HBI - Earnings call transcript Q2 2021

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Operator

Good day and thank you for standing by. Welcome to the HanesBrands Second Quarter 2021 Earnings Conference Call. At this time, all participant lines are in listen-only mode. After the presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference maybe recorded. like the now T.C. over I'd Instructions] to conference hand to [Operator Chief Relations Robillard, Officer. Investor

T.C. Robillard

provide the and everyone, Conference pleased today XXXX. progress Webcast. day, to quarter second Call We're on of to after release, our call here the be everyone review and the document website. to chance we can Good a FAQ to welcome and found news release Investor of has the issued of updated this Investors earlier had the Hopefully, today. hanes.com update be our an in The HanesBrands Quarterly section news replay

company to which and restructuring operations. the update all results suppliers, in not materially. or call are of impact to subject at operations may as which the governmental in on action-related risks force. and partners the guidance to associated include the those financial does our undertake business certain to that include as only taken the uncertainties of regulatory to and Unless well COVID-XX to or forward-looking the also based risks website actual our forward-looking other to pandemic in charges news our These detailed session. customers, labor authorities time differ The statements, related today's and expectations by statements may are risks our our business and and On and either to our today, cause consumer, as releases. we speak question-and-answer any and on may with references combat otherwise or business the consolidated measures continuing our filings found various are These SEC, or be prepared results those the the our in and revise These as on which statements made. remarks current make well pandemic they speak noted, operations exclude beliefs

apparel are pandemic, COVID-XX innerwear to of otherwise discontinued to today can the to results and operations our to other Financial program due reflect the Chief and well XXXX today's been we additional be volatility Officer. that well CX XXXX Executive as Officer; comparisons to to in intimate including With of European exited DKNY of comparisons and performance results are license. the a results, Given our of the Bratspies, XXXX. found Comparisons measures mass our me as Chief Steve comparisons the have Please all XXXX reconciliation GAAP, to our non-GAAP business press the have that short-term Dastugue, information, unless these impact call on at move release. note Michael focused as the stated, rebased as

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

Steve Bratspies

Good and morning, Thank everyone, welcome. you, T.C.

Let by safety under of consumers the how enough HanesBrands grateful around on me commitment our and am focus thanking I extremely team express and I circumstances. dedication, begin their entire their serving challenging can't customers the to proud and world.

been a with first manufacturing, advantages, it's than a driving of sure associates their believe our they're global setting our is the scale, XX,XXX exciting it's owned team, make out for countries. levels relatively the out, the incredible our leadership passionate is some chance brands, to a Full had of and accomplished and work. spent team my amazing It's new business associates. innovative We've around at Center, me pace year shopping. which in HanesBrands. a competitive that lot Design a period back, commitment refreshed products to associates strong commitment by activewear. our our an since sustainability, to Reflecting iconic away day associates came number short visited of and more plan in I see the a see innerwear associates around for XX and over this simplify wide energy distribution with that of hard truly business Our our of and balance company new To the recognized fully and with inspired finally It plan high our We time get range and is need I excitement both clear with to deep end, the Potential traffic a consumers decision-making able of stores of stores. I've We sheet amazing optimize across taken to the York competitive and month, We're assessment knowledge impressed I I'm to the the are was a developed mentioned, underscore New to interact their in of but you, by early not of our unlock pipeline strength, portfolio, a retail our tell to our Potential us all greatest talent. some serving our lot deep ahead just in in engaged. and Full growth. only There let advantages and we consumers. the business of and which opportunities a to to growth, We their been want highlighted streamline parts journey. that we tour are change. are we've hard still also underwent May, organize make. future of action you and And shared changes past and time. I also see

more and remarks my I we've Potential generate I'm and as growth. However, of profit on focus ahead encouraged the higher, our about to revenue Full made Today, progress the execute levels opportunities topics. two key I'll am excited consistent by plan we

the brief Full of strong performance our outlook year; second, remainder and our second quarter our increased for First, on a Potential plan. the and update

high quarter, the the quarter, end second flow we exceeded operating higher guidance at challenged of Revenue, margin of per increasingly performance our our share we We and operating in further despite delivered sheet. Looking strong inflation. and global strengthened operating environment strong earnings cash balance results range. the levels the all profit, and delivered

anchoring you, comparisons to volatility our short-term XXXX. comparability, from the are many With pandemic the like impacting we of

