On November 24, 2025, S&P Dow Jones Indices announced that Hanesbrands Inc. (HBI) would be removed from the S&P SmallCap 600 index effective November 28, 2025. The removal follows a decline in the company’s market capitalization to approximately $2.32 billion, below the roughly $8.2 billion threshold required for inclusion.
Hanesbrands reported Q3 2025 revenue of $891.68 million, missing the consensus estimate of $895.80 million by $4.12 million, or 0.46 %. Adjusted earnings per share were $0.15 versus the $0.16 estimate, a miss of $0.01 or 6.3 %. The revenue shortfall was driven by a late‑quarter shift in replenishment orders from a major U.S. retailer, which reduced domestic sales momentum, while cost inflation in raw materials and logistics pushed operating expenses higher.
Segment analysis shows the Innerwear line maintained an operating‑margin of 12.1 % (13.0 % adjusted), supported by strong pricing power and cost‑control initiatives, but the overall brand revenue fell 1 % year‑over‑year. The Champion segment, a key driver of the company’s core apparel business, experienced a modest decline in market share as competition from fast‑fashion retailers intensified. The combined effect of these segment dynamics contributed to the overall revenue miss.
The removal from the SmallCap index is a consequence of the pending acquisition by Gildan Activewear, which closed on December 1, 2025. The merger agreement, announced on August 13, 2025, is expected to lift Hanesbrands’ market value and shift its classification to a larger‑cap peer group. CEO Steve Bratspies noted that “our top‑line results reflect an unanticipated late‑quarter shift in replenishment orders… we are encouraged by our strong back‑to‑school season as the Hanes brand continued to gain market share.”
Index rebalancing will affect ETFs that track the SmallCap 600, but the impact is limited compared to a S&P 500 change. Investor focus remains on the merger, which has already driven significant market attention. The market reaction to the index removal is muted, as the primary driver of sentiment is the strategic combination with Gildan and the associated valuation uplift.
With no new guidance issued due to the merger, analysts will monitor the integration progress and the company’s ability to sustain margin expansion. The removal from the SmallCap 600 signals a lower market cap but does not alter the long‑term growth prospects that the merger is intended to unlock.
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