HBI - Earnings call transcript Q4 2018

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Operator

Good day, ladies and gentlemen, and welcome to the Hanesbrands Fourth Quarter 2018 Earnings Conference Call. [Operator Instructions] As a reminder, today's conference is being recorded. I'd now like to introduce your host for today's conference, Mr. T.C. Robillard, Chief Investor Relations Officer. ahead. go please Sir,

T.C. Robillard

and webcast. the everyone, conference quarterly call and welcome day, Hanesbrands' to investor Good

hanes.com pleased section be quarter of a are review The our found everyone We news to be had this the progress of update provide has the website. FAQ issued in after call on news an release, release can the earlier chance updated replay fourth a of our we Hopefully, here XXXX. Investors to today today. to and document

On question-and-answer call make on are with found detailed may statements, statements differ the uncertainties and we today, forward-looking various company and may to the our only or any SEC our website releases. and in otherwise based in our and as risks beliefs that either may to remarks materially. prepared cause are These in in certain results on be filings charges subject operations as current are session. to risks news our expectations noted, or The time today's the the acquisition, XXXX to statements, all and action-related to undertake does are integration, associated forward-looking financial These our represent which references guidance, at as made. not well results, consolidated exclude they continuing expenses. Unless revise or which and well our other update as speak actual

be GAAP Financial Evans, and call a Officer; including in the our our can to information, reconciliation press Additional found Hytinen, Chief Executive measures release. other of Barry Chief and Gerald me performance today's these are today on Officer. With non-GAAP

up turn your then, will over Barry Gerald. the questions. we'll provide I Gerald open call, remarks. today' now For And some to call will and to it brief

Gerald W. Evans Jr.

you, T.C. Thank

cash with pleased reduced generation, and significant flow are including We growth, our fourth organic leverage. performance, revenue strong quarter very

momentum growth, XXXX, accelerate over bring our with revenue and global long-term growth fourth we a from four spoke expected Investor results diversified back scale Day, as innerwear the and cash our U.S in leverage quarter our champion, our higher range. significantly meaningful the flow with are in quarter. across years. cash well about our next business growing line improvement saw our and than quarter international well flow how within stronger look as provide into our that results business At were three our increased as delivered in And And our third grow Our shareholder we operating business consumer-direct, to delivered our This performance positioned years. initiatives: the to our profit returns path to we guidance. and generate several best we’ve

fourth Our operating are cash we May. results we quarter strong laid toward goals our out progress outlook in the underscore achieving making XXXX flow and the

X.Xx. EBITDA XXXX. Organic over any Fourth of than currency XX more reduced years. currency of as continued Touching Champion The over quarter. history. full-year leverage of And growth operating initiatives: quarter the growth to to in generated revenue increase $X.X company's our growth operating expanded our by we the revenue growth prior increased expectation eight flow basis a our points for quarter, in X.Xx in in well the on first growth consecutive X% margins s. since on quarter marked and the X% quarter XX%, of our For highest constant growth in exceeded growth billion basis highest XXXX, X% debt profit net quarter accelerate organic year. our cash our organic adjusted was And constant quarter. We our to as Xth

global and operating respect currency. quarter. more our with XX%, on sales for another the Innerwear than basis, in coordinated and globally that businesses and strategy demand to that last growth, Americas. segment as driving the Australia, elevate organic and This currency revenue quarter constant approximately to highlights once XX% Asia, in the increased compared on Champion Global comes channel, in year's business, top again sales mass the high the than revenue line growth of pleased And fourth year up our of own by constant our International our Excluding was revenue, in we outlook. our quarter channels, With Innerwear U.S to global a and the represented product. Champion are which online prior single-digit more delivered we XX% our were and Champion driven XX% all margin define Consumer-direct increased stores is brand of

X% For remains the landscape the challenging. our improved revenue sequentially. down while business basics Intimates said, increased U.S retail and quarter, over year last That

encouraged in the segment. by Despite door signs bankruptcies are in but positive both segment fourth Intimates prolonged a we basics for XXXX number growth return department in ongoing of underlying than our the our U.S Innerwear quarter the closings to our We’re of given November, business, held a channel. trends, the improving midtier to view and impeding and we consistent decided in store U.S uncertainty our more take conservative

with reflects channels. in closings outlook these to Our now a more respect cautious stance door

