HBI - Earnings call 4 2023 | Hanesbrands Inc.

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Operator

Good day, and thank you for standing by. Welcome to the Hanesbrands' Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your host today, T.C. Robillard, Vice President of Investor Relations. ahead. go Please

T. Robillard

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

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

the those may in in associated financial are revise charges operations. are On guidance we to forward-looking our and that and action-related they noted, to or prepared or Unless question-and-answer as continuing made. to statements be certain and our frame results either on today, forward-looking dynamics, to also does statements with the subject the which statements, may our on SEC, uncertainties expectations Champion to anticipated restructuring and deleverage any may at consumer evaluation call otherwise consolidated undertake as well and make our filings These news and those include current our releases. time update references remarks various the conditions, The of based cause which transformation the are detailed full speak risks to to execute which speak beliefs successfully inflationary plan include actual environment. These alternatives exclude website related time in only ability our in not or our our and on the risks other global to today's all session. to initiatives, found the for company results macroeconomic demand business, including strategic our our strategic plan, potential current differ materially. These performance ability Champion risks our

Steve Bratspies, Additional the measures Executive news our today's GAAP, are including me call our Scott be release. Lewis, on With these performance and non-GAAP Chief Officer; to and reconciliation other found today a of Officer. information, can in Chief Financial

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

Stephen Bratspies

Good various year hurdles was progressed more Activewear market in the Australia. challenging Thank experienced for within and of that operating U.S. and everyone, this areas. not to and expectations quarter our than but And was did drove by in our marked view, T.C. morning, cautious results EPS a our the and the sales a challenges a particularly profit that sales, XXXX also call. even you, number welcome We environment meet year. and

as historical basis planned. million point as cash We capital returned inventory year. We unlocking million $XXX we of our and several actions by levels the We we to with While pre-inflation that and Innerwear are XXX XX%, beginning in indicators margin the of We results, these inflection seen expected. margin leverage foundation an actions And confidence to working flow improvement point. our that headwinds, more range. reached strengthen have than the we've our to we're over of $XXX prior reduce its top are our Despite the not demonstrate and simplify operating gross at see business satisfied progress gross million to our continue strategy benefits all on in XXXX. The we've us results. cut returned our give with costs positive reignite exited reduced year working. initial business, $XXX taken to to line our a inventory, margins

business, of was target $XX million we generated $XXX of operating plan. Innerwear gained largest debt than paid we cost cash our decades. fixed delivering product year, spread our $XXX costs million to launch successfully leveraging innovation better data drive of reduction eliminated market our analytics goods the and And debt, $X.X more of flow, We SG&A. share in our across availability ahead year. We of billion exceeding U.S. million on-shelf the down for than across which For more and

challenging which moment. That environment expect said, sales Scott in cost margin. progress to costs in particularly expect into in gross Looking sheet we on we balance improvement a continued QX, supply this With discuss in visibility continue will we we're year-over-year build actions our can our year. on savings to XXXX, chain, input the our confident and

we in expect as another using flow growth. to opportunities debt of We plan driven capital of debt. strong combination reduce And to paydown see we and committed all for $XXX year of additional our debt profit EBITDA expect margins of the recovery flow by the million this and improvement. We pay year cash to cash remain expected working another we down free

to innovation, further roll our XXXX. expect expect gains market we marketing increase we another reduce plans year of including continued And leverage in record as and our brand share We strength investments. in out Innerwear to

on Reignite an provide with our update some strategy. me on thoughts Innerwear before finishing let Champion Now

We're offerings. heat right We're success of gaining confident drive moves factors with headwinds into Champion we're and investment year. and what have on the focus taking marketing brand aggressively traction decrease these We continue headwinds this Pinnacle and pressure, Despite a our full growth. the to in quarter. our by understanding performance account over category actions these top within The marketing a global strengthen apparel increased to compounded strategic long-term out. And segmentation product the We're progressing past combination disciplined within our long-term would Champion the position channel for our the a to plans of which our our X top We channel. in year-over-year cleaning the in plan to product up the of strategy we're of global XX% our brand. We're surprisingly, a actions offering. Champion we're execution with fall/winter term, strategy XXXX drove been with seeing on profitable line the the building Champion short strengthen steps the sales went Activewear campaign for that not you play enhancement challenges implementing Champion. in number inventory these create Champion a brand real line year. We're the long-term implement with

as we've will P&L. process strategic Champion alternatives previously for respect our which Global progressing the as know With of is is to our for However, to the I time it of strategic the business, take to translate review stated, mind, top expected. actions

