of the facilities described above are as follows: $95,000 due in 2025, $1,303,070 due in
2026, no payments due in 2027, 2028, and 2029 and $900,197 due thereafter.
Cash Paid for Interest
Total cash paid for interest related to debt in 2024, 2023 and 2022 was $239,864, $260,257 and $150,452, respectively.
Debt Issuance Costs
During 2024, 2023 and 2022, the Company paid $783, $35,388 and $3,159, respectively, in capitalized debt issuance
costs related to the Company’s financing arrangements within continuing operations. Debt issuance costs are amortized to
interest expense over the respective lives of the debt instruments, which range from one to 10 years. As of December 28, 2024,
the net carrying value of unamortized debt issuance costs for the revolving loan facilities, which is included in “Other
noncurrent assets” in the Consolidated Balance Sheets, was $4,290 and the net carrying value of unamortized debt issuance
costs for the remainder of the Company’s debt, which is included in “Long-term debt” in the Consolidated Balance Sheets was
$17,210. The Company’s debt issuance cost amortization in continuing operations was $12,535, $8,939 and $7,300 in 2024,
2023 and 2022, respectively.
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-40
(14) Defined Benefit Pension Plans
At December 28, 2024, the Company’s pension plans consisted of the U.S. pension plans, which includes the
Hanesbrands Inc. Legacy Pension Plan and the Hanesbrands Inc. Pension Plan (together, the “U.S. Pension Plans”), various
nonqualified retirement plans and international plans, which include certain defined benefit plans acquired in connection with
the purchase of Hanes Australasia. Benefits under the U.S. Pension Plans were frozen effective December 31, 2005. Effective
December 1, 2022, the Company spun-off the majority of participants in the Hanesbrands Inc. Pension Plan into a new, separate
plan, the Hanesbrands Inc. Legacy Pension Plan with a small number of participants remaining in the Hanesbrands Inc. Pension
Plan.
The components of net periodic benefit cost and other amounts recognized in other comprehensive loss of the Company’s
noncontributory defined benefit pension plans were as follows:
Years Ended
December 28,
2024
December 30,
2023
December 31,
2022
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
423 $
397 $
626
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
42,541
44,870
27,631
Expected return on assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(46,734)
(54,197)
(49,189)
Settlement cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,430
—
—
Amortization of:
Prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7)
(6)
(6)
Net actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15,965
16,672
20,959
Net periodic benefit cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
13,618 $
7,736 $
21
Other Changes in Plan Assets and Benefit Obligations Recognized in
Other Comprehensive Loss
Net gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(29,391) $
(16,996) $
(129,399)
Prior service credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
6
6
Total gain recognized in other comprehensive loss . . . . . . . . . . . . . . . . . .
(29,384)
(16,990)
(129,393)
Total recognized in net periodic benefit cost and other comprehensive
loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(15,766) $
(9,254) $
(129,372)
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-41
The funded status of the Company’s defined benefit pension plans at the respective year ends was as follows:
December 28,
2024
December 30,
2023
Benefit obligation:
Beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
914,398 $
919,334
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
423
397
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
42,541
44,870
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(102,304)
(62,815)
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(13,740)
—
Impact of exchange rate change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,117)
639
Actuarial (gain) loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(45,959)
12,018
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(20)
(45)
End of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
794,222
914,398
Fair value of plan assets:
Beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
822,360
816,244
Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12,606
66,627
Employer contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16,338
1,603
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(102,304)
(62,815)
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(13,740)
—
Impact of exchange rate change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,385)
746
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(20)
(45)
End of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
733,855
822,360
Funded status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(60,367) $
(92,038)
In 2024, the Company purchased an annuity contract to transfer $40,409 of the U.S. Pension Plans’ gross defined benefit
pension obligations and related plan assets to an insurance company for approximately 3,900 retirees and beneficiaries. The
annuity contract was purchased using assets from the U.S. Pension Plans and no additional funding contribution was required.
This transaction had no impact on the amount, timing, or form of the monthly retirement benefit payments to the affected
retirees or beneficiaries. The transaction did not trigger settlement accounting under FASB ASC 715 - “Compensation -
Retirement Benefits.”
The actuarial gain in 2024 included in benefit obligations was primarily driven by increases in the U.S. discount rate
assumptions. The actuarial loss in 2023 included in benefit obligations was primarily driven by decreases in the U.S. discount
rate assumptions.
As most of the Company’s pension plans are frozen, the accumulated benefit obligation (“ABO”) approximates the
benefit obligation. The total benefit obligation and the benefit obligation and fair value of plan assets for the Company’s
pension plans with benefit obligations in excess of plan assets are as follows:
December 28,
2024
December 30,
2023
Benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
794,222 $
914,398
Plans with benefit obligation in excess of plan assets:
Benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
787,062
892,163
Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
722,570
795,765
Amounts recognized in the Company’s Consolidated Balance Sheets consist of:
December 28,
2024
December 30,
2023
Other noncurrent assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
4,124 $
4,361
Accrued liabilities and other: Payroll and employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,378)
(1,452)
Pension and postretirement benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(63,113)
(94,947)
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(393,757)
(423,141)
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-42
Amounts recognized in accumulated other comprehensive loss consist of:
December 28,
2024
December 30,
2023
Prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(118) $
(125)
Actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
393,875
423,266
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
393,757 $
423,141
(a) Measurement Date and Assumptions
A December 31 measurement date is used to value plan assets and obligations for the pension plans. In determining the
discount rate, the Company utilizes a full yield curve approach in the calculation of the plan obligation and interest cost and
service cost components of net periodic benefit cost. The specific spot rates along the yield curve are applied to the relevant
projected cash flows, and single equivalent discount rates are shown for disclosure purposes. The expected long-term rate of
return on plan assets was based on the Company’s investment policy target allocation of the asset portfolio among various asset
classes and the expected real returns of each asset class over various periods of time. The weighted average actuarial
assumptions used in measuring the net periodic benefit cost and plan obligations for the periods presented were as follows:
December 28,
2024
December 30,
2023
December 31,
2022
Net periodic benefit cost:
Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.98 %
5.18 %
2.90 %
Long-term rate of return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.94
6.94
5.24
Rate of compensation increase(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.25
3.24
3.25
Interest crediting rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.50
5.50
5.50
Plan obligations:
Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.63 %
4.98 %
5.18 %
Rate of compensation increase(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.33
3.25
3.24
Interest crediting rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.50
5.50
5.50
(1)
For December 28, 2024, December 30, 2023 and December 31, 2022, the compensation assumption only applies to certain international
plans as the benefits of the U.S. pension plans are now all frozen.
(b) Plan Assets, Expected Benefit Payments, and Funding
The allocation of pension plan assets as of the respective period end measurement dates is as follows:
U.S. equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22
21
Foreign equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17
22
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
7
Hedge fund of funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
9
Cash and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
1
December 28,
2024
December 30,
2023
Asset category:
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
53 %
40 %
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-43
The Company’s asset strategy and primary investment objective are to maximize the principal value of the plan assets to
meet current and future benefit obligations to plan participants and their beneficiaries. To accomplish this goal, the assets of the
plan are broadly diversified to protect against large investment losses and to reduce the likelihood of excessive volatility of
returns and funded status. Diversification of assets is achieved through strategic allocations to various asset classes, as well as
various investment styles within these asset classes, and by retaining multiple, third-party investment management firms with
complementary investment styles and philosophies to implement these allocations. The Company has established a target asset
allocation based upon analysis of risk/return trade-offs and correlations of asset mixes given long-term historical data,
prospective capital market returns and forecasted liabilities of the plans. The target asset allocation approximates the actual
asset allocation as of December 28, 2024. In addition to volatility protection, diversification enables the assets of the plan the
best opportunity to provide adequate returns in order to meet the Company’s investment return objectives. These objectives
include, over a rolling five-year period, to achieve a total return that exceeds the required actuarial rate of return for the plan
and to outperform a passive portfolio, consisting of a similar asset allocation.
The Company utilizes market data or assumptions that market participants would use in pricing the pension plan assets.
The Level 1 assets consisted primarily of certain U.S. equity securities, foreign equity securities and cash and cash equivalents.
