Hanesbrands (HBI) 8-K Hanesbrands Inc. Reports Second-quarter 2008 Results

Exhibit 99.1

Hanesbrands Inc
1000 East Hanes Mill Road
Winston-Salem, NC 27105
(336) 519-4400

news release

FOR IMMEDIATE RELEASE
News Media, contact:	Matt Hall, (336) 519-3386
Analysts and Investors, contact:	Brian Lantz, (336) 519-7130

HANESBRANDS INC. REPORTS SECOND-QUARTER 2008 RESULTS

WINSTON-SALEM, N.C. (July 29, 2008) — Hanesbrands Inc. (NYSE: HBI), a leading marketer of innerwear, outerwear and hosiery apparel, today reported results for the 2008 second quarter.

Earnings increased in the quarter as a result of continued strategic execution, while sales declined, reflective of the challenging retail sales environment for apparel and later timing of back-to-school shipments.

Earnings per diluted share in the quarter more than doubled to $0.60. Excluding actions, non-GAAP earnings per diluted share increased by 20 percent to $0.65, up $0.11 as a result of reduced long-term debt, lower base interest rates, and lower income tax expense as a result of the company’s global supply chain strategy. Total net sales decreased by 4.4 percent to $1.07 billion.

“We are pleased with continued earnings per share growth as a result of executing our improvement strategies, despite operating in a tough economic environment,” Hanesbrands Chief Executive Officer Richard A. Noll said. “Most of our business improvement initiatives are working, but we are continuing to address sales declines, which were primarily centered around intimate apparel product categories.”

Noteworthy Financial Highlights

Selected highlights for the quarter and six months ended June 28, 2008, compared with the year-ago periods ended June 30, 2007, include:

•	Earnings per diluted share in the quarter increased by 131 percent to $0.60, up from $0.26 a year ago. Diluted EPS for the six-month period increased by 149 percent to $0.97. Non-GAAP diluted EPS, which excludes actions, increased by 20 percent for the quarter and 32 percent for the first six months.
	Non-GAAP net income, which excludes actions, increased by $10 million in the quarter, primarily as a result of lower interest expense, lower income tax expense as a result of global supply chain initiatives, and cost reductions that were offset by lower sales.

Hanesbrands Inc. Reports Second-Quarter 2008 Results — Page 2

•	Operating profit in the quarter increased by 28 percent to $113.1 million and increased by 28 percent to $200.9 million in the six-month period.
	The non-GAAP operating profit margin, which excludes actions, was 11.2 percent in the quarter, the same as last year’s quarter. For the six-month period, the non-GAAP operating profit margin increased to 10.4 percent versus 10.0 percent a year ago.
	The benefits of cost-reduction efforts, including operating fewer, larger facilities in lower-cost countries, distribution center streamlining and organization consolidation, contributed to an improved gross profit margin and flat selling, general and administrative expenses.
•	Total net sales in the quarter decreased by $50 million to $1.07 billion. Sales primarily decreased in the company’s innerwear segment, with particularly soft sales for intimate apparel product categories. Later back-to-school shipments compared with a year ago also contributed to the innerwear decline.
	International segment sales increased by 20 percent in the quarter as a result of favorable foreign currency exchange rates and growth. The increase in international sales more than offset sales declines in the outerwear segment, the hosiery segment and the other segment.
	“We are focused on driving a great execution of back-to-school and year-end holiday sales programs.” Noll said. “We are confident that our brand investment, product development, and customer programs are the best approach to competing in the current retail climate.”

(Diluted EPS excluding actions, net income excluding actions and operating profit margin excluding actions are non-GAAP measures used to better assess underlying business performance because they exclude the effect of unusual actions that are not directly related to operations. The unusual actions in the current or year-ago quarter were restructuring and related charges, amortization of gain on postretirement benefits, nonrecurring spinoff and related charges, and the tax effect on these items. See Table 4 for details and reconciliation with reported operating results consistent with generally accepted accounting principles.)