However, diversified this businesses. strong than we’re a our global as offsetting company with more growth

and at Activewear as growth. our our fuel we're in the segments XXXX, forecasting X.X% U.S to constant For the approximately midpoint organic International continues revenue growth overall currency momentum

lower the XXXX, margin Xx year. committed of should which U.S investment taking from and XX we inflation. and our Intimate flow to long-term brands cost costs business streamline understand $XXX innovations. year. this cash our we expansion We're million our our fully growth. of also speed as at to focus on forecasting We're bring increase range, below Innerwear points further committed increases additional of we're midpoint market. end an of at and We offset behind to to U.S our remain basis price midpoint, leverage we're operating XX% implement the marketing We investors our input with $XXX by business last the And or global returning increasing and steps operating expect key million supply-chain, increase our our In to to the leverage approximately approximately scale

we lose a to of for are the organic to sight such six driven producing of want global these intended don't delivering a a we diverse, have And areas company, quarters growth. become avenues We're portfolio their consumer-direct we being Champion, revenue many fact And row that the with in consistent is However, profitable into, efforts operating businesses by growth results. apparel International. and and have counting. diversified this as transformed

scale We brand our improve our strength are leveraging operating global to and margins.

those call well accelerated positioned close. flow to the I'll Our several next to value leverage our down to we cash accelerate generation shareholders Barry. come years. With acquisition our momentum, creation to is feel deliver turn all and over poised integrations we're as that, to the coming over With a

Barry A. Hytinen

share Overall, operating metrics, quarter results per solid profit, Gerald. earnings achieved including we all cash Thanks, as flow. or our we key expectations sales, delivered exceeded fourth our of and across

the expense included were of million, impacted acquisition to $XXX from For the from a prior million $X.XX X.Xx. On the basis, with from XX increased XX.X%.Adjusted constant $XXX debt, operating price million operations our to adjusted for details quarter. basis X.X% partially points quarter's margin billion, $X.XX, we product input of exchange. leverage over generated the contributions, Sales support Adjusted let's and by exchange flow turn consistent foreign cash from X.X% investments quarter, while foreign to million $XX and operating an certain to and points profit was $XX and results. last increases driven respectively. expanded offset We With currency acquisition down and as were year offset the XX% to increase pay Operating by inflation, year, growth. the over mix that which benefits margin contributions and increased summary, million lowering margin last contributions in and an of sales XX.X% Gross last products. increased sales organic $X.XX in Activewear per headwind $XXX of synergies earnings acquisition $XXX increased over million share year. basis year compared management, cost XX GAAP to

with For XX% our respectively. tax guidance charges acquisition year earnings the per in the tax and XXX%, related Normalizing GAAP of was adjusted as rate increased line our of prior impact the for million and of XX.X%. $XX and reform, other share quarter, were

department growth continue you in men's to improvement the and in consumer through innovation flat segment double-digit the in guidance. to midtier our year be Shapewear sales, the bra product designs strong store closings retail and drove by which impacted U.S while was quarter. revenue our performance. lower by by sales underwear, for line and the from driven take were offset in door This challenge Innerwear channel. sales within me our to Within growth with reception landscape new and was X%, women's quarter. last declined an let Basics which Now Intimate, Intimate revenue increased X% last

contribution basis corporate or well points was increased profitability basis, and And straight XX% of and is to take margin segment from in the the mix business than strong which exchange forecasted constant included quarter. and over year-over-year. the me, N in International network On as XX.X%, For support reflecting away earlier XX.X% X.X% the International's Things $XX expected, XX% Champion our for to points distribution growth over planned that year. declined support headwind operating organic quarter, This and performance Domestic driven was an quarter $XX XX% segment, mass organically. consistent the last Champion second was in In businesses. by growth American U.S XX.X%. to Innerwear's compared $XX rates. sales, Champion Activewear in in million An our the Bras effects excluding operating year $XX Casualwear sales channel margin year. quarter increased the U.S the last above expansion. sales increased XXX increased from Activewear's or a XXX scale International's from margin initiatives, margin million due CX to future as operating million quarter synergies as from improved inclusive increased a million, less at operating the of which product had mass, average our we foreign X%. important to and investments the brand sales currency our declined basis

me Before our touch on Champion move business. on, Global I let

For revenue over over XX%. constant revenue increased currency last the quarter, on XX% while basis, CX excluding a year, increased