Certain U.S. equity securities, foreign equity securities and debt securities are measured at their net asset value, which is
determined based on inputs readily available in public markets, and investments in hedge funds of funds and real estate
investments that are based on unobservable inputs about which little or no market data exists and are measured at a net asset
value. Assets valued utilizing a net asset value are not required to be categorized within the fair value hierarchy.
Refer to Note “Fair Value of Assets and Liabilities” for the Company’s complete disclosure of the fair value of pension
plan assets.
Expected benefit payments are as follows: $61,604 in 2025, $62,357 in 2026, $62,949 in 2027, $62,558 in 2028, $62,485
in 2029 and $306,624 in 2030 through 2034.
The Company expects to make required cash contributions of $12,000 to its U.S. Pension Plans in 2025 based on a
preliminary calculation by its actuary. The Company made total cash contributions of $15,000 to its U.S Pension Plans in 2024,
of which $10,000 were required. The Company made no cash contributions to its U.S. Pension Plans in 2023.
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-44
(15) Income Taxes
The Company recognized income (loss) from continuing operations before income taxes of $(57,394), $14,330, and
$127,344 for the years 2024, 2023 and 2022, respectively. The provision for income tax expense (benefit) computed by
applying the U.S. statutory rate to income (loss) from continuing operations before income taxes as reconciled to the actual
provisions was:
Years Ended
December 28,
2024
December 30,
2023
December 31,
2022
Income (loss) from continuing operations before income taxes:
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
631.0 %
(1,997.0) %
(161.9) %
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(531.0)
2,097.0
261.9
100.0 %
100.0 %
100.0 %
Tax expense at U.S. statutory rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21.0 %
21.0 %
21.0 %
State income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5.6)
(85.0)
(8.0)
Tax on actual and planned remittances of foreign earnings . . . . . . . . . . . . . .
(11.9)
71.9
(4.5)
Tax on foreign earnings (U.S. tax reform - GILTI and FDII) . . . . . . . . . . . .
(79.7)
90.8
7.6
Foreign taxes less than U.S. statutory rate . . . . . . . . . . . . . . . . . . . . . . . . . . .
97.4
(248.6)
(36.5)
Statutory stock deduction and other foreign adjustments(1) . . . . . . . . . . . . . .
—
(593.0)
62.3
Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(8.5)
25.3
2.8
Changes in valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
66.1
610.1
294.2
OECD BEPS Pillar 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(11.1)
—
—
Transaction costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(23.3)
—
—
Intellectual property migration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(67.7)
—
—
Release of unrecognized tax benefit reserves . . . . . . . . . . . . . . . . . . . . . . . . .
(10.4)
6.7
(2.0)
Tax rate change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(20.0)
(13.2)
8.7
Tax provision adjustments and revisions to prior years' returns . . . . . . . . . . .
(19.1)
23.3
9.9
Nondeductible expenses and tax exempt income, net . . . . . . . . . . . . . . . . . .
0.2
(0.7)
(3.0)
Domestic income tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.8
(17.0)
(1.5)
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1.9)
5.0
0.7
Taxes at effective worldwide tax rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(70.7) %
(103.4) %
351.7 %
(1) In 2022, the Company recorded a deferred tax liability related to tax impairments of subsidiary stock in Switzerland which created a net
operating loss carryforward. Pursuant to Swiss tax law, the loss created is subject to recapture for which a deferred tax liability was
recorded in excess of the deferred tax asset in 2022. During 2023, the deferred tax liability related to the recapture amount from 2022 was
reversed, resulting in a tax benefit.
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-45
Current and deferred tax provisions (benefits) were:
Current
Deferred
Total
Year ended December 28, 2024
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(11,885) $
6,430 $
(5,455)
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
55,814
(18,533)
37,281
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,117
3,658
8,775
$
49,046 $
(8,445) $
40,601
Year ended December 30, 2023
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
19,356 $
29 $
19,385
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
54,274
(89,325)
(35,051)
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
848
—
848
$
74,478 $
(89,296) $
(14,818)
Year ended December 31, 2022
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
11,757 $
201,112 $
212,869
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
50,862
97,755
148,617
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4,751)
91,154
86,403
$
57,868 $
390,021 $
447,889
Years Ended
December 28,
2024
December 30,
2023
December 31,
2022
Cash payments for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
61,501 $
92,937 $
95,331
Of the cash payments for income taxes, $52,089, $75,882 and $74,397 relate to continuing operations for 2024, 2023 and
2022, respectively.
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-46
The deferred tax assets and liabilities at the respective year-ends were as follows:
December 28,
2024
December 30,
2023
Deferred tax assets:
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
79,746 $
79,697
Bad debt allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,379
6,923
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,969
6,664
Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41,248
43,684
Tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26,471
18,483
Net operating loss and other tax carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
688,820
497,456
Leasing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
74,517
100,696
Interest carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
124,018
94,204
Capitalized research costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20,451
18,813
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12,978
3,121
Gross deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,085,597
869,741
Less valuation allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(684,007)
(729,247)
Less FIN48 / NOL Offset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(27,921)
(10,543)
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
373,669
129,951
Deferred tax liabilities:
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,249
296
Property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,589
9,498
Leasing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
60,228
87,774
Accrued tax on unremitted foreign earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
31,159
29,138
Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
59,696
17,903
Statutory impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
224,361
5,849
Prepaids . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,810
99
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
387,092
150,557
Net deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(13,423) $
(20,606)
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some
portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the
generation of future taxable income during the periods in which those temporary differences become deductible. Management
considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in
making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the
periods which the deferred tax assets are deductible, the Company believes it is more likely than not it will realize the benefits
of these deductible differences, net of the existing valuation allowances.
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-47
The changes in the Company’s valuation allowance for deferred tax assets were as follows:
January 1, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
304,913
Charged to income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
343,386
Charged to other accounts(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(36,421)
December 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
611,878
Charged to income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
119,953
Charged to other accounts(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2,584)
December 30, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
729,247
Charged to income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(39,098)
Charged to other accounts(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6,142)
December 28, 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
684,007
(1)
Charges to other accounts include the effects of foreign currency translation and changes to valuation allowances as a result of
intraperiod tax allocations.
As of December 28, 2024, the valuation allowance for deferred tax assets was $684,007, made up of $311,409 for foreign
loss carryforwards, $26,049 for other foreign deferred tax assets, $88,705 for U.S. federal and state operating loss
carryforwards, and $257,844 for other U.S. federal and state deferred tax assets. The net change in the total valuation allowance
for 2024 was $45,240, which relates to an increase of $14,633 for foreign loss carryforwards, a decrease of $234 for other
foreign deferred tax assets, a decrease of $90,318 for U.S. federal and state operating loss carryforwards and an increase of
$30,679 for other U.S. federal and state deferred tax assets.
The domestic net decrease reflects a full valuation allowance recorded against U.S. federal and state deferred tax assets in
2024. As of December 28, 2024, the Company concluded that, based on its evaluation of all available positive and negative
evidence, its U.S. federal and state deferred tax assets were not more likely than not realizable. In making this determination,
the Company evaluated positive evidence, including its projections of future taxable income which demonstrate a long-term
return to profitability in the U.S., and negative evidence, including recent tax losses incurred and expected near term tax losses
in connection with its domestic operations and the lack of sufficient taxable temporary differences expected to reverse in future
periods, and determined that the negative evidence outweighed the positive.
At December 28, 2024, the Company had gross foreign net operating loss carryforwards of approximately $2,300,168 (on
a tax return basis) which are subject to expiration as follows:
Fiscal Year:
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
—
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
546
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
267
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,400
2029 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23,856
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,269,099
At December 28, 2024, the Company had domestic tax credit carryforwards totaling $26,141, which expire beginning
after 2024.
At December 28, 2024, the Company had gross U.S. federal, state and foreign interest carryforwards of approximately
$419,456, $240,396 and $91,493 (on a tax return basis), respectively, which carry forward indefinitely.
At December 28, 2024, the Company had gross U.S. federal and state net operating loss carryforwards of approximately
$327,478 and $1,295,402 (on a tax return basis), respectively, which expire beginning after 2024.