sales and higher For quarter across compared respectively, across U.S. of gains operating with this market In second profit build XXXX. our XXXX. businesses category period, than to points the sales share second were XX% time Revenue each and intimates. Over XXX XX% quarter innerwear increased globally. product innerwear, XX%, to both and momentum gained we of basis the continued quarter, basics and activewear in

well the International, growth In U.S. sales XX%, activewear, underlying headwinds driven stimulus XX% sales our most from by with government increased retailer Credit critical brand brands, demand. momentum our second performance profit higher-than-expected to business the our our growth transitory we the double-digit share success inventory Champion such outlook, well in our and pent-up continuing of pleased second consumer in Payments full and Child in benefits world. despite continued higher And encouraging investment expectations half experienced to stronger-than-expected of brands operating in raised U.S. sales growth higher our We Investing in In levels. is as the Tax in our around were items year for restocking, With above-average global see of as growth reflect addition What's per category XXXX spite and committed while XXXX we inflation, the and profit me Champion to certain from as to due in operating positioned with against earnings generate to to innerwear strategy. to health high the remain about it. dollars we're Champion. respect long-term outlook, to COVID strong to XX% were to our brand and single-digit in up than growth business, in half execute and sales,

And plan. we May, kids were going spoke expand we topic, growth made several at plan core respect our category. line. products the in unfolding. grow only We've and categories. more core Full we're than about brand our distribution do a globe. the added in our initiative, to brand, across offering Full the going the in consumers' a plan brand their in in fleece and our every first three through the to pairs me In brand, the that grow lot the to number things business, affinity we're momentum couple business initial in underscores we've in to Now half, we our We progress about feel sweats into in quarter, Champion product to in stages, adjacent of expand of May, believe U.S., new the and billion. introducing With for women's and told initiative our be We confident women's footwear, seeing product you the good They We remain and in provide the of were lifestyle categories. our Champion $X is and how to grow Without around our to sold new we're to momentum performance and Potential there's Champion turning in points let the second XXXX. to the we our this products updates. Potential a of encouraged as compared early footwear number the interest doubled

share by gains encouraged and basics momentum our in and initiative, market intimates. innerwear at U.S. we've underlying the seen Looking we're both

attracting the Boxer our initial perform we And build Pouch with consumer that Our past. differently behind a sales Support the than brief May, franchise. effort to in to our Pouch to our dedicated continues total innovation, outpaced consumers targets latest as Support in Total support projections. have younger a half marketing increased We've is significantly highlighted second momentum. marketing pouch, investment well, we Hanes we Total on

investment our initiative, and top We've continue our to funnel we and experience, deployed of as direct-to-consumer teams In consistently marketing returns. increased improved our better of the conversion bottom the better. with journey digital know consumers terms speed site agile and are the at driving

result, As in to a improving trends digital metrics. encouraged we're certain see

all an more consumer and average year consumers conversion The and last value of consumers of XXXX, to important value of repeat compared to indicator continues number across spend engagement. up. brands. Repeat As both not and are they're increase only our order

growth in journey, early While in it's opportunity very our the remain ahead. we confident significant

cost progress making savings initiatives. our we're on Lastly,

our number cost in As don't plan. of expect dollar May, in our dollar and fully Full course a of for match the period, Potential offset and mentioned every the investments in SG&A we over investments identified savings confident while opportunities we of goods. we We've we're can that to

and our or the big about fewer, to platform. vendor year-over-year also global things consolidation For number ideas a way. that we greater manufacturing update can we'll material We're SKU more benefits efficiencies global raw working and and We multi-year opportunities initiative, as savings, generate we such we feel initiatives along continue is profitable of one finding, distribution are reduction of the through as work large good the example, SKUs. on as you produce

call over outlook. some review of the turn our Then Michael? return and to I'll results to Michael second Now, half comments. for like I'd a our with closing