equally currency from in and up International. constant $X was XXXX CX For $X.XX excluding billion, the revenue, split Domestic approximately full-year, and we between billion

sheet to we from balance the quarter, the support flow for increased on was up flow $XXX items. our year-on-year, primarily the investments to In operations. generated cash Inventory cash and global million products. demand moving of to Champion Now due

year last million of quarter both X.Xx Our our on number EBITDA have to down receivables now cycle over X.Xx details from acquisition down leverage, Therefore, our XXXX in Bras a To help assumptions pay in early cadence eight adjusted prior the year. Things. down on lowering we debt focus to and of cash basis. provided assist you N $XXX with and on leverage of the models, document. day our versus that on peak to an after is certain net the first focus improvement year. from significantly a and the in in This our comments And resulted of With guidance. of payables to respect turning quarter, guidance XXXX FAQ full-year will my guidance in describe I should we your debt

For at growth approximately we of constant X.X%. midpoint, X% and sales approximately expect organic of the total growth full-year the currency

the outlook $XX that impacting first headwind with currency of million Our the of majority reflects quarter. approximately vast

approximately to year low It business Champion, a excluding assumes business full-year. grows double-digit organic also a midpoint, segments, at rate that declined we quarter, constant impact assumes our a the mid majority remaining door This growth rate X% elasticity. and a decline quarter For midpoint U.S in half the with our assumptions shift and The the decline yield guidance to assumes our Activewear, and our first outlook CX the With we mentioned, should sales both reflects improvement for respect growth. the U.S X%. business products. total the the expect impact to of the of in in in the our to in continue significant of of these each CX as trend the the mix X% Innerwear first-quarter margin for teens revenue our each a of view Activewear segment X% segment The at revenue Casualwear our expected in and X.X% in American timing in our as full-year and Gerald at midpoint in due price on an full-year reflects quarter. vast expansion more decline decline the conservative of CX currency second of the growth American is year. the full-year this and first from outlook of closings, improving quarter. This margin increases In higher-margin than quarters for our Casualwear approximately

driven our the quarter, the midpoint For organic approximately growth segment, first sales an full-year to approximately segment sales of On expect X% In the assumes Innerwear Americas. increase guidance Activewear growth, well as business our as International are XX%. Australia European business. approximately we and macro by our constant basis, reflects guidance reported of in Champion currency impacting our X%. our our International, Asia, this Partially offsetting headwinds the Innerwear businesses

For adjusted which from of and guidance of Bras the quarter, midpoint, basis our margin includes growth $XX we expansion. N revenue approximately the margin of first of approximately gross At full-year X%, expect XX and Things expansion points reported operating contributions points the basis currency XX nonorganic implies million approximately headwind.

approximately of a expenses range XX%. of Therefore, and million. $XXX full-year adjusted the expect $XXX million approximately guidance midpoint and We is at our our of net rate other tax approximately interest income

outstanding approximately Our guidance XXX million. assumes diluted shares of

as is profit would of that isolation, to previously million approximately we've drive Our and $XX million actions, our reduction approximately $XX including we in remaining which $XX the within of expect supply as Western million incremental as deliver overhead Hemisphere acquisition network. associated This XXXX charges, actions outlook cost integrations estimated, of of $XX of chain higher of our well million our position completion coming These assumes these to principally profitability. reflect costs, improved plan improve In are $XX all the million charges XXXX. approximately with our than expanded cash.

Lastly, cash operations operations to cash expect expect flow the and $XXX $XXX from we used million with consistent between first of flow And million be respect flow, generate with our to XXXX. cash half. seasonality, to in in from we normal

leverage allocation to we free a X.Xx our to focused net cash the priority currently on XXXX, at Therefore, using end flow the be remains approximately our on adjusted EBITDA year. down all For debt. capital pay to debt of excess project basis

So we a in fourth strong delivered closing, quarter.