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-48
During 2022, the Company recorded $696,028 of additional foreign net operating losses due to tax-deductible
impairments in Switzerland and Luxembourg. These losses were subject to recapture in Switzerland and Luxembourg such that
they would have been taxable in a future year, therefore deferred tax liabilities were recorded in 2022. During 2023, actions
were taken by the Company related to the deferred tax liabilities for the losses subject to recapture in Switzerland and
Luxembourg. As a result, the deferred tax liabilities established in 2022 were reversed in 2023, resulting in an income tax
benefit of $85,122.
The Company has determined that a portion of the Company’s unremitted foreign earnings as of December 28, 2024,
totaling approximately $65,649, are not permanently reinvested abroad. The Company has additional foreign earnings totaling
$1,267,470 which are not permanently reinvested within its foreign structure, but which are permanently reinvested from a U.S.
perspective. The remainder of the Company’s foreign earnings will continue to be permanently reinvested to fund working
capital requirements and operations abroad. As of December 28, 2024, the Company has accrued $32,014 of income taxes with
respect to the foreign earnings the Company intends to remit in the future. These income tax effects include U.S. federal, state,
foreign and withholding tax implications in accordance with the planned remittance of such foreign earnings. An estimate of
income tax costs that may be incurred if the permanently reinvested portion of unremitted foreign earnings were in fact remitted
is impractical to calculate.
In 2024, 2023, and 2022, the Company recognized reductions of unrecognized tax benefits for tax positions of prior years
of $330, $483, and $311, respectively. In 2024, 2023, and 2022, income tax benefits recognized in connection with the
expiration of statutes of limitations were $20,506, $2,814, and $7,191, respectively. The Company believes it is reasonably
possible that the amount of unrecognized tax benefits may decrease by $20,339 within the next 12 months due to expirations in
statutes of limitations.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
Balance at January 1, 2022 (gross balance of $40,706) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
39,572
Adjustments related to prior year ending balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,138
Additions based on tax positions related to the current year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,857
Additions based on tax positions of prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
798
Lapse of statute of limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7,191)
Reductions for tax positions of prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(311)
Balance at December 31, 2022 (gross balance of $37,818) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
36,863
Additions based on tax positions related to the current year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,994
Additions based on tax positions of prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
646
Lapse of statute of limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2,814)
Reductions for tax positions of prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(483)
Balance at December 30, 2023 (gross balance of $38,156) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
37,206
Additions based on tax positions related to the current year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,156
Additions based on tax positions of prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24,458
Lapse of statute of limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(20,506)
Reductions for tax positions of prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(330)
Balance at December 28, 2024 (gross balance of $47,883)
$
45,984
At December 28, 2024, the balance of the Company’s unrecognized tax benefits, which would, if recognized, affect the
Company’s annual effective tax rate was $18,062. The Company’s policy is to recognize interest and/or penalties related to
income tax matters in income tax expense. The Company recognized $(4,475), $509 and $81 in 2024, 2023 and 2022,
respectively, for interest and penalties classified as income tax expense (benefit) in the Consolidated Statements of Operations.
At December 28, 2024 and December 30, 2023, the Company had a total of $2,324 and $6,805, respectively, of interest and
penalties accrued related to unrecognized tax benefits.
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-49
The Company files U.S. federal income tax returns, as well as separate and combined income tax returns in numerous
state and foreign jurisdictions. The Company remains subject to U.S. federal tax examinations for tax years 2019 through 2024.
The Company is also subject to examination by various state and international tax authorities. The tax years subject to
examination vary by jurisdiction. The Company regularly assesses the outcomes of both ongoing and future examinations for
the current or prior years to ensure the Company’s provision for income taxes is sufficient. The Company recognizes liabilities
based on estimates of whether additional taxes will be due and believes its reserves are adequate in relation to any potential
assessments. The outcome of any one examination, some of which may conclude during the next 12 months, is not expected to
have a material impact on the Company’s financial position or results of operations.
The Company operates in a Free Trade Zone governed and established by law in Costa Rica and the regulations
thereunder. During 2023, the Company received approval for the Free Trade Zone which cannot be arbitrarily revoked. The
Free Trade Zone will continue to be applicable so long as it continues to meet the legal obligations and commitments. This
resulted in a rate benefit of $44,000 and $45,000 for 2024 and 2023, respectively.
(16) Commitments and Contingencies
The Company is a party to various pending legal proceedings, claims and environmental actions by government agencies.
In accordance with the accounting rules for contingencies, the Company records a provision with respect to a claim, suit,
investigation or proceeding when it is probable that a liability has been incurred and the amount of the loss can reasonably be
estimated. Any provisions are reviewed at least quarterly and are adjusted to reflect the impact and status of settlements,
rulings, advice of counsel and other information pertinent to the particular matter. The recorded liabilities for these items were
not material to the consolidated financial statements of the Company in any of the years presented. Although the outcome of
such items cannot be determined with certainty, the Company’s legal counsel and management are of the opinion that the final
outcome of these matters will not have a material adverse impact on the consolidated financial position, results of operations or
liquidity.
Purchase Commitments
In the ordinary course of business, the Company has entered into purchase commitments for raw materials, production and
finished goods. These agreements, typically with terms ending within a year, require total payments of $240,398 in 2025.
License Agreements
The Company is party to several royalty-bearing license agreements for the use of third-party trademarks in certain of its
products. The license agreements typically require a minimum guarantee to be paid either at the commencement of the
agreement, by a designated date during the term of the agreement or by the end of the agreement period. When payments are
made in advance of when they are due, the Company records a prepayment and amortizes the expense in the “Cost of sales” line
in the Consolidated Statements of Operations uniformly over the guaranteed period. For guarantees required to be paid at the
completion of the agreement, royalties are expensed through the “Cost of sales” line in the Consolidated Statements of
Operations as the related sales are made. The Company has reviewed all license agreements and has concluded that there are no
liabilities recorded at inception of the agreements.
During 2024, 2023 and 2022, the Company incurred royalty expense of approximately $20,610, $23,004 and $23,882,
respectively.
Minimum amounts due under the license agreements are approximately $20,760 in 2025, $20,919 in 2026, $21,199 in
2027, $21,586 in 2028, $21,625 in 2029 and $5,525 thereafter.
(17) Stockholders’ Equity
The Company is authorized to issue up to 2,000,000 shares of common stock, par value $0.01 per share, and up to
50,000 shares of preferred stock, par value $0.01 per share, and the Company’s Board of Directors may, without stockholder
approval, increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series
that the Company is authorized to issue. At December 28, 2024 and December 30, 2023, 352,542 and 350,138 shares,
respectively, of common stock were issued and outstanding and no shares of preferred stock were issued or outstanding.
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-50
On February 2, 2022, the Company’s Board of Directors approved a new share repurchase program for up to $600,000 of
shares to be repurchased in open market transactions or privately negotiated transactions, subject to market conditions, legal
requirements and other factors. Additionally, management has been granted authority to establish a trading plan under Rule
10b5-1 of the Exchange Act in connection with share repurchases, which allows the Company to repurchase shares in the open
market during periods in which the stock trading window is otherwise closed for the Company, the Company’s directors and
certain of the Company’s officers and employees pursuant to the Company’s insider trading policy. The new program replaced
the Company’s previous share repurchase program for up to 40,000 shares that was originally approved on February 6, 2020.
The Company did not purchase any shares of the Company’s common stock under the February 6, 2020 share repurchase
program during 2022 through the expiration of the program on February 2, 2022. Under the new program, the Company entered
into transactions to repurchase 1,577 shares at a weighted average repurchase price of $15.84 per share for the year ended
December 31, 2022. The shares were repurchased at a total cost of $25,018 including broker’s commissions of $31. The
Company did not repurchase any shares under the new program during 2023 or during 2024 through the expiration of the
program on December 28, 2024. Share repurchases are currently prohibited under the Senior Secured Credit Facility. See Note
"Debt" for additional information.
Dividends
In 2022, the Company’s Board of Directors declared regular quarterly cash dividends of $0.15 per share of the Company’s
outstanding common stock, which were paid in 2022.
In January 2023, the Company’s Board of Directors eliminated the Company’s quarterly cash dividend as the Company
shifted its capital allocation strategy to focus the use of all its free cash flow (cash from operations less capital expenditures) on
reducing debt and bringing its leverage back to a range that is no greater than two to three times on a net debt-to-adjusted
EBITDA basis. The declaration of any future dividends and, if declared, the amount of any such dividends, will be subject to
the Company’s actual future earnings, capital requirements, regulatory restrictions, debt covenants, other contractual restrictions
and to the discretion of the Company’s Board of Directors. The payment of annual dividends is currently prohibited under the
Senior Secured Credit Facility. See Note "Debt" for additional information.