there's forward is when group news at continue We to path to diverse right committed evaluate this specific to And to broad add time, nothing share. the and we interest from global strong there as we've a as while appropriate of parties. remain you updating seen

consistently our business this continues laid consumers which business executing build making share process. And we a do into and consumers like and momentum. Recall, to delivering gain ago, and our strategy. market and to this by U.S. where, Next, Innerwear bringing our significant made over our We've progress have gains strategy, this brands we'd Innerwear With our marketing I'd we Reignite shop. We've discussion and when to to pivot that growth our traction wanted the how time. share. products design wanted available globalized on Reignite by our losing market brand when by to strategy increasing by innovation younger investments, out Innerwear consumers strategy, shift years declining been we in the few said

global that launching on-shelf We've to a offerings to of from this SKUs chain as supply improved through innovation velocity, further a results. the our higher-margin we're provides shortened by our global across And seeing and reduced improve new Innerwear with visibility to our talent. focus SKUs become result, large and inventory. to well market built We've XXXX. we We've XX%. We've significantly room higher design make on now with cross-geography have our efficient our our speed we're products, products lead products. As cross-category, structure for we've advantaged cost to innovation product translate pipeline time leveraged portion as our a more to robust availability

rate an at X grown with the But we to stable time, significant X% past have market approximate which the stable believe over a time, growth consumption this sales experience. this Innerwear over continue category U.S. swings seen patterns. compound Certainly, has over is years. we annual Our

indicator women future coming share the with the share the is In growth younger market from gains additional challenging share and strongest which gained both we quarter, in during We market are consumers. U.S., fourth environments. market best gaining with men the of

in while in supporting innovation margins, the categories X year, Innerwear of share was our our one historical We're half Originals in launch marketing innovation the levels to in most year largest back gained countries. was product fact, of of segment each returned higher history, multiple investments. our the with decades. categories Hanes innovation. In successful younger spanning XXXX delivering consumers. We successfully

investment breathe. at pipeline will we We Antica on launches, continue Hanes XXXX, U.S., us We launched brand year. And absorbency launches, a also the media with in younger Supersoft, which support have including and built the planned well with M both fourth especially Bonds robust Bally believe Australia innovation campaign to this grow these of share, a increased consumers. marketing, in platforms along position looking and to by product new Maidenform and our with we in our quarter,

I and take entire As close, like thank brands team. the moment to I'd a Hanes

journey teamwork to headwinds XXXX and continue sales our to respect we despite Your had challenges, agility, faced. are passion make its the the with we progress environment. especially on the transformation reason

and our a had progress of reignite XXXX. performance to inflection The expect environment cut are key milestone challenging with we positive We're another inventory, in our actions Champion We also we've reached business, making it enhancement plan. simplify However, and on our many leverage, costs and working. taken Innerwear successes. our reduce sales margins a

continued reduction with share call market turn able continued margin debt We have generation, the be and over strong Innerwear. deliver solid visibility Scott. gains cash to that, further I'll in to improvement, to And

Scott Lewis

Steve. Thanks,

But the were to focus presented chain me year capabilities, to continued leverage through deliver the the key our several echo initiatives with your business, our momentum simplify reduce thanks sales challenges. Let supply performance we team. XXXX brands costs, Hanes certainly a across global innovation metrics. on executing exit and able to

touch thoughts I'll improved on today's position, the financial on some from provide I'll the then call, outlook. For our quarter, and highlights our

continue we decreasing margin, release details lower-than-expected our expected, At quarter in to That expense we reduction more level, our were challenging U.S. our SG&A our the flow, we market a I'll and inventory results below fourth EPS. and as the expectations quarter's operating expected. We the reduce of than on with high and Activewear gross in debt operating particularly were that planned. cash FAQ dollars our ahead For proved and document. mixed drove the as more down you expectations. Sales guidance, was relative delivered for to additional This point news and said, environment consumer paid results Australia. to profit turn and in outlook than

line were and divestiture business, the and constant This as in details basis category from quarter. billion. business hosiery Australia for as in the at Americas versus from on the well X% briefly Touching points sales X% sales We in for a top our challenges growth compared more decreased continued were headwinds space line Innerwear an decrease basis, U.S. share in XX demand Sales the launches. In our business, was segment. last gained in with to in Looking headwinds year, year. The overall Internet the constant from combination sales the FX points our driven year decreased currency retail $X.X new represents of business basis consumer These quarter. was And by XXX as by a improved which it outlook innovation on-shelf the the net against XX% the organic strengthen weigh market currency within gains, decrease with business in the Champion our offset position taken continue on driven Europe. of X% macroeconomic our headwinds. On consumer-led sales profitable apparel XX% by the availability of growth. Activewear pressures product net coming compared last sales for and the actions successful U.S. quarter, prior than China. quarter brand expected decreased market. in and Activewear to U.S. and versus the decrease essentially Champion XX% to strategic as long-term our and decreased international