Our diversification efforts delivering organic growth. consistent are

we're accelerate will additional taking in call to profitability and are back our well-positioned beyond. We to with that, T.C. actions and And XXXX I growth turn over improve to cash the flow further

T.C. Robillard

prepared concludes remarks. Thanks, Barry. our That

will will Operator? the continue We allows. over your taking now begin back to question-and-answer will session. we time questions to the as call the operator and turn I begin

Operator

Riley line [Operator Anderson first with comes of question the Our Instructions] Susan from B. FBR.

now open. Your line is

Susan Anderson

products. guess, also growth bit about job strongly. then, that more any Nice morning. Good Hi. there's I new the CX you XXXX Maybe if Champion growth. to the growth the then wanted maybe in and It's are little look talk opportunities new brand could mass drilldown it the after through shelf just think the to a profile space, on quarter. across regions, for I nice where we see and the out growth continued you And if thoughts doors within exits the also as business? a

Gerald W. Evans Jr.

you. is thank Susan. This Gerald. Hi, Yes,

of it And showed paths thought in we our diversify put profitable business as that many one of fourth place to the great are story, and We those brand it's we to for strongly really brand quarter. tremendous success is has We and story. a proud create had the The Champion growth. look the at efforts us. of elevating globally reuniting very that the certainly

the around leaving quarter. of XXXX it our noted again The double-digit a our we the rate to the is the strong is world are XXXX. -- As we world. billion pace -- really we $X strength above in comments, our around XX% goal We the grew goal fourth acceleration us and really in by in and saw XXXX, expecting of ahead noted that at in reach well with growth

was it excluding a brand. we -- the it basis, Champion CX, on our For through example, that see expansion up within global coming XX% wholesale And we partners.

we're We also and seeing own online. through and our come world around see the stores it it partner stores

some we're fact, geographies market. growth of In bringing entered as the we're now is that on we’ve China new seeing in

well as us. develop in China -- presence our for begin Korean of has expansion to market beginning nice seeing as We’re to the

carry continue had the opportunity as personal So important and Champion. This XX the of next retail launched to anniversary a our is continue see to forward just options hundredth and that’s brand with to to is first very to we It to opportunity more for we’ve We perform continue point-of-sale. going a on to great is look of that build brand on this review global see to a lot to brand. From campaign that the I brand at the looks generation for of -- style we just particular we to a just year we that. runway the certainly line. brand CX, fall behind look the of group well into a at more continues to an consumer us. focus adopting us. for from really young -- incorporate at And lots This XX-year-old standpoint the business

As our to but growing one emerge that upside just to you options from tell optimize the in be Champion the at we of first momentum well. comments, continue performance continue as can the And to look to that for we the have would priority to were business, if my brand. strong is

Operator

with question Our Omar Evercore. next from Saad comes

Your now open. line is

Omar Saad

talk The a question. Maybe morning. given debt how and really brand. the Great you significantly But you’re that is Champion of where the guys. the got a talking channels? thinking doing, there reduction benefit across flow feels how forward lot probably investment my a Really point as for about you you a increasing Thanks like more about want where you investment feels basics, like demand especially too nice are and and on about see cash as investments. brands going well, for Maybe this Really the around at it to website another more follow-up do brand it I about keep that. -- you’re spend, when production what was the the brand area possible? prioritizing How on acquisition, could to is opportunity, room Champion to about marketing the segmenting talk -- Champion thinking you’re Thanks. aggressive as could from it talent much business quarter. you’re ask Champion. taking Good segmenting strong basics could

Gerald W. Evans Jr.

Yes, Omar. right track. -- are definitely on Sure, the we you

stepping are I my prior We the up as in investment noted comment.

global is, first done the first campaign. launch our One we’ve things of is

As you efforts we're very as that as our campaign. the connect to up know, this we've way used well digital with stepping consumer, younger effectively driving global

was further online for segmentation about lift have the fault is brand the world. a what one global our line working I Our that to the their the develop its the our and of saw in I with things others And well having business sites line the as presence developing prior opportunity focuses in a key able the of lot does we’re around and development [ph] on key that from connection products as well. And global and as our brands, land of the great of our of is one part note. own is website referenced of to

well core by placing for customers our brand So and the that’s within reference we really the channel. well. to channels brand the strong differentiation the business socks carefully differentiated customers. brand our developing and the presence business, selectively was underwear the individual the within and keep of are by that customer that and even are that nicely its segmenting we customers, The as around basics and basics and within for strength as channel very behind keep And

Operator

with from Macquarie. comes question next Vasilescu Laurent Our

is Your open. line now

Laurent Vasilescu

to you that in does non-CX go guide business big Is that this I Good how about XXXX Activewear guidance thanks million be CX Activewear growth the the business where in we up can That imply excel Casual way my on If by $XX the it the for for the think was and will and Thank taking right question. to for about XXXX XXXX. American And us X%. then, you. for XXXX? of would about? U.S year. business X.X% morning and wanted the take hone tell