(18) Accumulated Other Comprehensive Loss
The components of AOCI are as follows:
Cumulative
Translation
Adjustment(1)
Cash Flow
Hedges
Defined Benefit
Plans
Income Taxes
Accumulated
Other
Comprehensive
Loss
Balance at December 31, 2022 . . . . . . . . $
(228,803) $
8,709 $
(437,353) $
145,439 $
(512,008)
Amounts reclassified from accumulated
other comprehensive loss . . . . . . . . . . .
—
(11,190)
16,315
1,868
6,993
Current-period other comprehensive
income (loss) activity . . . . . . . . . . . . . .
15,321
(3,486)
1,203
(334)
12,704
Total other comprehensive income (loss)
15,321
(14,676)
17,518
1,534
19,697
Balance at December 30, 2023 . . . . . . . . $
(213,482) $
(5,967) $
(419,835) $
146,973 $
(492,311)
Amounts reclassified from accumulated
other comprehensive loss . . . . . . . . . . .
(17,388)
(10,729)
17,204
1,710
(9,203)
Current-period other comprehensive
income (loss) activity . . . . . . . . . . . . . .
(103,436)
19,291
12,110
(3,673)
(75,708)
Total other comprehensive income (loss)
(120,824)
8,562
29,314
(1,963)
(84,911)
Balance at December 28, 2024 . . . . . . . . $
(334,306) $
2,595 $
(390,521) $
145,010 $
(577,222)
(1)
Cumulative Translation Adjustment includes translation adjustments and net investment hedges. See Note “Financial Instruments and
Risk Management” for additional disclosures about net investment hedges.
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-51
The Company uses a portfolio approach to release the income tax effects in accumulated other comprehensive loss related to
pension and postretirement benefits. Under this approach, the income tax effects are released from accumulated other
comprehensive loss based on the pre-tax adjustments to pension liabilities or assets recognized within other comprehensive income
(loss). Any tax effects remaining in accumulated other comprehensive loss are released only when the entire portfolio of the
pension and postretirement benefits is liquidated, sold or extinguished.
The Company had the following reclassifications out of AOCI:
Component of AOCI
Location of Reclassification
from AOCI
Amount of Reclassification from AOCI
into Net Income (Loss)
Years Ended
December 28,
2024
December 30,
2023
December 31,
2022
Write-off of cumulative translation associated
with sale of business . . . . . . . . . . . . . . . . . .
Income (loss) from
discontinued operations,
net of tax
$
17,388 $
— $
13,473
Gain (loss) on forward foreign exchange
contracts designated as cash flow hedges . .
Cost of sales
2,855
6,523
4,643
Income tax
(957)
(2,308)
(1,507)
Income (loss) from
discontinued operations,
net of tax
1,111
(1,639)
4,567
Net of tax
3,009
2,576
7,703
Gain on interest rate contracts designated as
cash flow hedges . . . . . . . . . . . . . . . . . . . . .
Interest expense, net
6,242
5,279
—
Income tax
—
—
—
Net of tax
6,242
5,279
—
Gain (loss) on cross-currency swap contracts
designated as cash flow hedges . . . . . . . . .
Selling, general and
administrative expenses
—
973
(20,016)
Interest expense, net
—
581
(5,940)
Income tax
—
—
—
Net of tax
—
1,554
(25,956)
Amortization of deferred actuarial loss and
prior service cost and settlement cost . . . . .
Other expenses
(17,209)
(16,315)
(20,809)
Income tax
(232)
(87)
52
Pension activity associated with sale of
business . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income (loss) from
discontinued operations,
net of tax
5
—
(460)
Net of tax
(17,436)
(16,402)
(21,217)
Total reclassifications . . . . . . . . . . . . . . . . . . .
$
9,203 $
(6,993) $
(25,997)
(19) Financial Instruments and Risk Management
The Company uses forward foreign exchange contracts and has used cross-currency swap contracts to manage its
exposures to movements in foreign exchange rates primarily related to the Australian dollar, Mexican peso and Canadian dollar
and has used interest rate contracts to manage its exposures to movements in interest rates. The Company has also used a
combination of cross-currency swap contracts and long-term debt to manage its exposure to foreign currency risk associated
with the Company’s net investment in its European subsidiaries.
Hedge Type
December 28,
2024
December 30,
2023
U.S. dollar equivalent notional amount of derivative instruments:
Forward foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash Flow and
Mark to Market
$
154,310 $
308,760
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash Flow
$
— $
900,000
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-52
Fair Values of Derivative Instruments
The fair values of derivative instruments related to forward foreign exchange contracts, cross-currency swap contracts and
interest rate contracts recognized in the Consolidated Balance Sheets of the Company were as follows:
Balance Sheet Location
Fair Value
December 28,
2024
December 30,
2023
Derivatives designated as hedging instruments:
Forward foreign exchange contracts . . . . . . . . . . . . . . . . . .
Other current assets
$
4,431 $
57
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets
—
23
Forward foreign exchange contracts . . . . . . . . . . . . . . . . . .
Other noncurrent assets
361
—
Derivatives not designated as hedging instruments:
Forward foreign exchange contracts . . . . . . . . . . . . . . . . . .
Other current assets
3,941
142
Total derivative assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,733
222
Derivatives designated as hedging instruments:
Forward foreign exchange contracts . . . . . . . . . . . . . . . . . .
Accrued liabilities and
other: Other
(41)
(2,508)
Forward foreign exchange contracts . . . . . . . . . . . . . . . . . .
Other noncurrent liabilities
—
(290)
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other noncurrent liabilities
—
(5,929)
Derivatives not designated as hedging instruments:
Forward foreign exchange contracts . . . . . . . . . . . . . . . . . .
Accrued liabilities and
other: Other
(20)
(2,784)
Total derivative liabilities . . . . . . . . . . . . . . . . . . . . . . . . .
(61)
(11,511)
Net derivative asset (liability) . . . . . . . . . . . . . . . . . . . . .
$
8,672 $
(11,289)
Cash Flow Hedges
The Company uses forward foreign exchange contracts and has used cross-currency swap contracts to reduce the effect of
fluctuating foreign currencies on foreign currency-denominated transactions, foreign currency-denominated investments and
other known foreign currency exposures. Gains and losses on these contracts are intended to offset losses and gains on the
hedged transaction in an effort to reduce the earnings volatility resulting from fluctuating foreign currency exchange rates. The
Company has also used interest rate contracts to reduce the effect of the variability in future interest payments on variable-rate
debt to lock in certainty of future cash flows.
On April 1, 2021, in connection with a reduction in the amount of the 3.5% Senior Notes designated in the European net
investment hedge discussed below, the Company entered into three pay-fixed rate, receive-fixed rate cross-currency swap
contracts with a total notional amount of €300,000. The Company designated these cross-currency swap contracts to hedge the
undesignated portion of the foreign currency cash flow exposure related to the Company’s 3.5% Senior Notes. These cross-
currency swap contracts swapped Euro-denominated interest payments for U.S. dollar-denominated interest payments, thereby
economically converting €300,000 of the Company’s €500,000 fixed-rate 3.5% Senior Notes to a fixed-rate 4.7945% USD-
denominated obligation. In February 2023, in connection with the redemption of the 3.5% Senior Notes, the Company unwound
these cross-currency swap contracts, which had an original maturity date of June 15, 2024. The Company paid $30,935 to settle
the cross-currency swap contracts, which was reported in “Net cash from operating activities” in the Consolidated Statements of
Cash Flows in 2023. The remaining gain in AOCI of $1,254 was released into earnings at the time of settlement and has been
recorded in the “Interest expense, net” line in the Consolidated Statements of Operations in 2023. The Company had no cross-
currency swap contracts designated as cash flow hedges as of December 28, 2024 or December 30, 2023.
