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Investing.com -- HanesBrands Inc. (NYSE:HBI) shares surged 12.7% on Thursday after the apparel maker reported second-quarter earnings that exceeded analyst expectations and raised its full-year outlook, driven by strong margin improvement and cost-saving initiatives.
The company posted adjusted earnings per share of $0.24 for the second quarter, beating analyst estimates of $0.18. Revenue came in at $991.3 million, surpassing the consensus estimate of $969.2 million and representing a 1.8% increase YoY.
Gross margin expanded significantly to 41.6%, up 1,100 basis points from the same period last year. Adjusted operating profit jumped 22% to $153 million, with adjusted operating margin improving 255 basis points to 15.5%.
"For the third consecutive quarter, we delivered revenue, profit and earnings per share growth that exceeded our expectations as we continue to see the benefits of our growth strategy and prior transformation initiatives," said CEO Steve Bratspies.
The company’s U.S. segment saw growth in Basics, Active, and New businesses, though this was offset by headwinds in Intimate Apparel. International sales decreased 3% on a reported basis but remained flat on a constant currency basis.
HanesBrands strengthened its balance sheet, reducing its leverage ratio to 3.3 times net debt-to-adjusted EBITDA, an improvement of 1.3 times compared to the prior year.
Looking ahead, the company raised its full-year 2025 outlook, now expecting revenue of approximately $3.53 billion versus the analyst consensus of $3.485 billion.
Full-year adjusted EPS is projected at $0.66, well above the consensus estimate of $0.54.
For the third quarter, HanesBrands expects revenue of approximately $900 million and adjusted EPS of $0.16.
The company noted that its guidance reflects expected impacts from U.S. tariffs but still projects continued growth and margin expansion for the year.
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