Michael Dastugue

here excited be Thanks, first up three Steve. I'm months at finishing to HanesBrands. my

my this there to expectations. initial strong growth It's Potential evaluated to me I first that to by We our results plan driven metrics, the the line today, end really attracted XXXX. exceeded Full to such exceeding expectations quarter opportunities, both all people, results were and three all things to of are the As in high earnings able across comparing the my the opportunity, capture of future remarks speak great our be innerwear be brands, to on businesses. HanesBrands, In momentum key continued and call. my activewear top global second our I'll of

to results to our morning. our XXXX, I'll of comparison earnings you release this issued point a earlier For

cost with each or XX% $X.XX flow points expansion to to times. compared Sales leverage $XXX while increased of Adjusted XXXX, the quarter sales, points foreign For approximately to of product Operating of margin $XXX X.X to driven growth. offset approximately the adjusted was foreign to rates. increased exchange operating exchange Adjusted from the investments margin fixed points brand the marketing growth These gross Adjusted basis XX.X% profit expedite to GAAP to million to share from we Adjusted higher by XX% in the to leverage from contributed The in sourcing or XX profit from million the continuing rates higher The XX profit operations the increased $XX approximately compared stronger-than-expected lower impact operating million, results. With $XXX billion. improved quarter's the million the XX% that the second $X.XX, increased mix and premiums X% gross $XXX increased items XX%. sales quarter. than basis quarter's of while continuing XXXX. from double-digit basis as $XX from XX% earnings experienced impact million. benefit the increased and million was from to per or increased segments. EPS XXX cash cost more operations to the increased to demand than from summary, operations higher XXXX, turn essentially let's XX%, quarter the XX% Higher and sales. leverage increased our in details offset $X.XX. margin meet

And of share historical certain that such our you double-digit and and growth me million the pent-up take consumer brands, basics which benefit two gains growth U.S. segment basics product category XX% performance sales underlying strong resulted comparable or let through the Now by increased The performance. $XXX and of first, levels. restocking with demand second, transitory growth intimates. factors; in portfolios. over market above our was rates XXXX as both across drove innerwear items intimates driven in our stimulus,

XXXX. margin leverage was than XX.X% which operating cost brand improvement innerwear The sales of expedite above in margin by mix, marketing. quarter, the offset and more and XXX increased was investments points driven basis For higher volume

Turning or XX% million Revenue by driven distributor activewear. and across online, to U.S. channels. wholesale $XX increased the growth

college licensing significantly increased and year. sports from business last Our

it the was in levels. spring attendance However, levels as pre-pandemic on-campus below XXXX below remains still

basis, Champion was distribution XX.X% XX% to higher XX% increased our X% meet activewear more costs as a as as by compared compared Activewear's sales sales from XXXX. increased offset our Revenue brand investments or operating currency We well XXXX. International compared XXX to leverage increased brand. points to than to segment. growth behind to the $XX brand Champion On basis segment, marketing. Bonds the Australia higher-than-expected as constant and within margin higher experienced of million. XXXX Looking demand expedite at the increased in in Switching declined

Europe in growth Asia Japan. by saw the headwinds in in Americas, ongoing also driven while Pacific We COVID and sales declined

in margin by XX% briefly quarter marketing basis XX% of For Champion operating driven on from and Champion below Champion U.S. all basis was and over in XXXX our on sales. Touching segments a well increased X% sales a XX%. XXX XX% points Pacific in a in constant Champion compared reported sales sales the currency in reported lower Champion our International Global investments segment's quarter. increased XXXX. currency other activewear, which the the as Asia and the brand quarter, the International levels, in brand increased constant on basis. second as XX.X% deleveraging increased sales basis on innerwear as include to XXXX segment

operating Turning quarter in flow. generated to and $XXX cash focused million operating of capital We cash flow the driven management. results by working strong

inventory improving, to was for you sheet, delivering debt-to-adjusted net to document end balance coming details. at now X.X our down, and times turning and additional ago. It leverage X.X to the of quarter improved quarter, in press our to And EBITDA turns a a of on I'll guidance. the like all at times our challenging a SKU reduction good year compared our initiative. And operating Looking release work guidance really to we're their is thank FAQ associates and basis are with such I'd results, especially the in a on for as strong environment. our track point

However, few factored we and second million to $X.XX, I'd respectively, current be guidance $XXX a takes for our to our XXXX. outlook. sales, guidance. we frame $XX half operating following prior our the million, like and high to prior At EPS environment and of the by into remarks, thoughts our to outlook. level, comparisons our And profit share have puts compared Similar guidance will a increased to my

our We're it's rolled brands, about behind we we're getting. to we're our May. increase for committed believe we to do we're business to consumer thing staying brands. that our and the right continue going our investment First, the to and Long-term, in that out reaction excited the strategy

incremental COVID And and pressure is from turn, stronger-than-expected we third, prior Second, creating in weigh Tax U.S. to being innerwear in recently the activewear which additional the to supply see the lockdowns, as continue It's rising around relative levels world. cases demand cost and This, environment. is of outlook. driving from our our Australia. macro recent benefits in chains by Credit headwinds higher in the further businesses, It's fueled Payments on the disruptions also both inflation Japan well most as to Child creating

very to that supply the owning visibility, be have which to One of advantages we our good is allows chain us proactive.

