Hanesbrands Inc. (NYSE:HBI), a leading apparel retailer, announced on Thursday the upcoming departure of Vanessa LeFebvre, President of Activewear – Global. The move is tied to the impending sale of the company's global Champion business to Authentic Brands Group.
LeFebreve's exit from the company is set to take effect upon the closure of the sale transaction with ABG-Sparrow IPCo LLC, a subsidiary of Authentic Brands Group. The sale, which includes the intellectual property and certain operating assets of the Champion brand, was previously disclosed on June 4, 2024, under a Stock and Asset Purchase Agreement.
The transition comes as Hanesbrands, headquartered in Winston-Salem, North Carolina, navigates a significant shift in its business portfolio. The company's decision to divest its Champion business to Authentic, a company known for managing a portfolio of iconic brands, marks a strategic realignment of its operations.
In other recent news, Hanesbrands Inc. has disclosed several strategic actions to spur growth. The company has sold its Global Champion business and exited its U.S. outlet store business. Despite a 4% decrease in net sales to $995 million, Hanesbrands has seen improvements in gross and operating margins, which rose to 39.8% and 12.7% respectively.
The company is also projecting a decrease in sales by 2% for the full year, but expects a 36% increase in operating profit. Hanesbrands is implementing cost reduction initiatives that focus on technology, supply chain optimization, and SG&A savings.
The company anticipates a significant increase in EPS in the coming years, driven by cost reductions, margin expansion, and strategic brand investments. Hanesbrands is also confident in its ability to grow at twice the rate of the category and generate over $400 million in operating cash flow in the future. These are recent developments that could potentially shape the company's future performance.
InvestingPro Insights
As Hanesbrands Inc. (NYSE:HBI) prepares for a significant realignment following the sale of its Champion brand, investors are evaluating the company's financial health and future prospects. According to real-time data from InvestingPro, Hanesbrands currently has a market capitalization of approximately $2.24 billion. Despite the challenges, the company has shown resilience with a strong free cash flow yield, suggesting a potential for shareholder value creation in the long term. However, it's important to note that Hanesbrands has been trading at a high Price / Book multiple of 34.81 as of the last twelve months ending Q2 2024.
InvestingPro Tips indicate that while net income is expected to grow this year, analysts have revised their earnings downwards for the upcoming period. This mixed outlook is further complicated by an anticipated sales decline in the current year. On a positive note, the company's liquid assets exceed its short-term obligations, providing some financial flexibility. For those interested in exploring these metrics further, there are additional InvestingPro Tips available at https://www.investing.com/pro/HBI, which could offer deeper insights into Hanesbrands' financial position and the potential impacts of the Champion brand sale.
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