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




FOR IMMEDIATE RELEASE

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

HANESBRANDS INC. REPORTS FOURTH-QUARTER 2007 RESULTS

WINSTON-SALEM, N.C. (Jan. 31, 2008) – Hanesbrands Inc. (NYSE: HBI), a leading marketer of innerwear, outerwear and hosiery apparel, today reported results for the 2007 fourth quarter.

Diluted earnings per share in the fourth quarter increased to $0.52 from $0.25. Non-GAAP diluted earnings per share, which exclude actions, increased by 31 percent in the quarter to $0.38 as a result of increased sales and cost-reduction initiatives. (See non-GAAP description below.) Total net sales in the quarter increased by 2.4 percent to $1.16 billion.

Total net sales in the quarter increased by 2.4 percent to $1.16 billion.

"We capped a successful first year, in which we exceeded our financial goals, with solid performance in the fourth quarter in a tough consumer climate," said Hanesbrands Chief Executive Officer Richard A. Noll. "And, as we have done all year, we continued to generate strong cash flow, using it to reduce long-term debt by an additional $50 million in the quarter."

Noteworthy Financial Highlights

Selected highlights for the fourth quarter and fiscal year ended Dec. 29, 2007, include:

  • Total net sales in the quarter increased by 2.4 percent to $1.16 billion – the fourth consecutive quarter of sales growth. By sequential quarter, sales in the fiscal year grew by 0.7 percent, 0.2 percent, 3.1 percent and 2.4 percent. Total net sales for the full fiscal year increased by $71 million, or 1.6 percent, to $4.47 billion.

    "One of our strategies is to invest in our largest and strongest brands with innovative key items supported by great media," Noll said. "This strategy is delivering results."

    For the quarter and the full year, Hanes, Champion and Bali brand sales increased. The Champion brand has recorded double-digit sales growth for three consecutive years. For the full year, sales to each of the company’s top three customers increased.

  • Diluted earnings per share in the quarter were $0.52, up from $0.25 a year ago, while diluted EPS for the year was $1.30 versus $2.16 a year ago. The full-year decline reflected increased interest expense as a result of the company’s independent structure, higher restructuring costs and a higher tax rate.

    Non-GAAP diluted EPS increased by 31 percent in the quarter to $0.38 from $0.29 a year ago. The increase was primarily a result of increased sales and operating profit and lower interest expense.

  • Operating profit in the quarter, based on generally accepted accounting principles, increased to $125.9 million, from $96.2 million a year ago. For the year, operating profit increased to $388.6 million compared with $366.2 million a year ago.

    Non-GAAP operating profit increased by 6.6 percent in the quarter and 3.3 percent in the year, to $101.8 million and $432.0 million, respectively. The company’s non-GAAP operating profit margin, a measure the company uses to better assess underlying performance because it excludes actions, was 9.7 percent for the year, compared with 9.5 percent last year.

    "We achieved operating profit growth and improved our margins during a year of significant change," Noll said. "We exceeded our goal to offset our stand-alone company costs and selected increased investment in our business with cost savings from consolidation and moving supply chain operations to lower cost countries."

  • Hanesbrands used its continued strong cash flow from operations to prepay long-term debt in the quarter by $50 million. Cash flow from operations for the year increased by 28 percent to $359 million. In fiscal 2007, Hanesbrands repaid $178 million of long-term debt, repurchased $44 million in company stock and voluntarily contributed $48 million to its qualified pension plans.

    Since Hanesbrands spun off in September 2006, the company has reduced long-term debt by $285 million and voluntarily contributed $96 million to its qualified pension plans.

    (Operating profit excluding actions and diluted EPS 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 quarter and full year were plant closings and reorganization, gain on curtailment of postretirement benefits, amortization of gain on postretirement benefits, separation of pension plan assets and liabilities, nonrecurring spinoff and related charges, other expenses, and the tax effect on these items. See Table 4A and 4B for details and reconciliation with reported operating results.)

    Other Highlights

    As part of continued investment in brands and marketing, the Champion brand launched its “How You Play” advertising campaign on Nov. 7, the first campaign for the brand since 2003. On Oct. 31, Hanesbrands announced a 10-year strategic alliance with The Walt Disney Company that includes basic apparel exclusivity for the Hanes and Champion brands, product co-branding, attraction sponsorships and other brand visibility and signage at Disney properties. The alliance included the naming rights for the stadium at Disney’s Wide World of Sports Complex, now known as Champion Stadium.