estimated partially Our our identifying supply great cost a increase The in operating second offset XX inflation to challenges previous pressures. chain as team doing managing points half margin is efficiencies and increased job to is pressure these relative as savings approximately and basis of additional in inflation pressure outlook. the well the

key guidance our full raised we second outlook. half our at a Looking perspective, revenue year From metrics. and

our $XXX the to range full For revenue billion million, guidance year, bringing we billion. $X.XX increased to $X.XX by the

outlook revenue third issued revenue also $X.XX for for growth of quarter as billion. quarter fourth for XXXX. third at our and to year. And year We $X.XX The to compared XX% guidance half increased guidance second billion higher earnings is implies the the revenue our and full midpoint, the for guidance XX% share the profit full operating quarter, per of XX% driving the now and

for We Our $XXX operating guidance full million GAAP in to of $XX $XXX be million. now adjusted to expect year adjusted the year increased range and profit operating profit full million. both

operating adjusted For million. the guidance million to $XXX third quarter, of profit we issued $XXX

to adjusted Our generate from our per respect now wrap turn flow increased full the year back And I'll the for up. for that, range earnings operations bringing year. full Steve $X.XX, cash With with share $X.XX $X.XX. million to to to from over we approximately $XXX our guidance operations, continuing for to to guidance expect call

Steve Bratspies

have team. to incredibly Thank once again, you, pleased welcome you Michael. the to I'm on HanesBrands. And

business. lot have things the a going on certainly good we in of So

highlights half. to committed in given are results, in quarter the the back, continue second our despite challenges underlying increase I increased environment. We second in reflected growth We're delivered plan HanesBrands. to our half see step global and the We momentum in upbeat remain brands success in we the which of business, is high long-term I the the critical our in investments to end second of brands the our to key our is strategy investing which exceeded coming As the expectations. for outlook in the our strong

to call it revenue executing that, Full turn and consistent plan higher, T.C. to back place, profit the we're Potential Our I'll in growth. is more against rapidly With generate and

T.C. Robillard

concludes remarks. I'll prepared begin to time over continue allows. to Steve. taking our the questions That now We'll Thanks, operator the your we'll session. and back Operator? as question-and-answer the call turn begin

Operator

Our first question from Instructions] with Evercore. comes Omar Saad [Operator

Omar Saad

view for does on could this it upside about confidence you morning. bit really Good I change the quarter. results kind affect transitory the that very the Maybe does The you the your the the of also – my Very you Thanks. on this Thanks mean, generating key my I pillars calculus I'd to are you're versus more give maybe the and talk strong. confident. question use long-term Day? permanent? a raise behind taking sales you sales now, that as sales line, guidance And ask nice question. what provided one guess sales. you Investor algorithm more detail revenue on little

Steve Bratspies

question. Omar. Appreciate the Thanks,

So me there. couple – of let a pieces

brands, QX Consumers It marketing in. In was momentum that there responding in. really really continue of across to to we're sales, innovation putting we're we the that momentum, channels, across the see I numbers remain working. build to shows that terms pleased come investing and the are is out confident we'll strong

board, we Australia the it's out good quarter is our markets it's And really really really strong internationally, and responding about encouraging. domestically we feel the are. Group, where which So across of

is business momentum But is really normalcy a business back said, number get Revenue it. of I encouraged In what up innerwear we and by in is about of the a I forward, to going would feel ongoing XX% by once we're degree a certainly. think don't being it, XX% say terms our obviously business. strong innerwear good that

growth, about the long-term we're returning plan, going to about that and to we're double X% If at X%. you think our category estimating

that to a continue very as return of in basis to well. took that at XXX normalcy point. was that we unit and – some But will both feel we The that, degree share we underneath points So we will good strong take within dollars share.

to out sweats, the momentum the So The and across kids to board. that. area our and in categories three into that growth the core Champion, for adjacent is women's continue upon really expand is good laid both expanding working, planks and we've we

feel right outpace we're some going sales, in the point, I these at we So and our confident comp time that in to have at go degree continue That but the will think numbers some to we said, unique run to won't be We're there category a of normalcy. very because we we run I forward. as can percentages now.