In March 2023, the Company entered into an interest rate contract with a total notional amount of $900,000, which
amortizes down to $600,000 on March 31, 2025. The Company designated this interest rate contract, which matures on
March 31, 2026, to hedge the variability in contractually specified interest rates above 50 basis points associated with future
interest payments on a portion of the Company’s variable-rate term loans to lock in certainty of future cash flows. In October
2024, in connection with the pay down of term debt related to the Initial Closing of the sale of the global Champion business,
the Company terminated the interest rate contract, which had a remaining loss in AOCI of $4,155 on the termination date that
will be amortized into earnings through the original contract maturity date of March 31, 2026. The Company had no interest
rate contracts designated as cash flow hedges as of December 28, 2024.
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-53
The Company expects to reclassify into earnings during the next 12 months a net gain from AOCI of approximately
$2,823. The Company is hedging exposure to the variability in future foreign currency-denominated cash flows for forecasted
transactions over the next 16 months. The Company also expects the amortization of AOCI related to the interest rate contract
over the next 15 months.
The effect of derivative instruments designated as cash flow hedges on the Consolidated Statements of Operations and
AOCI is as follows:
Amount of Gain (Loss)
Recognized in AOCI on Derivative Instruments
Years Ended
December 28,
2024
December 30,
2023
December 31,
2022
Forward foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
10,767 $
28 $
10,843
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,524
(649)
—
Cross-currency swap contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
(2,865)
(22,305)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
19,291 $
(3,486) $
(11,462)
Location of Gain (Loss)
Reclassified from AOCI
into Income
Amount of Gain (Loss)
Reclassified from AOCI into Income
Years Ended
December 28,
2024
December 30,
2023
December 31,
2022
Forward foreign exchange contracts(1)
.
Cost of sales
$
2,855 $
6,523 $
4,643
Forward foreign exchange contracts(1)
.
Income (loss) from discontinued
operations, net of tax
1,632
(2,166)
6,386
Interest rate contracts . . . . . . . . . . . . . .
Interest expense, net
6,242
5,279
—
Cross-currency swap contracts(1) . . . . .
Selling, general and
administrative expenses
—
973
(20,016)
Cross-currency swap contracts(1) . . . . .
Interest expense, net
—
581
(5,940)
Total . . . . . . . . . . . . . . . . . . . . . . . . .
$
10,729 $
11,190 $
(14,927)
(1)
The Company does not exclude amounts from effectiveness testing for cash flow hedges that would require recognition into earnings
based on changes in fair value.
The following table presents the amounts in the Consolidated Statements of Operations in which the effects of cash flow
hedges are recorded:
Years Ended
December 28,
2024
December 30,
2023
December 31,
2022
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2,147,914 $
2,347,496 $
2,515,774
Selling, general and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . $
1,173,576 $
1,025,612 $
1,079,664
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
195,901 $
214,187 $
131,733
Income (loss) from discontinued operations, net of tax . . . . . . . . . . . . . . . . . $
(222,436) $
(46,874) $
193,341
Net Investment Hedges
In July 2019, the Company entered into two pay-fixed rate, receive-fixed rate cross-currency swap contracts with a total
notional amount of €300,000 that were designated as hedges of a portion of the beginning balance of the Company’s net
investment in its European subsidiaries. These cross-currency swap contracts, which had an original maturity date of May 15,
2024, swapped U.S. dollar-denominated interest payments for Euro-denominated interest payments, thereby economically
converting a portion of the Company’s fixed-rate 4.625% Senior Notes to a fixed-rate 2.3215% Euro-denominated obligation.
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-54
In July 2019, the Company also designated the full amount of its 3.5% Senior Notes with a carrying value of €500,000,
which was a nonderivative financial instrument, as a hedge of a portion of the beginning balance of the Company’s European
net investment. As of April 1, 2021, the Company reduced the amount of its 3.5% Senior Notes designated in the European net
investment hedge from €500,000 to €200,000.
In February 2023, in connection with the redemption of the 3.5% Senior Notes, the Company de-designated the remainder
of the 3.5% Senior Notes in the European net investment hedge and unwound these cross-currency swap contracts. The
Company received $18,942 to settle the cross-currency swap contracts, which was reported in “Net cash from investing
activities” in the Consolidated Statements of Cash Flows in 2023. There was a cumulative gain of $5,525 from the designated
portion of the 3.5% Senior Notes and a cumulative gain of $19,001 from the cross-currency swap contracts that have remained
in cumulative translation adjustment, a component of AOCI. Both were released into earnings at the completion of the Initial
Closing of the global Champion business in the fourth quarter of 2024. The Company had no derivative or nonderivative
financial instruments designated as net investment hedges as of December 28, 2024 or December 30, 2023.
The amount of after-tax gains (losses) included in AOCI in the Consolidated Balance Sheets related to derivative
instruments and nonderivative financial instruments designated as net investment hedges are as follows:
Amount of Gain (Loss) Recognized in AOCI
Years Ended
December 28,
2024
December 30,
2023
December 31,
2022
Euro-denominated long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
— $
(469) $
9,716
Cross-currency swap contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
531
14,497
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
— $
62 $
24,213
The effect of derivative and non-derivative instruments designated as net investment hedges on the Consolidated
Statements of Operations are as follows:
Location of Gain (Loss)
Reclassified from AOCI
into Income
Amount of Gain (Loss) Reclassified from AOCI into
Income
Years Ended
December 28,
2024
December 30,
2023
December 31,
2022
Euro-denominated long-term debt . . . . . . . . . . . . . . .
Income (loss) from
discontinued
operations, net of tax
$
5,525 $
— $
(13,348)
Cross-currency swap contracts . . . . . . . . . . . . . . . . .
Income (loss) from
discontinued
operations, net of tax
19,001
—
(2,505)
Cross-currency swap contracts (amounts excluded
from effectiveness testing) . . . . . . . . . . . . . . . . . . . Interest expense, net
—
960
8,368
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
24,526 $
960 $
(7,485)
The following table presents the amounts in the Consolidated Statements of Operations in which the effects of net
investment hedges are recorded:
Years Ended
December 28,
2024
December 30,
2023
December 31,
2022
Income (loss) from discontinued operations, net of tax . . . . . . . . . . . . . . . . . $
(222,436) $
(46,874) $
193,341
Interest expense, net (amounts excluded from effectiveness testing) . . . . . . . $
195,901 $
214,187 $
131,733
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-55
Mark to Market Hedges
Derivatives used in mark to market hedges are not designated as hedges under the accounting standards. The Company
uses forward foreign exchange derivative contracts as hedges against the impact of foreign exchange fluctuations on existing
accounts receivable and payable balances and intercompany lending transactions denominated in foreign currencies. Forward
foreign exchange derivative contracts are recorded as mark to market hedges when the hedged item is a recorded asset or
liability that is revalued in each accounting period. Any gains or losses resulting from changes in fair value are recognized
directly into earnings. Gains or losses on these contracts largely offset the net remeasurement gains or losses on the related
assets and liabilities.
The effect of derivative instruments not designated as hedges on the Consolidated Statements of Operations is as follows:
Location of Gain (Loss)
Recognized in Income
on Derivatives
Amount of Gain (Loss) Recognized in Income
Years Ended
December 28,
2024
December 30,
2023
December 31,
2022
Forward foreign exchange contracts . . . . . . . .
Cost of sales
$
2,910 $
(6,801) $
(7,830)
Forward foreign exchange contracts . . . . . . . .
Selling, general and
administrative expenses
—
222
(290)
Forward foreign exchange contracts . . . . . . . .
Income (loss) from
discontinued operations,
net of tax
522
302
(8,727)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
3,432 $
(6,277) $
(16,847)
(20) Fair Value of Assets and Liabilities
Fair value is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. The Company utilizes market data or assumptions that
market participants would use in pricing the asset or liability. A three-tier fair value hierarchy, which prioritizes the inputs used
in measuring fair value, is utilized for disclosing the fair value of the Company’s assets and liabilities. These tiers include:
Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted
prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs about
which little or no market data exists, therefore requiring an entity to develop its own assumptions.
Assets and liabilities measured at fair value are based on one or more of the following three valuation techniques:
•
Market approach — prices and other relevant information generated by market transactions involving identical or
comparable assets or liabilities.
•
Cost approach — amount that would be required to replace the service capacity of an asset or replacement cost.
•
Income approach — techniques to convert future amounts to a single present amount based on market expectations,
including present value techniques, option-pricing and other models.
