Why Did Hanesbrands Inc. (HBI) Shares Skyrocket in Premarket Trading?

Hanesbrands Inc. (HBI) shares experienced a dramatic surge in premarket trading on August 12, 2025, jumping over 41% following reports of a potential $5 billion acquisition by Canada’s Gildan Activewear. The Financial Times reported that talks between the two apparel companies are at an advanced stage, with a deal potentially being finalized by the end of the week. This development comes at a time when Hanesbrands has been struggling with the impact of tariffs and significant stock declines throughout 2025, making the acquisition news a potential lifeline for the beleaguered innerwear manufacturer.

HBI Stock Surges Amid News of $5 Billion Acquisition

Canada’s Gildan Activewear is reportedly nearing a deal to acquire Hanesbrands at a valuation of approximately $5 billion, including debt, according to sources cited by the Financial Times. The talks are described as being at an advanced stage, though the report cautioned that an acquisition may not ultimately be finalized.

This potential deal would represent a significant premium for Hanesbrands shareholders, given the company’s recent struggles and declining market value. The timing of this potential acquisition appears strategic for both companies. Hanesbrands has been reeling under the impact of tariffs, which have affected 75% of its sales and contributed to a more than 40% drop in share price year-to-date through 2025.

Meanwhile, Gildan, which primarily manufactures basic apparel for customization and personalization, would gain access to Hanesbrands’ established innerwear brands including Hanes, Bonds, and Maidenform.

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HBI Stock Surges Over 40% in Premarket Trading

Hanesbrands shares closed at $4.83 on August 11, 2025, but surged to $6.85 in premarket trading on August 12 at 8:13 AM EDT, representing a remarkable 41.8% increase. This premarket surge brought the stock’s value closer to analyst price targets, which average $6.83 with a high of $16.30. The dramatic overnight movement highlights the market’s positive reception to the potential acquisition news.

The company’s recent financial performance provides context for why an acquisition might be attractive to both parties. Despite facing significant headwinds from tariffs, Hanesbrands recently beat market estimates for profit and revenue in the second quarter and raised its annual forecast, citing higher cost savings.

From a valuation perspective, Hanesbrands presents an interesting opportunity for acquirers, trading at a trailing P/E ratio of 10.06 and forward P/E of 8.75, with annual revenue of $3.54 billion and positive free cash flow of $248.73 million.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.