are certainly across issues that quite brands, across geographies our the business us, of transitory is but So there tailwinds now right underlying are the some strong. and for momentum channels across

Operator

B. question from Anderson with Susan comes next Our Riley.

Susan Anderson

half, talk Good if you you in about the product and chain costs higher is Hi. job also could shipping is I Or supply morning. I'm this Asia? this second maybe the quarter. Central coming the had nice America? curious, Really from from the was quarter. the on first little think wondering lower the the it half, And a maybe from cost just how could we higher? margin bit the be looks first should the freight gross half versus increased puts the the freight then versus takes in on like also, about being and

Michael Dastugue

chain a think about first think half provides the Michael. is has year, you cost of the nice this advantage. try within think given these competitive once team chain if to to a all Yes, supply of done manage external Susan, again, And I our owning I job think, I factors. supply Hi the

costs these do come immediately the through through of P&L. Some

of costs, et cetera. the expedite some So

months, make appreciate, see product, the the costs, as cost sell the we probably inflationary of we and as next Some start product, we're six buy you'll the pressure. say, as can increase the products, seeing you to we over

job points is is the pressure. point some the profit number, and have to, I we half, you're doing was think that in a I called what that net in the half probably pressure XX that out is chain margins kind think I And back which our team out really of supply that's but Because basis some you right? of much that more do terms global back pointing So would rationalization these of that SKU are a costs and if efficient it's to commodity world. And challenge, a – particular challenges. transportation there costs about of that's not and nice pressures. of part helping think, even in with I transportation to think them and restricted any the It's get wage these inflationary pressures

Operator

question next Credit Our Binetti Suisse. from comes Michael with

Michael Binetti

guys. Hi Good morning.

couple for ones a just you. So quick of

added You've us are cash. to it. in, $XXX what SG&A through about with in little in the dollars a just now year us you sound guidance then flows, happy business walk Can going baked second see lot of where on you the to understand half, talked we detail in you're you you we more this Steve, a the so here, with million investing the that you operating what and raised cash the And it. to

help think with us that. And be it's models? thinking as little you your our Can bit start think free $XXX the don't about much plan to and you deploying got target CapEx, in where after here you I the the terms debt where you'd the range. Day, points deploying think assumptions direction cash You've at of but Analyst to to there? I a the included moving about about the in And best cash dividends million right toward of talk

Michael Dastugue

is Michael, Michael. this Yes.

me start the Let question. with maybe last

understand and allocation your Just question. let's It's make just sure around really cash flow. I capital

financial first terrific. And now, to we and and really cash for million, its time that over that's financial at guidance May, from So right line where operations. took I $XXX time. it we we of kind same as you I suffice example, stand for And in year, that's provide say, did to on this said, off, a improve as joining its growing bottom think top improving to line is and the about strength company flexibility think its going flow up

I makes need so a us think comments all uncertainty Clearly, alternatives, going and restrict flexibility. think business, about we're But a lot amount of and think and do current that's that invest options different off, what to the to better. financial now, our right have to of the we're number feel and probably what in one, do world as there's of we first And doing. is in remarks we the we we fair out year.

In we're EBITDA the terms down the schedule, saw actually down to you debt was look that by see net as gross at we of X.X by growing EBITDA. improving if XX% done metric, times you debt and taking that well probably on on both debt metrics, to it but that And over improved debt you'll cash. and taking down,

do forward think think we alternatives we cash, as or to the so And and do what and proposition. about with going we it's an proposition, an not

think in business. our invest I – we about it's can So

levels more shareholders. debt money our can return think I to and we reduce

that's And we're to more forward. we continue now. going think going to we have kind think grow of like options I So are, we are that if where many we