Other Comments

Since the company’s spin off, Hanesbrands has strategically structured its debt and managed its exposure to interest rates, and the company benefited from these efforts in the first half of 2008. As part of this ongoing strategic effort, the company earlier this month took advantage of an opportunity to fix the interest rate on $500 million of floating-rate bonds for four years at 7.64 percent. Of the company’s approximate $2.3 billion in debt, $1 billion is at fixed rates.

Hanesbrands Inc. Reports Second-Quarter 2008 Results — Page 3

In May, Standard & Poor’s Ratings Services raised its corporate credit rating on Hanesbrands to BB- from B+, reflecting the company’s strategic execution progress and positive operating momentum as a stand-alone company.

The company also launched itsHanestelevision, print and Internet advertising and marketing campaign featuring Michael Jordan and actor Charlie Sheen forHanes Lay Flat Collar UndershirtsandHanes No Ride Up Boxer briefs,the brand’s latest innovation in product comfort and fit.

Hanesbrands continues to make significant progress in expanding its supply chain in Asia as part of its global strategy of consolidating manufacturing into fewer, larger facilities in lower-cost countries.

In the second quarter, the company added three company-owned sewing plants in Southeast Asia — two in Vietnam and one in Thailand — giving the company four sewing plants in Asia. In Nanjing, China, construction is under way on the company’s first Asian textile fabric plant, which is scheduled to start production in 2009. By the end of the year, the company expects to have more than 6,000 employees in Asia, triple the number at the beginning of the year.

Hanesbrands has reached planned fabric production levels at its off-shore textile facilities in the Dominican Republic and El Salvador. Further expansion is planned in El Salvador.

In addition, the company continues to streamline and refine its distribution network. In the second quarter, expansion of its Honduras distribution center was completed, doubling its size. That follows the completion in the fourth quarter last year of a mixing center in the Dominican Republic. Both centers ship directly to customers in the United States, utilizing the company’s integrated networks of fabric production and sewing plants located in Central America and the Dominican Republic.

“We are focused on our improvement strategies to sell more, spend less and generate cash,” Noll said. “We are executing our cost-reduction, debt-management and globalization strategies to increase profit while we continue to focus on improving sales performance.”

Hanesbrands Policy on Guidance

Hanesbrands follows a policy of not providing quarterly or annual EPS guidance. The company plans to communicate appropriately to provide investors with an understanding of long-term goals, the trends associated with its business and current financial performance.

Webcast Conference Call

Hanesbrands will host a live Internet webcast of its quarterly investor conference call at 4:30 p.m. EDT today. The live Internet broadcast may be accessed on the home page of the Hanesbrands corporate Web site, www.hanesbrands.com. The call is expected to conclude by 5:30 p.m. EDT.

Hanesbrands Inc. Reports Second-Quarter 2008 Results — Page 4

An archived replay of the conference call webcast will be available in the investors section of the Hanesbrands corporate Web site. A telephone playback will be available from approximately 7 p.m. EDT today until midnight EDT on Aug. 5, 2008. The replay will be available by calling toll-free (800) 642-1687, or via toll-call at (706) 645-9291. The replay pass code is 55214580.

Cautionary Statement Concerning Forward-Looking Statements

Statements in this press release that are not statements of historical fact are 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, including those regarding our launch as an independent company and the benefits expected from that launch, our long-term goals, and trends associated with our business. These forward-looking statements are made only as of the date of this press release and are based on our current intent, beliefs, plans and expectations. They involve risks and uncertainties that could cause actual future results, performance or developments to differ materially from those described in or implied by such forward-looking statements. These risks and uncertainties include the following: our ability to migrate our production and manufacturing operations to lower-cost countries around the world; our ability to effectively implement other components of our business strategy; costs and adverse publicity from violations of labor or environmental laws by us or our suppliers; our ability to successfully manage adverse changes in social, political, economic, legal and other conditions affecting our foreign operations; retailer consolidation and other changes in the apparel essentials industry; our ability to keep pace with changing consumer preferences; loss of or reduction in sales to, or financial difficulties experienced by, any of our top customers; fluctuations in the price or availability of cotton, oil or labor; inflationary pressure on consumer demand; our debt and debt-service requirements that restrict our operating and financial flexibility and impose interest and financing costs; and other risks identified from time to time in our most recent Securities and Exchange Commission reports, including the 2007 Annual Report on Form 10-K, 2008 quarterly reports on Form 10-Q and current reports on Form 8-K, registration statements, press releases and other communications. The company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.