    As part of its global supply chain strategy, Hanesbrands acquired in December the Inversiones Bonaventure S.A. de C.V. hosiery sewing operation in Las Lourdes, El Salvador. The 900-employee Bonaventure plant had been a contract sewing supplier for Hanesbrands for 12 years.

    “We are very pleased with our performance in our first year of independence,” Noll said. “We delivered sales growth, margin expansion and continued strong cash generation. This puts us in good position as we seek to achieve our long-term growth goals for sales, operating profit and earnings per share.

    “This would not have been possible without the significant efforts of our worldwide workforce to manage change, embrace our improvement strategies and focus on our competitiveness. I appreciate all of their efforts and commitment to our success.”

    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 10 a.m. EST today. The broadcast may be accessed on the home page of the Hanesbrands corporate Web site, www.hanesbrands.com. The call is expected to conclude by 11 a.m.

    An archived replay of the conference call webcast will be available in the investors section of the Hanesbrands Web site. A telephone playback will be available from approximately noon EST today until midnight on Feb. 7, 2008. The replay will be available by calling toll-free (800) 642-1687, or by toll call at (706) 645-9291. The replay pass code is 29092926.

    Cautionary Statement Concerning Forward-Looking Statements

    Statements in this press release that are not statements of historical fact are forward-looking statements, 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 Hanesbrands Inc. Reports Fourth-Quarter 2007 Results – Page 4 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 or labor; our substantial debt and debt-service requirements that restrict our operating and financial flexibility and impose significant interest and financing costs; and other risks identified from time to time in our most recent Securities and Exchange Commission reports, including the 2006 Annual Report on Form 10-K, 2007 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, including Hanes, Champion, Playtex, Bali, Just My Size, barely there and Wonderbra. 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.

    TABLE 1

    HANESBRANDS INC.

    Condensed Consolidated Statements of Income

    (Amounts in thousands, except per-share amounts)

    (Unaudited)

    Quarter Ended

    Year Ended

    December 29,  2007

    December 30, 2006

    % Change

    December 29, 2007

    December 30, 2006

    % Change

    Net sales:

    Innerwear

    $      639,788

    $         644,685

    $       2,556,906

    $     2,574,967

    Outerwear

    325,262

    297,978

           1,221,845

      1,154,107

    Hosiery

    76,983

    87,359

       266,198

         278,253

    International

    118,779

    104,603

       421,898

         400,167

    Other

    10,291

     8,585

         56,920

           44,670

    Total segment net sales

    1,171,103

    1,143,210

                4,523,767

           4,452,164

    Less: Intersegment

    11,973

    11,705

         49,230

                48,698

    Total net sales

    1,159,130

    1,131,505

    2.4%

         4,474,537

           4,403,466

     1.6%

    Cost of sales

    799,275

    776,782

        3,033,627

           2,960,759

    Gross profit

    359,855

    354,723

    1.4%

       1,440,910

          1,442,707

    -0.1%

       As a % of net sales

    31.0%

    31.3%

           32.2%

                 32.8%

    Selling, general and

      administrative expenses

    266,937

    285,043

           1,040,754

           1,093,436

       As a % of net sales

    23.0%

    25.2%

        23.3%

                   24.8%

    Gain on curtailment of     

      postretirement benefits

    (32,144)

    (28,467)

               (32,144)

              (28,467)

    Restructuring

    (802)

    1,965

                43,731

                11,516

    Operating profit

    125,864

    96,182

    30.9%

              388,569

              366,222

    6.1%

       As a % of net sales

    10.9%

    8.5%

              8.7%

                    8.3%

    Other expenses

    3,795

    7,401

                     5,235

                   7,401

    Interest expense, net

    46,991

    53,184

                 199,208

                 79,621

    Income before
      income tax expense

    75,078

    35,597

                 184,126

              279,200

    Income tax expense

    25,285

    11,803

                   57,999

                71,184

    Net income

    $        49,793

    $           23,794

    109.3%

      $         126,127

    $        208,016

     -39.4%

    Earnings per share:

    Basic

    $            0.52

    $               0.25

      $               1.31

    $              2.16

    Diluted

    $            0.52

    $               0.25

      $               1.30

    $              2.16

    Weighted average shares

      outstanding:

    Basic

    95,381

    96,309

                95,936

                96,309

    Diluted

    96,650

    96,620

                96,741

                96,390

TABLE 2

HANESBRANDS INC.