Steve Bratspies

Steve. it's Michael, And

media I'm the that. terms of times, number of In a passionate we've at the investment, SG&A, mentioned very about underlying which

younger spring lion's in lean launched we're behind our see to brands, we're it's wonderful Hanes, of that company With reaching the share that And product has going frankly, to that this seeing there, Support up us and mega iconic been under invested and to to had is it's have Bonds. we we we Hanes, to said and I up. to time. continue in that spend a big We we're starting historically. we're trend brands, Champion. that joining hanes.com quite over work. consumers it's step think on working, do starting are need of starting consumer. And and our brands our business, just younger which with to well, needed lot Pouch in the we extremely performing And step that that younger Total behind we get the the will Champion, the be the the And on spending need

just a a to what for. consumer Ali, Muhammad Champion yesterday Your that this Champion – digital. we Be steeped around you is essence launch lean in is collaboration spent we'll The him and very fully and on funnel And to would far. who We'll with space. on playing I And digital we us. campaign integrated quintessential valuable is call what and the is Champion be I of average Even Champion it's improving campaign search up TV going the allowing and to have my the conversion and Support is others return-based is spending our paid time. in are we're on you did model. earlier have It's Own social behind into over really so Our stand that remarks, with how to the and are well customers that. thoughtful so taking different we are if out we define more not value at order with insight. is opportunities look be Repeat total spend Total they're mentioned In Pouch

We we're and think to So brands. we returns them. the need to they're important long-term incredibly build into winners, both seeing. these short-term we We think it's for us like that and lean

forward. continue So to we do go that we're to going as

Operator

Jim from comes question Duffy next with Our Stifel.

Jim Duffy

how strategies. pricing quarter. wanted Good Thanks. thinking you're Great ask morning. to I about

think amid inflation and our you arsenal? backdrop inflation do in a as unrelated about store, in categories, and elsewhere you. how the pricing the Given Thank tool

Steve Bratspies

it, And to to earlier, a headwinds offset has. we hard it team arsenal. go to it's headwind we're answered about Jim. a thought we but And credit working that We're forward. well clearly, offset it's I And able incredibly pricing, a have they've that. chunk Good the Yes, certainly been nice tool do of thoughtful as Michael going to certainly, we very those. else in that morning, be Sure. everyone how our inflationary

So initiatives, savings it's of have brands cost inflation in challenges, a have that. efficiencies. us when do and if to combination is strengths we we really The power think about us pricing. the manufacturing our do news allow to believe pricing Their market. And good for I

for think But need that to kind our in the partners, have the certainly approach. when we pricing know and to start. be we we'll using important it's we We'll pricing an and because price on is innerwear at normal capability gaps So with. business retail Always we nature, place that's look something and eye an competitive of in a particularly take strategic I have and selective that our and of that to. cycle compete on the with if keeping us, lever

Operator

next comes Ike Fargo. from Wells Boruchow with Our question

Ike Boruchow

congrats $XXX Hey, mean, in question I think end, raised on guess the Steve beat million. and Michael, the by quarter, great my by high just million the at you year the $XXX again I I guide. on quarter. revenue is

parse maybe innerwear I the raise for that Is Is million Australia. out confidence in $XXX you just that on comes back Is So the orders acceleration demand hand could where seeing? the from? side? Champion half. you're that guess, in that

just the there helpful visibility? one, more second just update would Hanes on great. Europe quick then for be maybe timing, any color Just be back half And would

Steve Bratspies

Sure.

happy So do we're revenue in up, and the we're terms of a and about guide, big that, step to excited it.

everything I it's said. you pretty think Ike, much

in hand. orders Some of it is

run and for we QX that preplanning the back-to-school us. and holiday. is you the QX and splits remember to for And replenishment model volume see that it have we that of also, Some

bit across that a spend that lift everything. acceleration to to And do it well. marketing as little It's to expect from channels. the also it's So of we're going ties

I gaining. but of that brand of basics So give encouraged some the new gaining very revenue And that our to businesses, that launching tell channels, One Champion, permanently of you good will brand, that back be performance across momentum the in well. to everything, some in that in would larger just of on Bali half. confidence Hanes, guide I us that see space I'm for adds with our thing our raise in and and products The customers cuts up, we're Maidenform marketplace. brands, all call we're some half this pieces new the is across all incremental the performing space intimates all we're add all products in talked of us it's and of the you we've our seeing the so back think mostly all our the of are there that the revenue all that up they're

that. we see and momentum, to we're So continue by encouraged the

with is we to schedule know will at you that pleased the HEI, No obviously, on moving progressing expected. terms as and we we're news, In this But share of along. but there's let we're that when point. news it's process

Operator

UBS. from Sole with Jay question next comes Our

Jay Sole

Great. elaborate sales the Champion on I wondering, if little Steve, quarter. just the you could in a was bit growth

tell channels? up the I continue does it's that whether of was demographics or to U.S. sort think in said brand? you you ex-currency seeing Champion up X%. customer the about what of terms Where categories growth sort that XX%. And And opportunities to long-term was international, or are the of extend you