Barry A. Hytinen

This Laurent. is Barry. Good question. Hi,

US over dive of the a Activewear to quarter help really me to Let and up slightly planning Activewear, U.S the be for Activewear, XX%. everyone. Within deep little into half U.S first first for Activewear

the as be X%. year and let's the X.X%. planning for We're to to projecting mid down currently we're say noted, you flat be the Now up third singles, quarter basically to be high segment fourth to the quarter

by XXXX, dive if deeper, me $X.XX Now let about you of U.S maybe the that framing on some start Activewear was questions billion for the segment. In we based had. just

Now that’s CX Activewear of of XXXX. in in made million $XXX up

half Champion, U.S. recall billion, was that Champion was in about the the of which $X.XX Global of As

So the about. that $XX but million in $XXX basics asking in is that U.S for Omar was Innerwear of total Champion, that million

U.S Casualwear lot businesses segment, So of in balance alternative there's Activewear about bookstore, American Activewear. includes in in our there's million $XXX million sports of of U.S of our our Champion 'XX apparel, business, a apparel, $XXX The that, the there.

So turning to were correct. XXXX, you

For that really half. is the planning down much CX, we're in of back it and

in We the X%. we the down it's so X%, about half are saw in quarter, planning decline be the first fourth line down to with

As on first got good we Gerald already. visibility bookings half noted,

for or XX% winds the back $XX the million million, quarter, As million down, down $XX down, respectively, XX%, the fourth $XX quarter for in say, we're the about that’s to be about half. third program planning and

Activewear be of growth that decline We've for XX% a U.S high over segment. CX up basis on Champion the which a percentage about to for just is Now full-year. the got XXs, in million U.S million the brings $XX of or $XXX

but quarter, We have quarter in in think through plan we we already though frankly and is the being that conservative as I of be the that us to where from trends and of this naturally And area just saw comps more than Champion frankly we’ve Now across 'XX customers. is an with that prove higher all out products all we continue the growth, to to move is transition that update year. the by margin brings the impacted year-on-year of you you Casualwear the we that to more XX% and we higher in fuel balance that the that fourth double-digit through the we assume quarters. well, as half. year-on-year about be the incredibly business full-year, Activewear, because trajectory year, growth back its anticipate probably $XX we additionally the and start the the we is And could to XX%, we balance of transition of U.S growth will first which the of mentioned as down, up kind following which the tapers doing the there with say, American the bookings is lap of business million prudent or

was to So a I packet. the appreciate that but on you help lot, I question. wanted

Operator

Our next Jim question Stifel. comes from with Duffy

open. now is line Your

James Duffy

Thank work the flow, operation between cash from you. at you cash Good GAAP net at blocks working components XXX the building to speaking help guys. us morning. the guide Nice the midpoint? guide 'XX ops XXX bridge the flow guidance, the on of that flow gap midpoint income and at cash Barry, capital can the of the including by from

Barry A. Hytinen

team flow performance. about big the think is words and and inherently. it going kind what business got in effort It I a 'XX. the this we've cash pleased the Sure. we're to And in Thanks, appreciate Jim, very forward with speaks

start So $XXX million moving net at you income with the midpoint. to exactly 'XX, yes, where of I will GAAP did

and was same stock add of is our for non-cash back million in that non-cash, year chain as about actions is up the for supply that which of called that’s $XX million this those and such we $XXX million, items, back. of -- that mentioned $XXX in you the about $XXX the so comp, you order million, If area it $XX would total probably D&A I charges add things the items Note that million.

Just flow income our those of very net two high-end for to puts close the full-year. guidance alone the with cash our you GAAP

through just think When team you has if to so a year as of we Champion inventory a working I’m noted got or actions conservative we year. think little the sell lot we've to in because say, kind we midpoint, should support as as capital. be and as on conservative bit reduce we the I I move will And around frankly inventory continuing frankly move be say to noted that And our you about before, through down. I the grew able

into feel and flow the forward very beyond. about cash good So XXXX frankly moving I and guidance

Operator

question Our next comes with Jay from UBS. Sole

now line Your is open.