lower driven more XX.X% decreased and than margins. ocean costs freight. gross expenses XXX as initiatives, offset compared the was to primarily more cost offset management inventory inflation. a driven which X strong impact cost expense, above than factors and $XX initiatives SG&A, as with investments. respect by points in wage saving year, from expense savings basis our margin our lower This marketing Turning prior lower of an and variable With the outlook. The well line was adjusted expense to and as increase million was year. increased from These disciplined combination to last of over expectation. represents improvement from by brand commodities benefits The Adjusted of input our year-over-year

percent driven deleverage a an from last sales, As operating the SG&A margin sales, The over lower of primarily points X.X% XXX adjusted year. basis XXX despite of quarter resulted by impact investments. This increased increased expense brand SG&A year. points prior of lower basis in increase dollars was over for the an

P&L, tax excludes was of share a $XX $X.XX. expense earnings interest tax was at million and of $XX million, expenses million. Looking adjusted remainder were which Adjusted the onetime the quarter per $XX discrete benefit and for the other

Turning cash flow. and to sheet balance the

billion operating an to we we goal, as saw $X.X pay which of than our and the debt We million flexibility was continue up $XXX further financial capital. We are to million the balance we paid on increase operating position the we in our full sheet inventory reduction continue year strengthen for reduced year. This million and target compared generated inventory, as with improvement of our of to our and of our higher-than-expected increase than by more $XXX $XXX $X.XX more We liquidity. our of represents of was capabilities for initiatives. implement ahead build down million tied driven million and as which the inventory of inventory management. cash target, flow year, or XX% around ended $XXX unlocked down working than billion, expected cash last million $XXX flow. ahead successfully We faster our improvement We our inventory as progressing debt year, debt ahead $XXX

down X.Xx quarter our in flow of was and net X.Xx to of below X.XXx a cash remain was Our to EBITDA using basis the free leverage XXXX. We on fourth pay covenant quarter peak debt adjusted all of committed to our of second debt. our

position, EBITDA combination debt We led our in of the a to our XXXX, now all billion than $X.X further increasing expect and guidance. turning growth to fourth leverage the reduce more And of to liquidity driven has at continued reduction. end to by this of quarter. And

the categories comments continuing of we the based my in on will that a remain particularly our guidance level, the first of challenging ranges. expect All sales high quarter. adjusted refer from XXXX, will midpoint environment At our results to operations be to in

driven by We the X expect positive on progressions top factors. through line trends year,

First, our global business. Champion

on we're XXXX inventory is team actions new Fall/Winter the the the our approach. we taking first the of offering a Therefore, this global QX through Champion cleaning the sales segmentation particularly the global first discussed, that half and year. previously ahead in we're with we As line trough believe from on that's of moving based in launch, our up channel,

launches our marketing through first Innerwear share consumption we as category Second, investments. and moderating headwinds to positioned the category and gain of increased on outperform be market our in to to quarter before innovation our analytics the challenging global we're consumer behind expect And we based year. forecasting in the business, the well most the rest trends, expect brand

to the our based strong While environment, growth operating cost a is outlook input conservatism on sales into we've cost have as year. and the This balance well we we positioned challenging sheet layered profit as for visibility well our deliver expect outlook. savings profit we're believe we the initiatives on

with Adjusting essentially timing sales points on to the expect we in last and EPS currency expense impact debt outlook, profit quarter from to last we lower to We to expect for first is for divestiture our the of X%. to both reported quarter and headwinds, due operating is to said, profit which first the increase year year. line U.S. with expected to are XX%. That of as be basis year-over-year, expect net operating to hosiery interest approximately decrease quarter grow approximately lower compared in over approximately expect decrease outstanding XX% constant gross operating the prior up than share we respect expense With a expand year's basis XXX loss earnings sales year. year. balances, last year-over-year XX% to in to with faster each $X.XX, refinancing, interest even expected margins XXXX. And of approximately resulting and FX improvement margin in per organic And an operating

year Turning outlook. to our full

reported net year. constant organic for the currency impact to Adjusting sales X%. headwinds, basis to X% FX to U.S. the a as last expect on decrease and We treasury expected compared sales are of approximately decrease divestiture