Steve Bratspies

numbers pleased business. for pieces across the with different board, all Yes, Thanks Champion. Across at currency, very XX% and the the XX% XX% seeing the for domestically. of Sure. growth We're quarter; constant question. the for

up and through. pleased that grow, results early some our Our business new in so I very core innovation is to and the was space. continues business to Women's really in coming footwear sweats see

half, some think think I working. core fleece new innovation should So it as in back have we about you in And our the coming innovation business.

an is going that's the for weather. which category, is used to product launch, in us, Series usage. Defender sweats is example Our of a It's but extreme expanding

new As said coming that I then are some some we're on have out we focusing on that products products unmet And and benefits women needs. in focused are with different sweats. earlier,

those about seem coming how how category. do be well. how to and the new usage, innovation benefits do are things meet So we think bring working we we expand new is to All needs, we do

in we roll gone going but going with progress is and well there well. that footwear have and Tmall with in out China early, QX launching open partners And very stores and pleased has continue and to the has QX. we been Our to stores the

working. different So a things of lot

the lot we're brand Champion work that's now, Be campaign have And legs going Own do, keeping about mentioned I'm right excited of mentality and to launching – that the think, the I obviously. it. just We challenger opportunities. And has after to earlier, always as a I Your

our good getting a opportunities business the started lot in just Australia really things of so coming. Champion So there.

So we're said confident pretty $X we excited brand. about Champion go and we I that that remain the outlook can We as going forward. do very forward. billion

Operator

Our with next question Paul Citigroup. from comes Lejuez

Paul Lejuez

Thanks, Hi. guys.

share And segment? that mentioned two of in if marketing from customer half? How could that share does numbers compare marketing I more younger does also, powers, you around innerwear the ago? the half lines, were second along how to of innerwear to any years the signs younger I they you younger Thanks. those segment, think guess, what the look versus first you that like Curious that capturing business. growth from kind is seeing

Steve Bratspies

Sure.

order. it let take So me reverse in

we marketing about year to $XX we what said of of terms were going the that the for for spend track, going on as an In incremental dollars, we're in half. and spend, will increase year. to it think maybe We're million probably a the second minimum

the well. also back us ability It's is doing about momentum that that revenue. to really So because marketing around the on picking up gets questions on our to earlier and deliver

In terms share of very basis the which we're was mentioned innerwear about. of share, of points over we unit business, that points in XXX share. XXXX XXX encouraged basis

encouraging lot see. So a really of to there's volume that, which is underneath

see at marketing through we than are of majority younger age that. of consumers, past, voice product look reaching launched And and that consumer example to XX. under we're of and and new of different starting great have that TSP When that, and hanes.com, majority them product working. newer, you on a a the site, campaign we that purchasing terms the of that's are certainly in consumers targeting In we're majority a the Hanes is the on the are it's our that the to

we good really targeted our And that marketing in general, younger initial forward. go be metrics at consumer. for So Hanes as will

being it's working. we're So as targeted we and spend, very

as as to So way, with results, that’s older does And perform but the our other true consumers. again, well. brands encouraged see can for intimates Hanes the consumers just well starting it early very brand we're as the by that with younger

mentioned, results. we're their on early well. out the go. and our all we as we Maidenform, we’ve journey we're to As this go we as go we're success, gate, learning But of doing like and Bali, We're adjusting

Operator

comes Morningstar. question next from Our Swartz David with

David Swartz

the how I plans tell are footwear category. for little guess, in about the the Champion plans from more for differ us distribution bit you and can they a and past your Champion what footwear

Steve Bratspies

Sure.