The Company primarily applies the market approach for commodity derivatives and for all defined benefit plan
investment assets and the income approach for interest rate and foreign currency derivatives for recurring fair value
measurements and attempts to utilize valuation techniques that maximize the use of observable inputs and minimize the use of
unobservable inputs. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to
the fair value measurement. The determination of fair values incorporates various factors that include not only the credit
standing of the counterparties involved and the impact of credit enhancements, but also the impact of the Company’s
nonperformance risk on its liabilities. The Company’s assessment of the significance of a particular input to the fair value
measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the
fair value hierarchy levels.
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-56
As of December 28, 2024 and December 30, 2023, the Company held certain financial assets and liabilities that are
required to be measured at fair value on a recurring basis. These consisted of the Company’s derivative instruments related to
forward foreign exchange derivative contracts, interest rate derivative contracts, defined benefit pension plan investment assets
and deferred compensation plan liabilities. The fair values of forward foreign exchange derivative contracts are determined
using the cash flows of the forward contracts, discount rates to account for the passage of time and current foreign exchange
market data which are all based on inputs readily available in public markets and are categorized as Level 2. The fair values of
interest rate derivative contracts are determined using the cash flows of the contracts, discount rates to account for the passage
of time, current foreign exchange and interest rate market data and credit risk, which are all based on inputs readily available in
public markets and are categorized as Level 2. The fair value of deferred compensation plan liabilities is based on readily
available current market data and is categorized as Level 2. The fair values of defined benefit pension plan investment assets
include: certain U.S. equity securities, foreign equity securities and cash and cash equivalents that are determined based on
quoted prices in public markets categorized as Level 1; certain U.S. equity securities, foreign equity securities, debt securities
and commodity investments measured at their net asset value, which is determined based on inputs readily available in public
markets; and investments in hedge fund of funds and real estate investments that are based on unobservable inputs about which
little or no market data exists and are measured at a net asset value. Assets valued utilizing a net asset value are not required to
be categorized within the fair value hierarchy.
There were no changes during 2024 to the Company’s valuation techniques used to measure asset and liability fair values
on a recurring basis. As of and for the year ended December 28, 2024, the Company did not have any non-financial assets or
liabilities that were required to be measured at fair value on a recurring basis or non-recurring basis.
The following tables set forth by level within the fair value hierarchy the Company’s financial assets and liabilities
accounted for at fair value on a recurring basis.
Assets (Liabilities) at Fair Value as of December 28, 2024
Total
Quoted Prices In
Active Markets
for Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Defined benefit pension plan investment assets:
Cash and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
9,035 $
9,035 $
— $
—
Total plan assets in the fair value hierarchy . . . . . . . . . . . .
9,035
9,035
—
—
Plan assets measured at net asset value:(1)
Hedge fund of funds . . . . . . . . . . . . . . . . . . . . . . . . . . . .
824
U.S. equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . .
161,940
Foreign equity securities . . . . . . . . . . . . . . . . . . . . . . . .
126,809
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
383,576
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
51,671
Total plan assets measured at net asset value . . . . . . . . . . .
724,820
Total plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
733,855
Derivative contracts:
Forward foreign exchange contracts - assets . . . . . . . . .
8,733
—
8,733
—
Forward foreign exchange contracts - liabilities . . . . . .
(61)
—
(61)
—
Total derivative contracts . . . . . . . . . . . . . . . . . . . . . . . . . .
8,672
—
8,672
—
Deferred compensation plan liability . . . . . . . . . . . . . . . . .
(12,987)
—
(12,987)
—
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
729,540 $
9,035 $
(4,315) $
—
(1)
Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not
been categorized in the fair value hierarchy. The fair value amounts presented in the tables above are intended to permit reconciliation
of the fair value hierarchy to the amounts presented in the Consolidated Balance Sheets.
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-57
Assets (Liabilities) at Fair Value as of December 30, 2023
Total
Quoted Prices In
Active Markets
for Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Defined benefit pension plan investment assets:
U.S. equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . $
31,435 $
31,435 $
— $
—
Foreign equity securities . . . . . . . . . . . . . . . . . . . . . . . .
1,469
1,469
—
—
Cash and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,272
8,272
—
—
Total plan assets in the fair value hierarchy . . . . . . . . . . . .
41,176
41,176
—
—
Plan assets measured at net asset value:(1)
Hedge fund of funds . . . . . . . . . . . . . . . . . . . . . . . . . . . .
77,707
U.S. equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . .
142,951
Foreign equity securities . . . . . . . . . . . . . . . . . . . . . . . .
177,459
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
326,002
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
57,065
Total plan assets measured at net asset value . . . . . . . . . . .
781,184
Total plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
822,360
Derivative contracts:
Forward foreign exchange contracts - assets . . . . . . . . .
199
—
199
—
Interest rate contracts - assets . . . . . . . . . . . . . . . . . . . . .
23
—
23
—
Forward foreign exchange contracts - liabilities . . . . . .
(5,582)
—
(5,582)
—
Interest rate contracts - liabilities . . . . . . . . . . . . . . . . . .
(5,929)
—
(5,929)
—
Total derivative contracts
(11,289)
—
(11,289)
—
Deferred compensation plan liability . . . . . . . . . . . . . . . . .
(16,001)
—
(16,001)
—
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
795,070 $
41,176 $
(27,290) $
—
(1)
Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not
been categorized in the fair value hierarchy. The fair value amounts presented in the tables above are intended to permit reconciliation
of the fair value hierarchy to the amounts presented in the Consolidated Balance Sheets.
Fair Value of Financial Instruments
The carrying amounts of cash and cash equivalents, trade accounts receivable and accounts payable approximated fair
value as of December 28, 2024 and December 30, 2023. The fair value of debt, which is classified as a Level 2 liability, was
$2,326,202 and $3,259,299 as of December 28, 2024 and December 30, 2023, respectively. Debt had a carrying value of
$2,298,267 and $3,336,750 as of December 28, 2024 and December 30, 2023, respectively. The fair values were estimated
using quoted market prices as provided in secondary markets, which consider the Company’s credit risk and market related
conditions.
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-58
(21) Business Segment Information
The Company regularly monitors its reportable segments to determine if changes in facts and circumstances would
indicate whether changes in the determination or aggregation of operating segments are necessary. In the second quarter of
2024, the Company announced that it reached an agreement to sell the global Champion business as discussed in Note “Assets
and Liabilities of Businesses Held for Sale” and as a result, this business was reclassified as held for sale and reflected as
discontinued operations for all periods presented. While the global Champion business was reflected within all reportable
segments prior to its reclassification to discontinued operations, the U.S. Champion business made up the majority of the
Company’s former Activewear segment. Accordingly, the former Activewear segment has been eliminated and the segment
information herein excludes the results of the global Champion business for all periods presented. As a result of the strategic
shift and resulting reorganization, the chief executive officer, who is the Company’s chief operating decision maker, began
reviewing all U.S. innerwear and U.S. activewear operations together as one U.S. operating segment and the Company’s
operations are now managed and reported in two operating segments, each of which is a reportable segment for financial
reporting purposes: U.S. and International. In December 2024, the Champion Japan business, which was previously reported
within the International segment, was classified as held for sale and reflected as discontinued operations for all periods
presented. Accordingly, the Champion Japan business has been excluded from the International segment information herein.
These changes have been applied to all periods presented. These segments are organized and managed principally by
geographic location. Each segment has its own management team that is responsible for the operations of the segment’s
businesses, but the segments share a common supply chain and media and marketing platforms.
Other consists of the Company’s U.S. Sheer Hosiery business prior to its sale on September 29, 2023, certain sales from
the Company’s supply chain to the European Innerwear business which was sold on March 5, 2022 and short term support and
transition service agreements for disposed businesses. The Company’s U.S.-based outlet store business was also reflected in
Other prior to its reclassification to discontinued operations in the second quarter of 2024 as discussed in Note “Assets and
Liabilities of Businesses Held for Sale.” As a result of this reclassification, the results of the U.S.-based outlet store business are
excluded from the segment information herein for all periods presented.
The Company’s chief executive officer is the Company’s chief operating decision maker (“CODM”). The Company’s
CODM manages business operations, evaluates performance and allocates resources based on the segments’ net revenues and
operating income. The CODM reviews net revenues and operating income each month while considering variances compared
to forecast and changes from prior periods. The Company reports inventories by segment as that information is used by the
chief operating decision maker in assessing segment performance. The Company does not report its other assets by segment as
that information is not used by the chief operating decision maker in assessing segment performance.
