Hanesbrands' stock jumps after deal to sell Champion for up to $1.5 billion

By Tomi Kilgore

Proceeds from sale of will be used to pay down debt

Shares of Hanesbrands Inc. soared toward the highest prices seen in more than a year Wednesday, after the underwear and T-shirts seller said it was selling its Champion athletic-apparel business in a deal that could be valued at up to $1.5 billion.

The sale to Authentic Brands Group, which is expected to close in the second half of 2024, includes the potential for $300 million in cash if certain performance thresholds are achieved.

Hanesbrands (HBI) expects to receive net proceeds of $900 million from the deal, all of which will be used to accelerate debt reduction.

"The successful completion of this transaction further simplifies our business, deleverages our balance sheet and enhances the company's operations and financial performance," said Chief Executive Steve Bratspies.

The stock shot up 15.8% in premarket trading, putting it on track to open around the highest closing prices seen since February 2023.

The deal completes a strategic review of Champion that was announced in September 2023.

The company said it will update its full-year 2024 financial guidance when it reports second-quarter results, with Champion results classified as discontinued operations.

Hanesbrands' stock has rallied 13.2% year to date through Tuesday, while the S&P 500 has advanced 10.9%.

-Tomi Kilgore

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06-05-24 0840ET

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