Hanesbrands Inc.

Hanesbrands Inc. is a leading marketer of innerwear, outerwear and hosiery apparel under strong consumer brands, includingHanes, Champion, Playtex, Bali, Just My Size, barely thereandWonderbra. The company designs, manufactures, sources and sells T-shirts, bras, panties, men’s underwear, children’s underwear, socks, hosiery, casualwear and activewear. Hanesbrands has approximately 50,000 employees in more than 25 countries. More information may be found on the company’s Web site at www.hanesbrands.com.

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TABLE 1

HANESBRANDS INC.
Condensed Consolidated Statements of Income
(Amounts in thousands, except per-share amounts)
(Unaudited)

	Quarter Ended									Six Months Ended
	June 28, 2008			June 30, 2007			% Change			June 28, 2008			June 30, 2007			% Change
Net sales:
Innerwear	$	636,335		$	691,504					$	1,180,065		$	1,281,951
Outerwear		260,137			263,596						532,342			547,231
Hosiery		49,734			51,402						116,475			125,095
International		130,903			109,001						235,539			199,778
Other		4,174			17,644						15,295			33,042
Total segment net sales		1,081,283			1,133,147						2,079,716			2,187,097
Less: Intersegment		9,112			11,240						19,698			25,296
Total net sales		1,072,171			1,121,907			-4.4	%		2,060,018			2,161,801			-4.7	%
Cost of sales		691,215			741,550						1,334,098			1,441,765
Gross profit		380,956			380,357			0.2	%		725,920			720,036			0.8	%
As a % of net sales		35.5	%		33.9	%					35.2	%		33.3	%
Selling, general and administrative expenses		266,427			266,017						521,039			520,584
As a % of net sales		24.8	%		23.7	%					25.3	%		24.1	%
Restructuring		1,442			26,225						4,000			42,471
Operating profit		113,087			88,115			28.3	%		200,881			156,981			28.0	%
As a % of net sales		10.5	%		7.9	%					9.8	%		7.3	%
Other expenses		—			551						—			551
Interest expense, net		37,635			51,230						78,029			102,947
Income before income tax expense		75,452			36,334						122,852			53,483
Income tax expense		18,108			10,900						29,484			16,045
Net income	$	57,344		$	25,434			125.5	%	$	93,368		$	37,438			149.4	%
Earnings per share:
Basic	$	0.61		$	0.26					$	0.99		$	0.39
Diluted	$	0.60		$	0.26			130.8	%	$	0.97		$	0.39			148.7	%
Weighted average shares outstanding:
Basic		94,355			96,254						94,395			96,343
Diluted		96,059			97,224						95,839			97,136

TABLE 2

HANESBRANDS INC.
Condensed Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)

	June 28, 2008			December 29, 2007
Assets
Cash and cash equivalents	$	96,918		$	174,236
Trade accounts receivable, net		547,617			575,069
Inventories, net		1,342,184			1,117,052
Other current assets		236,021			227,977
Total current assets		2,222,740			2,094,334
Property, net		547,162			534,286
Intangible assets and goodwill		473,984			461,691
Other noncurrent assets		333,685			349,172
Total assets	$	3,577,571		$	3,439,483
Liabilities
Accounts payable and accrued liabilities	$	670,518		$	669,405
Other current liabilities		58,636			19,577
Total current liabilities		729,154			688,982
Long-term debt		2,315,250			2,315,250
Other noncurrent liabilities		142,420			146,347
Total liabilities		3,186,824			3,150,579
Equity		390,747			288,904
Total liabilities and equity	$	3,577,571		$	3,439,483
TABLE 3
HANESBRANDS INC. Condensed Consolidated Statements of Cash Flows (Dollars in thousands) (Unaudited)
	Six Months Ended
	June 28, 2008			June 30, 2007
Operating Activities:
Net income	$	93,368		$	37,438
Depreciation and amortization		54,960			66,263
Other noncash items		7,526			11,765
Changes in assets and liabilities, net		(205,816	)		(13,908	)
Net cash (used in) provided by operating activities		(49,962	)		101,558
Investing Activities:
Purchases of property and equipment, net and other		(74,020	)		(11,485	)
Financing Activities:
Net borrowings on notes payable, stock repurchases and other		45,533			(70,704	)
Effect of changes in foreign currency exchange rates on cash		1,131			1,051
(Decrease) increase in cash and cash equivalents		(77,318	)		20,420
Cash and cash equivalents at beginning of year		174,236			155,973
Cash and cash equivalents at end of period	$	96,918		$	176,393