EPS, expect over approximately XXX a midpoint prior $X.XX, We which increase points operating implies full margin for to operating to and growth year our X.X%. And to profit range prior XXX% over guidance expand approximately XX% of year. year the basis is

expect additional million operations Lastly, $XXX working we from the and opportunities, flow generate capital for with our recovery year. profit approximately cash to in expected

So while a made we challenging in XXXX positive a significant a performance reaching our margins inflection of leverage. progress was from and in key across including our metrics, closing, perspective, number sales

As we particularly sales the in look first quarter. challenges to the XXXX, we expect to continue,

call costs view we growth profit to strong year flow operating cost have well However, I'll and to operating T.C. balance cash and sheet. to we're delever strong visibility to to we with on with Furthermore, continue our that, deliver expand another believe savings to positioned the outlook. to our over of to and deliver EPS margin turn initiatives, And continue input

Stephen Bratspies

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

Operator

will [Operator of with from Instructions] Sole Jay the question first Our line come UBS.

Jay Sole

just margins you Champion. at Champion. on just Can question the about first is talk My

can just outperform guidance, the and the You for Champion and I for plan the if comments what improve talk then, fiscal based guidance then we for about your expecting the mentioned to expecting you the specifically category. about fiscal talked are fiscal margins expectation Innerwear? 'XX, you mean margins in about 'XX, about for to maybe what's Scott, talk 'XX? And

If bit there, a you color could that give super would us more be little helpful.

Scott Lewis

thanks question. your for Jay,

you're to speak So also but about expect XXXX want a margin to margins I'll on overall, about speak of and levels. One, to of Champion, we what there. think kind couple talking as

but total and champion for not company. this the business, just also applies So Activewear a 'XX, in

us Our with so largely margins an were right? And into that margin we enhanced costs that forward. can move pressured go by in higher of 'XX, and saw we forward 'XX behind with now is as the momentum inflationary kind we going recovery now,

your year, saw total So elements some again, see input going the Champion, costs. same to of in we the

We in rest of volume bit of also business. the the a pressure 'XX little -- a than had sales Champion

the look think couple of you As at mind of to things XXXX in keep in I kind cadence outlook, 'XX. margin sure from understand to 'XX you a that you to the need make

at talked we beginning quarter. margin 'XX, to we and about upper the at in get -- we And XX.X%. range of So and by this we time the fourth achieved overachieved the quarter actually the XX% expected that that to that the fourth recovery --

so you margin now a at we're And from look standpoint. as and levels pre-inflationary back that, to

As our at you to gross and first quarter, the that move we're is steady in margin. holding XXXX, We XXXX. throughout XX.X% profit that had outlook

in We confidence margin cost have place. good that really because cost put cost as from the as of already savings have we that an high well profile we've degree a in input it's visibility,

think important understand about XXXX. So that's into as really to going you margins

and lot hear 'XX there's going the top from environment pressures a it's we've still standpoint for sales want some, conservatism and sure in we want and I side, view of of line. And profit as lot a what make point in in, and of to speak profit profit wanted challenged. knowing the layered profit sure volatility outlook some is still make anything on clearly, sure potential line we've the derisk that mind make a change our a we fine we to The make of consumer dynamics were that. managing baked already our already to Another that can Steve standpoint. our looking at as is unanticipated that, is look at the on incremental and but lot to we top overall we the is Keeping we make sure to -- of kind to we from outlook considered hedge outlook, beyond sure we you

that, X, it's we to quarters putting Now out. talked really look a we out we there of we all good of were, sheet. know to we this the sales bake as that right? the sure -- have, example that upside good have again, profit We volatility case not we the And downside profit the unanticipated on and X outlook. sales in you savings. standpoint. We protect visibility make roll want cost can cost, We wanted cost again, as at balance from before, a see there's didn't of make We outlook, in, our we sure again, factoring that input to on lower about had

to anything add Steve, to sell, do that? So want you to

Stephen Bratspies

Yes. Thanks, Scott.

to Champion to And first make the we're sure half and are. look the categories think is you of channel This year. When going the year. sales have year. the doubt difficult environment guide environment. go in with in no start I we're space, for plan as to this first taking where it clean There's the trough the be the It's that's ahead bit see think we're be to confident fall to up the for about sales in progressive at cautious, we us we the actions about is delivered a be that our going quarter are Obviously, think we the the that that to the starting growth retailers understand pretty our or little for and forward. line been And numbers and when going specifically, have for year. Obviously, year business we we a throughout we you in But launching. improvement of but clean. current be 'XX challenging. consumer being