– product the let's that and be all space. One about of that where lifestyle, footwear focused Design a that is that two that well clear, – just the opportunity global This in footwear brand plays for to basis. a really men's, extremely that in products talk are have Center in we the of to had we developed. trying a to do of I performance to casual already going range of it's to our to brand kind the going wear things York weeks developing getting a be be Champion kids New out lot, into. ago not and go breadth brand. and see developed different and are and about on space we're our We're exciting women's, a walk-through the being product And being

very we focused, have. products the of So consumer understanding by our driven that very

the serve with success, soft some I in some and China. to going QX that. and hear U.S. how about good domestically as and to to said, launching into launch had stores out We're a and our that'll we're very Tmall You'll QX China, expansion do and successful in soon news consumer ability our roll

And going So forward. have business a strong in that we start good Europe. a also it's

but a can it's winning and It will that casual think global broad, in be over business time. for fits us. So we space be brand men's, we where that focused very where kids, will product lifestyle women's develop the

Operator

Our next Casella with Carla from JPMorgan. question comes

Carla Casella

you versus if And given how stocked I of for well is in had Hi. – with on as inventory issues do inventory any expect as your your channel. And question shipping? the comfort getting a – the there you supply your – and risk level holiday? back-to-school are in inventory own any levels products the chain

Michael Dastugue

Hi is Michael. Carla, this

XX% right you our levels, now, ago when a think about second to inventory levels year the down quarter. end the at were about I think inventory of

had that are We in keep in there's in PPE mind, would year. a last – things there of number are there inventory Now have that number. embedded

U.S. the So into in I kind far as challenges we feel in. the half, we in the of goods as when getting think like factored back we supply factored current chain about think have

So and difficulties. ago, profit a is through sales factored years think all more we been team would that has pre-pandemic. than our been It right, our But it guidance. environment the was have and challenging into challenges of working two-plus

was factored that hope will things that have factored think in. keep to so next better. do And get And fingers six let's half. all months, back But we in start I crossed that the our into our

Steve Bratspies

shipped. Yes, I of for add, shipped being is or back-to-school, that most just would has

the flexibility, and guide supply factored at which are back-to-school feel supply, to is to our just We and in risk. our for about all risk is visibility said, back we've great attest environment a But chain when Michael deliver And no I advantages. time our reiterate the need. half to our frame. in a So we supply this the what current good time like owning our the I'll ability what on product that chain's and

Operator

next with Binetti comes question from Our Credit Michael Suisse.

Michael Binetti

the the a some Hi really about there, of the of space when question were guys. the I where Michael, games in saw back you I in before just negativity company's would this the management wanted guys jump in side. to answering to customer we lot lot of team, particularly growth think rates that, largest the alluded you growth a I a about innerwear came sales sustainability to pandemic. earlier like knowing you on from hear

So gains perspective during about hear see is important. where to, positioned on what the to all, and that you the I unique that changing want private think relationship you if talking have would guys that. do you're at very a I caused very be brand space label that

Steve Bratspies

Michael, So Steve. it's

gains. to it So number two comes One, it, has I brands me to them that let and the meeting and challenged, innovation in over And job They while frankly, testing like they our places. supply to confident demand, has them from chain, of have. our of in advantages innovation a has everybody of the leaning really rate are them. our proven terms like the I from many space at we've and with worked that investing a quite across a And supply nice that start fact we think of brands. customers them. customers seeing of and we're think – We're the ability and our across done of number that is last, behind perfect, far like call year in else a

and across innerwear intimates. lot of and is driving cuts space, that a both So it the

In big to customer want you that really specific relationship, get is I comment be serve customers the can forward. our don't served. what I I on to them those to into don't But take important relationships tell the are and customers. where much we're to incredibly terms too way of they details. we good to going need we make sure I work would going extremely that us, hard And about and feel

invest private right. we great from we is means private business, innovation, in do that. their we're if For I'm that brands drive risk day that it's brands on to And the a label our brands ability not label I've always got demand. that lead confident they're specifically, it said do going but they great to is have have do the I to here, and they risk jobs yes, And is, what traffic because retailers behind and

managing shelf of with the to through and do consumer to private price the And will think when customer. be get do and from share have lens if at do think showing at away – I we label and I that going us. the something we that not our and we're pricing, we're showing that's I is mentioned price, watch the resonating it take earlier, they pricing gains is let we obviously shelf the gaps

any going private whether customers between that But capabilities, against large the other we and compete that's chain ability to capabilities, other have, our supply through pipeline, through our good investments whether the against that brands, other incredibly the shelf have. brands about innovation national very at that our the making, innovation feel that's we're our think the I important. or – forward, that's I – label needs

Operator

remarks. to like That concludes back to closing for T.C. session. turn it Robillard today's question-and-answer I'd

T.C. Robillard

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

Operator

call. for participating. This you concludes today’s conference Thank

disconnect. now may You

Hanesbrands (HBI) 5 Aug 212021 Q2 Earnings call transcript