UBS Evidence Lab inside: 2Q26 Preview: We See a Balanced Upside/Downside Skew

研报英文原文证据摘录

UBS Evidence Lab inside: 2Q26 Preview: We See a Balanced Upside/Downside Skew

ests both businesses continue to outperform their underlying markets.

Wholesale demand remains supported by continued strength in premium

offerings such as Comfort Colors, Champion, and ALLPRO, while Retail appears to

be benefiting from continued innerwear share gains, improved shelf positioning,

and new program wins.

Looking beyond the quarter, we continue to believe investors underestimate the

long-term growth potential of both segments. Our framework assumes both the

Wholesale and Retail businesses can grow at a mid-single-digit growth algorithm

supported by market share gains, category expansion, and innovation. In

Wholesale, opportunities include expansion into adjacent categories such as bags,

hats, outerwear, and workwear. In Retail, we see opportunities from activewear

rebuilding, product innovation, and expansion into newer categories such as

scrubs and performance basics. As inventory normalization concludes and

management begins layering innovation initiatives into the Hanes portfolio ahead

of 2027, we expect investors to focus increasingly on channel-level growth and

market-share trends rather than inventory-related noise.

Temporary Revenue Headwinds Rolling Off: We believe an important aspect

of the 2Q26 setup is the temporary nature of the inventory reduction program.

Management indicated the largest impact occurred in 1Q26 and that the

remaining drag is embedded within 2Q26 guidance. As a result, we expect

investors to focus less on reported growth and more on evidence that customer

inventory levels are normalizing and that underlying demand remains healthy. Our

expert work supports this conclusion. Industry contacts noted that elevated