Eddie Ryan

Eddie Hi. This is for on Jay. Ryan

guide basis margin much versus product you can versus unpack XX is that us mix help point the expansion of for cost? And So, that gross how full-year? pricing

Gerald W. Evans Jr.

piece you that year think pricing from we mid of of I in business. on we’ve last the pricing costs about you Innerwear quarter, our in that quarter would conservative So taken When inflation, we it, about, nice input had a noted first for $XX we price the tell that here opportunity million there's elasticity. will view call a

that so global And drags, about, some our prudent it's together guidance a benefit. the of I of with where Champion to the that out it, of get that both first remixing, segment. guiding call as would basis And products mix say we pricing margin on you'll of in a transition lower so in coming of There's for $XX or call and million when of nice more primary those out year, lap one is quarter driving items, Innerwear, the it we're of In mentioned relates XXXX. out -- a Innerwear about kind of and I think Activewear. our that’s the you and then U.S the nature are higher-margin couple very

margin, drag organic, benefit on quarter the as second. based will So if until the it we pricing the will don’t impact decline, will, since have that you that non-price first has

So those key some be callouts. would

Operator

Siegel Simeon comes with from Nomura/Instinet. Our question next

is line now open. Your

Daniel Stroller

expectation and is Thanks. units for Simeon. price is for out Stroller Dan Champion share, the on between Champion year, growth expanded on be growth taking And it this parse source, distribution would then North to for and regard With that is there and America to This question. you’re comps? our Yes. to Thanks any metrics willing the and any way there productivity great.

Gerald W. Evans Jr.

beyond you the price. say, benefit distribution as as would just it's within have, we customers seeing good U.S., I the when business our look Yes. Champion we're both globally well space more already at from expansion,

mentioned. blend of really everything it's you So a

to continue build some Additionally, more as out world. we will those retail the around have outlets we store

So good a it's balance.

Operator

from next with question comes Our Kernan Cowen. John

Your line now open. is

John Kernan

Congrats guys. the morning, progress. Good on

Gerald W. Evans Jr.

Thanks, John.

Barry A. Hytinen

Thank you.

John Kernan

in the to category, talk you general. Can Innerwear

had did You fourth the of in some trend the business made clearly show progress improvement. quarter. The

you You initiatives in revitalization in terms and Innerwear, that that, category have the of particularly in the had viewing mass to just inventory Can the health you're talk of going forward? how category. some that overall channel

Gerald W. Evans Jr.

were Yes. XXXX place. came a We lot flat with business basics. right initiatives basic there. traction to signs seeing guidance for and intimates, And pleased In in that very in you're Innerwear QX seeing It right, John, got positive last our our expanding U.S our in was we our price behind business. up on space of year. revenues is are in increases X%, our in we're we're

we’ve we feel long-term. to got return growth So path to on our business

be we caution year, in back the market the the it's was our we ongoing Shopko as assumptions noted entered that we the viewing coming conservative And some with in We year And of of some in the felt as the last for bankruptcy our caution the as there retail, you the quarter with to and do where the us market, it been From acknowledge the market we caution. and could we and inventory POS. in door on certainly general thoughts finished -- the that catch -- year year expected -- early be the and approach top the that comments Sears standpoint late of that We’re we line performing or our closures it these inventories recall, standpoint. with to like prove tightening we line expect. could be year, other as of XXXX bankruptcy we at or accordingly. we more really with generally may adjusted and best to caused little into in up our we step work a felt bit of lag but and were some given that through we commented entered the in reordering we view upheaval saw year. to inventory in market we little numbers that an a and from the behind early year there's We

Operator

from question next Deutsche with Our comes Kanaga Tiffany Bank.

open. now is Your line

Tiffany Kanaga

quantify of and Would us our call in sources if for a expansion Thanks. your margin Europe better International segment more much detail and performance Hi. Pacific further offsets the the in Thanks questions. past give for down picture XXXX by for as we can the to geography and of growth, break taking us headwinds expect Additionally, acquisitions? brands we in Europe Champion Innerwear? especially move you that how you

Gerald W. Evans Jr.