TABLE 4

HANESBRANDS INC.
Supplemental Financial Information
(Dollars in thousands, excluding per-share amounts)
(Unaudited)

Reconciliation of Reported Operating
Results with Certain Information
Excluding Actions

	Quarter Ended						Six Months Ended
	June 28, 2008			June 30, 2007			June 28, 2008			June 30, 2007
A. Excluding actions data
Gross profit	$	385,589		$	392,770		$	733,111		$	737,716
SG&A		265,849			266,713			519,818			522,492
Operating profit		119,740			126,057			213,293			215,224
Net operating profit after taxes (NOPAT)		91,002			88,240			162,103			150,657
Net income		62,400			52,379			102,801			78,594
Earnings per diluted share		0.65			0.54			1.07			0.81
As a % of net sales
Gross profit		36.0	%		35.0	%		35.6	%		34.1	%
SG&A		24.8	%		23.8	%		25.2	%		24.2	%
Operating profit		11.2	%		11.2	%		10.4	%		10.0	%
Net income		5.8	%		4.7	%		5.0	%		3.6	%
B. Operating results excluding actions
Gross profit as reported	$	380,956		$	380,357		$	725,920		$	720,036
Accelerated depreciation included in Cost of sales		4,633			12,413			7,191			17,680
Gross profit excluding actions	$	385,589		$	392,770		$	733,111		$	737,716
SG&A as reported	$	266,427		$	266,017		$	521,039		$	520,584
Amortization of gain on postretirement benefits included in SG&A		—			2,012			—			4,025
Spinoff and related charges included in SG&A		—			(368	)		—			(1,169	)
Accelerated depreciation included in SG&A		(578	)		(948	)		(1,221	)		(948	)
SG&A excluding actions	$	265,849		$	266,713		$	519,818		$	522,492
Operating profit as reported	$	113,087		$	88,115		$	200,881		$	156,981
Gross profit actions		4,633			12,413			7,191			17,680
SG&A actions		578			(696	)		1,221			(1,908	)
Restructuring		1,442			26,225			4,000			42,471
Operating profit excluding actions		119,740			126,057			213,293			215,224
Income tax expense at effective rate		(28,738	)		(37,817	)		(51,190	)		(64,567	)
NOPAT	$	91,002		$	88,240		$	162,103		$	150,657
C. Net income excluding actions
Net income as reported	$	57,344		$	25,434		$	93,368		$	37,438
Gross profit actions		4,633			12,413			7,191			17,680
SG&A actions		578			(696	)		1,221			(1,908	)
Restructuring		1,442			26,225			4,000			42,471
Loss on early extinguishment of debt		—			551			—			551
Tax effect on actions		(1,597	)		(11,548	)		(2,979	)		(17,638	)
Net income excluding actions	$	62,400		$	52,379		$	102,801		$	78,594
D. EBITDA
Net income	$	57,344		$	25,434		$	93,368		$	37,438
Interest expense, net		37,635			51,230			78,029			102,947
Income tax expense		18,108			10,900			29,484			16,045
Depreciation and amortization		28,696			38,093			54,960			66,263
Total EBITDA	$	141,783		$	125,657		$	255,841		$	222,693