M. Scott Lewis
Chief Financial Officer at Hanesbrands
Thanks, Steve.
On a personal note, on behalf of Haynes Brands, I want to express our appreciation for your leadership and all that we've accomplished over the past five years to transform the business and position the company for the future. I look-forward to continuing to work together to drive our strategy and to deliver a strong 2025. Also, let me add my thanks to the global Haynes Brands team. Their continued dedication and commitment drove strong and improving operating and financial performance over the course of 2024. With a simplified and strengthened business model, we believe we're well-positioned to generate strong shareholder returns over the next several years through a combination of double-digit earnings growth and debt reduction and in the longer-term, returning capital to shareholders.
Before I speak to the quarter's results, a quick housekeeping item regarding Champion Japan. Recall, when we announced the Champion sale, we said it will be a licensee for the Champion Japan business for a temporary period of time and eventually move the business to discontinued operations. In the 4th-quarter, we notified Authentic Brands of our plans to exit the Champion Japan license by the end of 2025, ahead of schedule.
As a result, beginning with fourth quarter's results, the Champion Japan business has been reclassified to discontinued operations, which was not contemplated in our previous guidance. Therefore, 4th-quarter and full-year results as well as our 2025 guidance are not directly-comparable to our prior guidance or the current consensus estimates. We provided an earnings handout that bridges our 4th-quarter and full-year results to our prior guidance.
We also provided a supplemental financial packet that includes recast historical financials. Both documents are posted on our Investor Relations website. For today's call, call, I'll focus on continued operations. Overall, we delivered strong 4th-quarter results that were above our outlook across all of our key metrics. Net sales increased nearly 4% on an organic constant-currency basis.
Operating profit increased 33% over prior year, EPS increased 240% and leverage declined by nearly two turns on a net-debt to adjusted EBITDA basis. Turning to the details of the quarter, net sales on a reported basis increased 4.5% over prior year to $88 million. The year-over-year growth reflects a 175 basis-point benefit from translation services revenue and 110 basis-points headwind from foreign-exchange rates.
Looking at our segments, in the US, net sales increased 3% over last year, ahead of our outlook. Despite the challenging environment, our strategy is working and we're winning in the marketplace. Innovation, increased brand investments, incremental holiday programing and performance in the online channel helped drive growth in the quarter, particularly within our socks, women's and scrub businesses. In our International segment, net sales increased 6% over prior year-on a constant-currency basis with growth in each region.
With respect to our Australia business, growth in the quarter was driven by better end-stocks within our own-retail, effective assortment management and strong bonds innovation. Touching briefly on our other segment, the year-over-year increase in net sales was driven by short-term transition service agreements related to the sale of our Champion business. We expect these agreements to wind-down over the course of 2025. We've excluded these sales from our organic constant-currency growth calculation.
Turning to margins. We saw continued year-over-year expansion in both our gross and operating margins as cost-savings initiatives are flowing through and we continue to see a year-over-year benefit from input costs as we anniversary the impact from feek inflation. Our cost-savings and assortment management initiatives are driving structurally higher and sustainable margins while supporting increased brand investment. For the quarter, gross margin increased 400 basis-points over prior year to 44.1% and our operating margin increased 300 basis-points to 14.2%.
With our visibility to input cost and our cost-savings initiatives, we're confident we can deliver year-over-year expansion in both our gross and operating margins in 2025. And with respect to earnings per share, EPS increased 240% over last year to $0.17. The growth was driven by the combination of higher profit margins and a $7 million reduction in interest expense as we continue to pay-down debt.
Turning to cash-flow and the balance sheet, with better-than-expected profit performance, lower cash interest and disciplined working capital management, we generated $264 million of cash-flow from operations for the year, which exceeded our outlook. We also further strengthened our balance sheet. Through the combination of the net proceeds from the Champion sale and strong cash generation, we paid down over $1 billion of debt during the year. Leverage at the end of 2024 was 3.4 times on a net-debt to adjusted EBITDA basis, which was nearly two turns lower than the end of 2023.
And now turning to guidance. While all my comments will refer to adjusted results from continuing operations and will be based on the midpoint of our guidance ranges. We believe we're well-positioned to deliver positive sales growth on an organic constant-currency basis, along with solid operating profit and EPS growth for the year despite a continued muted consumer environment. We expect further improvement in both our gross and operating margins for the year, given the input cost visibility we have on the balance sheet and our cost-savings initiatives.
Our outlook also assumes that we refinance all of our 2026 maturities in the first-quarter of 2025. With respect to the current situation regarding tariffs with China, Mexico and Canada, we do not expect a material impact on our cost. Products from China to the U.S. represents a low-single digit percent of our U.S. cost-of-goods-sold. Therefore, the recent incremental tariff does not materially impact our input costs and is factored into our guidance. However, with respect to Canada and Mexico, we do not source or manufacture any products for the US from either of those countries.
Looking at our full-year, we expect net sales of approximately $3.5 billion, which represents approximately 1% growth on an organic constant-currency basis. We expect operating profit to increase approximately 10%, operating margin to expand approximately 125 basis-points to 13.1% and EPS to increase more than 30% over prior year and we expect to generate approximately $350 million of operating cash-flow for the year.
Turning to the first-quarter, our outlook assumes net sales increased 1% to approximately $750 million. On an organic constant-currency basis, we expect net sales to be consistent with prior year. We expect operating profit to increase nearly 30% over prior year and operating margin to expand approximately 190 basis-points. And we expect EPS of approximately $0.02 as compared to a loss of $0.05 last year.
So in closing, I'd like to echo Steve's comments. We delivered strong results for the quarter and the year as we're seeing the benefits of our transformation strategy. We came into 2025 as a new and better company, well-positioned to build upon our competitive advantages and drive increased shareholder returns through sales growth, further margin expansion, strong cash generation and continued commitment to pay-down debt.
And with that, I'll turn the call over to T.C.