Asia, we're operating what across in basis and across We building. to businesses let strong did the synergies XXX we points tremendously of of businesses, of saw that the last in take really the part take what been perform of there, of -- business, will our the through. its the me you're the Barry and I diversity strength Yes, question. that of the standpoint and in saw our well margin first in speaks Innerwear also part From -- it growth Australia the the improvement building growth we've strong And Champion quarter, seeing let saw quarter the with but come we the business International it Americas. question. so

our in pressures. we We're were were total We comments, some back of in noted French the Innerwear Europe we through some experienced there was in slowing those as in total and saw European really business, economies year. the did our and that and year. is German the in macro the half low well-established we back feel apparel that our in in and markets our -- the businesses the in economies of those markets, the slower, quarters went softness in French As category

we came and as those held leading in through shares have Our we markets. shares

important businesses to those in that’s our markets. tells us for it are and So us know solid

looked guiding our toward a And to again again are our be strong businesses, it's first-quarter. going for we International single-digit driven growth constant currency high XXXX, organic we by Champion certainly improved but as also including Should that a market macro as into So from across well. Asia, standpoint a Americas Innerwear growth and the to Australia we Europe. see turn some planned begin we'd have cautiously there and performance and growth,

Barry A. Hytinen

International X% a you profit, more around segment, reported sales sales growth and Hi, little its on thoughts to first This in we give our the have Tiffany. for help quarter I year. Barry. In bit maybe the some operating and about think about. is expected X% will

the offset Things in but both to million million second very I Things got sales. about organic, $XXX first similar reported mentioned, but the a we contribution probably we've in is still benefited the be increase being standpoint, by more say Bras million, in $XX also by planned by as million. is we the Bras on From call with FX. profit a quarter that from FX growth N FX profit And terms to Now is million inorganic the that than quarter. International of up $X quarters think one inorganic $X growth them remaining that's if offset N we’ve as in already start we headwind just $XX growth expect unfavorable call-out the sales, held, headwind with operating

in support I Now to those will range -- to that expansion would and a estimate year-on-year that we the be the to -- supporting note all experiencing. global note investment in support we're I total basis increase our our support would that slight and in on probably investing distribution our million for majority a company the that is $XX growth with growth of vast network the brands to brands

Operator

comes Marotta question Steve CL with next Associates. from & King Our

now is line Your open.

Steven Marotta

be to well. about standpoint, quantify in the as helpful that Considering in current Barry, investments well as basis would you remarks operating marketing a basis guidance is T.C. point the fiscal the year There inherent I talk point from you I XX as there. lumpiness those increasing and you believe be year. will morning, Good deleverage extremely the best bit the increase margin. little Also you can. an if margin that quarter-to-quarter Gerald, for the prepared SG&A -- for and improvement mentioned gross Can includes there's think

Gerald W. Evans Jr.

would that I Okay. we’re -- just that growth, is have with Sure. and reasons off, the support there. where I of to the finished and the first I the why the that’s kind investments that's guess investment is big generally I that quarter across pro big one mean, rata million rev globally. plan I making quarters, we’re the one of of start would -- we $XX showing profit that make

a for consistent bankruptcy charge partially first the we had compensation out, levels would the to and But some support offset of And we the So we of second-quarter FAQ than that’s expansion naturally target are seeing of, from 'XX first to variable year say quarter and those are to back investments and $X going other that one-time part, extent, back by in headwind call have both and say, I the profit where which I to most a growth. nature. figure Steve, things the margin adding we feel very in through quarter. about is good the spoke in quarter we fourth million

Operator

the from comes line with Bank question next Heather America. of Balsky of Our

Your line now open. is

Heather Balsky

and I for follow-up. you question my taking then had Thank a Hi. guess, a I question.

The first about and more that marketing putting my talk level business? to hoping you get behind to will was marketing putting your talked follow-up. you is, could and you in basics. Innerwear spend to are I about then of sort of of willingness your And I kind reinvigorate what

Gerald W. Evans Jr.

do to out behind we But doing, Barry in and underwear going put will the standpoint some to what Let let other support we’re always those I me them. with are how innovations going comment a little with of do particular, we we’re business. we bit -- from what it. got Fit as basics and important We’ve our of of on one being, will just there our support start pieces ComfortFlex a certainly

And Bali also take -- the maidenform.com Intimates seeing our opened we’ve end and do the success digitally it some consumer take to business and to and the with the begin the consumer that, business. we It's year. brand millennial up connect our lot of to our will we younger appeal and intend side, Maidenform playbook and of already has to apply invest [ph] with connection the consumer. from a that we at intend some with reinforce Champion nice to On We're really the intend to Maidenform supporting behind we the been coming but our we young -- investment. and among

Operator

[Operator question line Chethan Instructions] with Barclays. Mallela the Our from of comes next

line Your open. now is

Chethan Mallela

Hi. Good morning.

