Hanesbrands, which reached an agreement to divest its global Champion business and exited its U.S. outlet store network in July, is moving forward with a more focused, simplified business structure focused on the remaining brands in its portfolio.
In H2, the company will pay down approximately $1 billion in debt from net proceeds from the Champion transaction and internal cash generation. Hanesbrands expects to complete the Champion sale to Authentic Brands Group before the end of 2024 and yield net proceeds of $900 million from the transaction initially with a possible additional earnout of up to $300 million. On the day of the closing, the company will receive over $800 million of the net proceeds and transfer the Champion intellectual property (IP) and operations of the collegiate and European businesses. Transfer of the remaining Champion business, excluding Japan, through the end of Jan. 2025 and subsequently receive the remaining $100 million for the sale. Meanwhile, Hanesbrands will continue to operate the Champion Japan business as a licensee for a temporary period before transitioning that business to ABG.
CEO Stephen Bratspies told analysts that the company has “fundamentally strengthened” itself by “creating a more focused, simplified business, one with more consistent topline growth, higher margins, strong cash generation…”
The current FY24 outlook calls for net sales from continuing operations of $3.59-$3.63 billion and an adjusted operating profit from continuing operations of $395-$415 million, and $200 million in cash flow from operations.