Condensed Consolidated Balance Sheets

(Dollars in thousands)

(Unaudited)

December 29, 2007

December 30, 2006

Assets

Cash and cash equivalents

 $                  174,236

 $                     155,973

Trade accounts receivable

             575,069

             488,629

Inventories

          1,117,052

          1,216,501

Other current assets

             227,977

         210,077

        Total current assets

          2,094,334

          2,071,180

Property, net

             534,286

             556,866

Intangible assets and goodwill

             461,691

             418,706

Other noncurrent assets

             349,172

             388,868

        Total assets

 $              3,439,483

 $                  3,435,620

Liabilities

Accounts payable and accrued liabilities

 $                 669,405

 $                     587,542

Other current liabilities

                19,577

          23,639

        Total current liabilities

             688,982

          611,181

Long-term debt

          2,315,250

2,484,000

Other noncurrent liabilities

             146,347

                271,168

        Total liabilities

          3,150,579

          3,366,349

Equity

               288,904

          69,271

        Total liabilities and equity

 $               3,439,483

$                  3,435,620

TABLE 3

HANESBRANDS INC.

Condensed Consolidated Statements of Cash Flows

(Dollars in thousands)

(Unaudited)

Year Ended

December 29, 2007

December 30, 2006

Operating activities:

Net income

$                   126,127

 $                    208,016

Depreciation and amortization

                131,676

               133,161

Changes in assets and liabilities, net, and other

                 101,237

                              (60,964)

Net cash from operating activities

           359,040

             280,213

Investing Activities:

Purchases of property and equipment, net, and other

                    (101,085)

                              (81,102)

Financing Activities:

Transactions with parent companies and other

                    (243,379)

                            (555,876)

Effect of changes in foreign currency exchange rates on cash

3,687

                  2,106

Increase (decrease) in cash and cash equivalents

            18,263

                            (354,659)

Cash and cash equivalents at beginning of year

             155,973

          510,632

Cash and cash equivalents at end of year

 $                  174,236

 $                    155,973

TABLE 4

HANESBRANDS INC.

Supplemental Financial Information

(Dollars in thousands, except per-share amounts)

(Unaudited)

Reconciliation of Reported Operating Results with Certain Information Excluding Actions

Quarter Ended

Year Ended

A. Operating profit excluding actions

December 29, 2007

December 30, 2006

December 29, 2007

December 30, 2006

Operating profit as reported

$            125,864

$           96,182

$         388,569

$                366,222

Plant closings and reorganization

 7,457

             18,771

83,183

                  32,715

Gain on curtailment of postretirement  
  benefits

               (32,144)

            (28,467)

           (32,144)

                  (28,467)

Amortization of gain on postretirement
  benefits included in SG&A

                 (1,341)

                                       -

             (7,377)

-

Separation of pension plan assets and

  liabilities included in SG&A

 1,409

                      -

             (3,408)

-

Spinoff and related charges included in
  SG&A

 509

               8,977

3,209

47,887

Operating profit excluding actions

$            101,754

$           95,463

$         432,032

$                418,357

Percentage of net sales

 8.8%

 8.4%

 9.7%

9.5%

B. Net income excluding actions

Net income as reported

$              49,793

$           23,794

$         126,127

$                208,016

Plant closings and reorganization

 7,457

             18,771

83,183

                   32,715

Gain on curtailment of postretirement  
  benefits

               (32,144)

              (28,467)

           (32,144)

                   (28,467)

Amortization of gain on postretirement
  benefits included in SG&A

                 (1,341)

-

             (7,377)

-

Separation of pension plan assets and

  liabilities included in SG&A

1,409

-

             (3,408)

-

Spinoff and related charges included in
  SG&A

509

               8,977

3,209

47,887

Other expenses (Losses on early
  extinguishment of debt)

3,795

               7,401

              5,235

7,401

Tax effect on plant closings and
  reorganization, gain on curtailment,
  amortization of gain, separation of pension
  plan assets and liabilities, spinoff and
  related charges, and other expenses

                 6,842

           (2,216)

           (15,340)

                   (15,179)

Net income excluding actions

$              36,320

$          28,260

$         159,485

$                252,373