me. So questions quick two for

us Champion, just can you the XX% CX second, the help beginning think we product? relative it's the lifestyle believe as February. currency that constant excluding growth for business about then First, about between in pricing, in going quarter, growth at in effect think the Innerwear the of performance the the I rate And on rate the

too reads, you’ve elasticity cautious referenced more not. seen see just to real than you you’re whether about start marketplace, early I what So talk move your seeing you think peers can competitive in probably before. to it's but the or assumptions And

why? Thank how Just so and a more little detail that’s much. on changing you

Gerald W. Evans Jr.

across of had certainly broader and standpoint the seeing growth the a From within the performance heritage. certainly that They’re developing Sure. business. we're range business performance Champion, entire business

real to that increases, circling now, So would the development of we going as -- business. after breadth beyond and to six far that across we think of many see This brand the From years I a they we’ve room growth we’ve is got our grow place a continue speak. standpoint of that price that’s in lot and got well line are say fad. strong and growth two a

the input all companies so consumer that also are that market. market implementing We've into with increases going and costs taking competitive seen price are say know many others what and And we're many are will they’re dealing or to we hard -- It's price the do. goods increases. so

We that I’m some have be that's anything costs that? deal have Printwear, price input with seen are increases on other some increases, to in our of they like to take and yet we will too go as businesses, of Barry, our those competitors but forward, and incurring seen. they sure

Barry A. Hytinen

that part we mid-quarter We'll I final standpoint, question. going We planned of out. plays it cautiously. your price see the and elasticity how the plan was think From increases

Operator

We Heather line with Bank the from have a of of question follow-up America. Balsky

Your line is now open.

Heather Balsky

follow-up. Hi. supposed I was have to a

So here I’m.

just us you’re your regards update to savings the, how remaining and other on much and guess, Booster. actually from I is where your …? synergies question you your for with The Can Project you’ve

Gerald W. Evans Jr.

has been for Yes, Booster a program us. Project great

additional input through we’ve the door an some investment multiyear of period in generating a looked visible We’re two today. are expanding since we areas. and that we’ve time environment as and savings program. But we main we inflation brand lot are savings had the that some we've it, elements, closers. The a element. and that changed of standpoint. had at questions that discussing two really started from in a broader a higher when lot program, cost costs as And over gone and has there's up margin showing a those certainly Booster benefits savings increase numerous gross And is had element experienced support

Booster we to from referenced, as -- that about and and everything Western comments chain through, Hemisphere tighten our moving supply spoke -- project and eliminate our our and next as stage is the on this look but we're in improve further cost to where well. Barry overhead at the always flowing costs we DNA the project So is in savings that’s some

will As about be we balance $XX would project, that noted, in XXXX. that and generate million XXXX, $XX million total, that will be be year savings million in would of in the about of two a $XX

Operator

Morgan. Our next question comes Carla Casella with JP from

open. now is line Your

Carla Casella

and into of Penney? department further are today? stores stores if from guidance how and what percentage sales you Hi. built the can your talk wondering you closures I’m your then to department C. And much J. Sears

Barry A. Hytinen

Hey, Carla. It's Barry.

would relates I it Sears. approach taking, to say, prudent as We are

of included We off his XXXX. being the it pricing, nice prudent we describing, because it as prepared mentioned some you're Sears and quarter kind million trend. if quarter small of is basic we describe in in of store. back kind our relates space all of the look trends in would And our kind it guidance additional in of in beyond third remarks, the just remainder we have trajectory decline to what at our kind think the of that's kind windows, midtier saw relates of that about Innerwear are really area But of factor seeing about the business any Gerald in while planned fourth that, the to sales. the bankruptcy we business, U.S for don't you as it not I the kind network in half as just specific the and movement and Innerwear have conservative of And $XX department one view is point, earlier out forecasting

are. where about good feel we we So

think continue to the planned through I you year. we're update in that and will we area

Operator

turn to closing T.C. that I for today’s And remarks. back Robillard concludes call to would session. the question-and-answer like

T.C. Robillard

to speaking We like today. day. you forward everyone attending We with for soon. Have our great to thank look call a

Operator

program, in a you Ladies This today's day. participation gentlemen, you disconnect. thank the may your conference. have great now concludes and Everyone for and

Hanesbrands (HBI) 7 Feb 192018 Q4 Earnings call transcript