The types of products and services from which each reportable segment derives its revenues are as follows:
•
U.S. primarily includes innerwear sales in the United States of basic branded apparel products that are replenishment
in nature under the product categories of men’s underwear, women’s panties, children’s underwear and socks, and
intimate apparel, which includes bras and shapewear. This segment also includes other apparel sales in the United
States of branded products that are primarily seasonal in nature to both retailers and wholesalers.
•
International primarily includes sales of the Company’s innerwear and other apparel products outside the United
States, primarily in Australia, Latin America, Asia and Canada.
The Company evaluates the operating performance of its segments based upon segment operating profit, which is defined
as operating profit before general corporate expenses, restructuring and other action-related charges and amortization of
intangibles. The accounting policies of the segments are consistent with those described in Note “Summary of Significant
Accounting Policies.”
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-59
Year Ended
December 28, 2024
U.S.
International
Total
Segment net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2,581,137 $
908,433 $
3,489,570
Reconciliation of net sales:
Other net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17,868
Total net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,507,438
Less(1):
Media, advertising and promotion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
138,606
37,913
176,519
Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
169,058
73,834
242,892
Other segment costs(2)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,724,621
690,180
2,414,801
Total segment operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
548,852
106,506
655,358
Reconciliation of operating profit:
Other profit (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,550
General corporate expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(225,997)
Restructuring and other action-related charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(229,223)
Amortization of intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(16,740)
Total operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
185,948
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(47,441)
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(195,901)
Income (loss) from continuing operations before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
(57,394)
(1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker.
(2) Other segment costs include cost of sales, marketing, selling and other administrative expenses.
Year Ended
December 30, 2023
U.S.
International
Total
Segment net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2,636,656 $
933,067 $
3,569,723
Reconciliation of net sales:
Other net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
69,663
Total net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,639,386
Less(1):
Media, advertising and promotion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
90,415
37,205
127,620
Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
177,531
69,510
247,041
Other segment costs(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,964,437
717,519
2,681,956
Total segment operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
404,273
108,833
513,106
Reconciliation of segment operating profit (loss):
Other profit (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,189)
General corporate expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(204,019)
Restructuring and other action-related charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(22,799)
Amortization of intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(18,821)
Total operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
266,278
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(37,761)
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(214,187)
Income (loss) from continuing operations before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
14,330
(1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker.
(2) Other segment costs include cost of sales, marketing, selling and other administrative expenses.
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-60
Year Ended
December 31, 2022
U.S.
International
Total
Segment net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2,692,175 $
1,010,541 $
3,702,716
Reconciliation of net sales:
Other net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
160,093
Total net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,862,809
Less(1):
Media, advertising and promotion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
89,724
48,662
138,386
Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
195,448
70,899
266,347
Other segment costs(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,004,306
746,607
2,750,913
Total segment operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
402,697
144,373
547,070
Reconciliation of segment operating profit:
Other profit (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21,774
General corporate expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(228,782)
Restructuring and other action-related charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(54,642)
Amortization of intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(18,049)
Total operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
267,371
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(8,294)
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(131,733)
Income (loss) from continuing operations before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
127,344
(1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker.
(2) Other segment costs include cost of sales, marketing, selling and other administrative expenses.
The Company incurred restructuring and other action-related charges that were reported in the following lines in the
Consolidated Statements of Operations:
Years Ended
December 28,
2024
December 30,
2023
December 31,
2022
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
91,179 $
2,153 $
13,645
Selling, general and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . .
138,044
20,646
40,997
Total included in operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
229,223
22,799
54,642
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,412
8,350
—
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
(1,254)
—
Total included in income (loss) from continuing operations before
income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
238,635
29,895
54,642
Income tax (expense) benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
85,122
(413,766)
Total restructuring and other action-related charges . . . . . . . . . . . . . . . . $
238,635 $
(55,227) $
468,408
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-61
The components of restructuring and other action-related charges were as follows:
Years Ended
December 28,
2024
December 30,
2023
December 31,
2022
Restructuring and other action-related charges: . . . . . . . . . . . . . . . . . . . . . . .
Supply chain restructuring and consolidation . . . . . . . . . . . . . . . . . . . . . . . $
171,529 $
1,128 $
14,345
Corporate asset impairment charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20,107
—
—
Headcount actions and related severance . . . . . . . . . . . . . . . . . . . . . . . . . . .
16,993
5,149
6,975
Professional services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16,488
3,819
23,994
Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,859
8,347
11,922
Loss (gain) on sale of business and classification of assets held for sale . .
—
3,641
(3,535)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,247
715
941
Total included in operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
229,223
22,799
54,642
Loss on extinguishment and refinancing of debt included in other expenses
9,412
8,466
—
Gain on final settlement of cross currency swap contracts included in other
expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
(116)
—
Gain on final settlement of cross currency swap contracts included in
interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
(1,254)
—
Total included in income (loss) from continuing operations before
income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
238,635
29,895
54,642
Discrete tax (expense) benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
85,122
(422,918)
Tax effect on actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
9,152
Total included in income tax (expense) benefit . . . . . . . . . . . . . . . . . . .
—
85,122
(413,766)
Total restructuring and other action-related charges . . . . . . . . . . . . . . $
238,635 $
(55,227) $
468,408
Significant restructuring and other action-related charges within operating profit are discussed below.
•
Supply chain restructuring and consolidation charges in 2024 include:
◦
$80,748 reflected in the “Cost of Sales” line in the Consolidated Statements of Operations, primarily related
to charges of $53,953 to write down inventory as a result of further SKU rationalization efforts and $20,334
for severance and related employee actions for impacted supply chain facilities; and
◦
$90,781 reflected in the “Selling, general and administrative expenses” line in the Consolidated Statements of
Operations, primarily related to charges of $72,047 for impairment of an owned facility that was classified as
held for sale and a right of use asset for which the leased facility was not in operation, $10,921 for accelerated
amortization of right of use assets for leased facilities that the Company expects to exit before the end of the
contractual lease term, and $3,590 for headcount actions and related severance related to restructuring and
consolidation efforts within the Company’s supply chain network.
•
Supply chain restructuring and consolidation charges in 2023 and 2022 are reflected in the “Cost of Sales” line in the
Consolidated Statements of Operations and primarily represent supply chain segmentation charges to restructure and
position the Company’s distribution and manufacturing network to align with its demand trends.
•
Corporate asset impairment charges in 2024 include charges of $10,395, reflected in the “Cost of sales” line in the
Consolidated Statements of Operations, primarily related to a contract termination, and $9,712, reflected in the
“Selling, general and administrative expenses” line in the Consolidated Statements of Operations, primarily related to
charges for impairment of the Company’s headquarters location sold in 2024.
•
In addition to the charges discussed above, the following restructuring and other action-related charges are primarily
reflected in the “Selling, general and administrative expenses” line in the Consolidated Statements of Operations in
2024, 2023 and 2022:
◦
Headcount actions and related severance charges related to operating model initiatives.
◦
Fees for professional services that primarily include consulting and advisory services related to restructuring
activities.
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-62
◦
Technology charges related to the implementation of the Company’s technology modernization initiative
including the implementation of a global enterprise resource planning platform.
◦
The (gain) loss on sale of business and classification of assets held for sale related to the sale of the
Company’s U.S. Sheer Hosiery business, which was sold to AllStar in 2023. See Note “Assets and Liabilities
of Businesses Held for Sale” for additional information regarding the U.S. Sheer Hosiery business.
•
Restructuring and other action-related charges recorded in the “Other expenses” and “Interest expense, net” lines in the
Consolidated Statements of Operations included the following:
◦
In 2024, the Company recorded a charge of $9,412 in the “Other expenses” line for the write-off of
unamortized debt issuance costs related to the requirement to pay down a portion of the Company’s
outstanding term debt under the Senior Secured Credit Facility with the net proceeds from the sale of the
global Champion business.
◦
In 2023, the Company recorded a charge of $8,466 in restructuring and other action-related charges related to
the redemption of its 4.625% Senior Notes and 3.5% Senior Notes. The charge, which is recorded in the
“Other expenses” line, included a payment of $4,632 for a required make-whole premium related to the
redemption of the 3.5% Senior Notes and a non-cash charge of $3,834 for the write-off of unamortized debt
issuance costs related to the redemption of the 4.625% Senior Notes and the 3.5% Senior Notes.
◦
Additionally, in 2023, in connection with the redemption of the 3.5% Senior Notes, the Company unwound
the related cross-currency swap contracts previously designated as cash flow hedges and the remaining gain
in AOCI of $1,254 was released into earnings at the time of settlement which is recorded in the “Interest
expense, net” line in the Consolidated Statements of Operations. See Note “Financial Instruments and Risk
Management” for additional information.
Restructuring and other action-related charges in 2023 included discrete tax benefits of $85,122, of which $80,859 was
recorded in the fourth quarter of 2023, representing an adjustment to non-cash reserves established at December 31, 2022
related to deferred taxes for Swiss statutory impairments, which are not indicative of the Company’s core operations. In the
fourth quarter of 2022, the Company recorded a non-cash discrete tax charge of $422,918 to reflect a full valuation allowance
against the Company’s U.S. federal and state deferred tax assets. As of December 31, 2022, the Company concluded that, based
on its evaluation of all available positive and negative evidence, its U.S. federal and state deferred tax assets were no longer
more likely than not realizable. In making this determination, the Company evaluated positive evidence, including its
projections of future taxable income which demonstrate a long-term return to profitability in the U.S., and negative evidence,
including recent tax losses incurred and expected near term tax losses in connection with its domestic operations and the lack of
sufficient taxable temporary differences expected to reverse in future periods, and determined that the negative evidence
outweighed the positive. Restructuring and other action-related charges in 2022 also included the tax effect on actions, which
represents the applicable effective tax rate on the restructuring and other action-related charges based on the jurisdiction of
where the charges were incurred.
As of December 30, 2023, the Company had an accrual of $10,890 for expected benefit payments related to actions taken
in prior years. During 2024, the Company approved headcount actions and related severance to align its workforce and
manufacturing and distribution network with its strategic initiatives resulting in charges of $58,779 for employee termination
and other benefits for employees affected by the actions. The Company recorded $20,370 of these charges in the “Cost of sales”
line, $20,547 in the “Selling, general and administrative expenses” line, and $17,862 in the “Loss from discontinued operations,
net of tax” line in the Consolidated Statements of Operations in 2024. The charges related to continuing operations, which
totaled $40,917 in 2024, are included in the “Supply chain restructuring and consolidation” and the “Headcount actions and
related severance” lines in the restructuring and other action-related charges table above. During 2024, the Company made
benefit payments and other adjustments of $27,494, resulting in an ending accrual of $42,175 which is included in the “Other”
accrued liabilities line of the Consolidated Balance Sheets at December 28, 2024.
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-63
December 28, 2024
U.S.
International
Other
Unallocated
Total Assets
Assets:
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
711,323 $
146,190 $
13,531 $
— $
871,044
Assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
—
160,023
160,023
All other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
— 2,809,874 2,809,874
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,840,941
December 30, 2023
U.S.
International
Other
Unallocated
Total Assets
Assets:
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
806,347 $
150,083 $
— $
— $
956,430
Assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
— 1,564,283 1,564,283
All other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
— 3,119,601 3,119,601
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,640,314
Years Ended
December 28,
2024
December 30,
2023
December 31,
2022
Depreciation and amortization expense:
U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
48,132 $
45,985 $
44,005
International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11,029
10,643
12,314
59,161
56,628
56,319
Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19,919
23,326
23,067
Total depreciation and amortization expense . . . . . . . . . . . . . . . . . . . . . $
79,080 $
79,954 $
79,386
Sales to Walmart, Amazon and Target were substantially in the U.S. segment and represented 24%, 13% and 11% of total
net sales in 2024, respectively, 24%, 10% and 12% in 2023, respectively, and 23%, 10% and 10% in 2022, respectively.
(22) Geographic Area Information
Years Ended or at
December 28, 2024
December 30, 2023
December 31, 2022
Sales
Property, Net
Sales
Property, Net
Sales
Property, Net
Americas . . . . . . . . . . . . . . . $
2,743,054 $
111,918 $
2,844,488 $
264,750 $
2,956,287 $
292,071
Asia Pacific . . . . . . . . . . . . .
667,069
76,341
680,792
88,285
756,648
83,069
Europe . . . . . . . . . . . . . . . . .
5,625
—
17,216
—
41,833
29
Other . . . . . . . . . . . . . . . . . .
91,690
—
96,890
—
108,041
—
$
3,507,438 $
188,259 $
3,639,386 $
353,035 $
3,862,809 $
375,169
Net sales in the United States were $2,597,777, $2,690,485, and $2,810,487 in 2024, 2023 and 2022, respectively, and
property, (net) in the United States were $28,046, $65,117, and $81,056 in 2024, 2023 and 2022, respectively.
The net sales by geographic region are attributed by customer location. The property by geographic region includes assets
held and used, which are recognized within the “Property, net” line in the Consolidated Balance Sheets.
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-64
(23) Quarterly Financial Data (Unaudited)
The following table presents the summarized unaudited quarterly financial data of the Company for each of the quarters in
the years ended December 28, 2024 and December 30, 2023.
Quarters Ended
March 30,
2024
June 29,
2024
September 28,
2024
December 28,
2024
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
744,675 $
973,927 $
900,367 $
888,469
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
447,242
675,584
526,890
498,198
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
297,433
298,343
373,477
390,271
Selling, general and administrative expenses . . . . . . . . . . . . .
262,019
361,546
279,440
270,571
Operating profit (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
35,414
(63,203)
94,037
119,700
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,062
10,616
9,343
18,420
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
50,583
50,279
48,542
46,497
Income (loss) from continuing operations before income
taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(24,231)
(124,098)
36,152
54,783
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,571
11,485
11,430
9,115
Income (loss) from continuing operations . . . . . . . . . . . . . .
(32,802)
(135,583)
24,722
45,668
Income (loss) from discontinued operations, net of tax . . . . . .
(6,320)
(162,797)
5,229
(58,548)
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(39,122) $
(298,380) $
29,951 $
(12,880)
Earnings (loss) per share - basic:
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(0.09) $
(0.39) $
0.07 $
0.13
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(0.02)
(0.46)
0.01
(0.17)
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(0.11) $
(0.85) $
0.09 $
(0.04)
Earnings (loss) per share - diluted:
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(0.09) $
(0.39) $
0.07 $
0.13
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(0.02)
(0.46)
0.01
(0.16)
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(0.11) $
(0.85) $
0.08 $
(0.04)
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-65
Quarters Ended
April 1,
2023
July 1,
2023
September 30,
2023
December 30,
2023
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
849,314 $
1,013,176 $
926,613 $
850,283
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
580,930
666,168
591,708
508,690
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
268,384
347,008
334,905
341,593
Selling, general and administrative expenses . . . . . . . . . . . . .
243,848
277,220
257,390
247,154
Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24,536
69,788
77,515
94,439
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14,709
7,046
8,911
7,095
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
45,209
58,679
56,614
53,685
Income (loss) from continuing operations before income
taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(35,382)
4,063
11,990
33,659
Income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . .
16,180
12,826
21,280
(65,104)
Income (loss) from continuing operations . . . . . . . . . . . . . .
(51,562)
(8,763)
(9,290)
98,763
Income (loss) from discontinued operations, net of tax . . . . . .
17,158
(13,701)
(29,509)
(20,822)
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(34,404) $
(22,464) $
(38,799) $
77,941
Earnings (loss) per share - basic:
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(0.15) $
(0.03) $
(0.03) $
0.28
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.05
(0.04)
(0.08)
(0.06)
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(0.10) $
(0.06) $
(0.11) $
0.22
Earnings (loss) per share - diluted:
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(0.15) $
(0.03) $
(0.03) $
0.28
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.05
(0.04)
(0.08)
(0.06)
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(0.10) $
(0.06) $
(0.11) $
0.22
Table of Contents
HANESBRANDS INC.
Notes to Consolidated Financial Statements — (Continued)
Years ended December 28, 2024, December 30, 2023 and December 31, 2022
(amounts in thousands, except per share data)
F-66