the brand course, Champion business support a be model more important going replenishment that half to a the spending line really set for of introducing strong year, of behind the be response gotten The which, and bring Pinnacle the to to ready we're normal the accounts, this. going Our tone be chase has back fall/winter we're cadence. to to brand. We're collegiate from and in really is going in really is going

grow So that we we're of good pivot forecasting analytics we're in to and trends think in business headed seeing to was much going the to this business. Global pretty understand of back brand positive And gains QX, a global time. category start to space. Innerwear really pleased a X% the lot we more where We've the and the half for over going to we're the but to same continue thing in early share. where that the category with got is took can then of the And part and year and Innerwear. I'm share to down take improve. to The in continue year, the be those we're expecting in share

innovation have better for think our conservatism our the that And than of front some as lot we half in, going profit the known outlook margin to coming, be we're this that included the in. confident said, there's We're that's going is that talked back haven't we for and coming, with at So sure. point. the leads the media year, really Scott with leaning be all to in built to half about. a that's And Scott opportunities savings

volatile So adapt we top curves. to can a

Scott Lewis

more And just margins. Innerwear you're about Jay, can thing one I add asking

last finished mentioned we in and quarters X margin is -- XX.X%. I 'XX we had the look pressure mind, to year significant you It has important too, earlier So I was about QX and margin just one thing think over the this the at at in QX in X.X% saw expansion. as XXXX, in about Innerwear keep

margin So we're we and I levels. again, really pre-inflationary demonstrates, again, are that backing in where

Operator

Citi. Our next come line of Lejuez will question the from with Paul

Paul Lejuez

are permanent the year offset could gains are the about percent retail mentioned increase move seeing on can to side. gains. And that permanent we that or seen on any business? end as in on gains? then curious then the flow And your you curious, year, What those the permanent space you've seeing a Innerwear how benefit just gains? losses line that is throughout What just there net places on of guidance. if of the drag Maybe and retailers of we from you Curious you're size guidance? those what a Australia frame the operations what if where expect space much inventory cash you talk the will you space last, would should And cash your be

Stephen Bratspies

Sure.

been A it me the really start us. Let the in lot with key we've gains pleased not I've getting is been of of innovation. it, for by with that driven accounts space all space gains.

So the innovation that's with product that year new taking women's, are lean men's, market the as the into we're Hanes this Maidenform, bringing across Originals, and And kids by last incremental launching. M space. with now board, it's we to year Supersoft coming Anti-shave, all

and space. the customers, talk as good news thing out other want sell gaining that's better we because don't and in, and that's So see is business, on, we're away the going go other all that's I And brands, you that's the to our performing about base faster specific but the for from retailers. you'll space turning and national us look, permanent you and taking business if

there. there's those some making and choices out they're So going obvious ones

label other it were right having really share think interim The had is a as the and I we other thing I in the in question past market is not that that this and losing the Private role important got now. discussion, I label it's is the important, actually day think been is private playing

and space go to out for that as permanent gain So to that's opportunity continue well. us

broad, channels, our across it's it's going going across it's it's to drive and business forward. we're categories, because pleased So

Scott Lewis

in a cash deliver know the there's flow that of of 'XX. 'XX, to very a solid really -- what execution on in working business that on we lot team proud of flow, cash opportunity did capital delivered we really great across the For job managing of

returns were flow upside saw in cash of we back were below year in So We for 'XX, what working that ended that flow, cash was right? that, of targeting. store guiding the $XXX And for to $XXX to inventory. We year. [indiscernible] million the fact, driven we million million flow. us had and we especially that inventory cash So by $XX capital,

and flow with by job great debt accelerated again, there cash accelerated the execution So which paydown. team,

had So that as 'XX, -- the little acceleration in we in 'XX. you cash to into mind, Keeping of move the a

As seen we year, the historical $XXX that for flow we've guiding for in we cash the to look 'XX, past. range again, are within million the of

As far as the with mix, still again, I capital. would say, opportunity working there's

good the mix to to cash capital all And at come working there. capital. of that's ADR got still And look opportunities. working opportunity come say is you X/X I'd As of working a working generation, capital. from Inventory, X/X of track we've There's going and the going to across going from that's capital. managing profit flow record and there's of overall come about

Our team is cash very like conversion especially for cycle. focused,

really look can see I we've that, As at what our into beyond opportunities get capital we in working as 'XX. achieved already I

Stephen Bratspies

think and business. that number exact on. of don't the big And And HBI was of but that percent the final Australia for your the right is. is number, majority I total Innerwear release We anchor as is business about how you in question to

Operator

question Our will Barclays. come from of Paul next the line Kearney with

Paul Kearney

channel inventory brand mentioned Can the you where over for versus Hanes cleaning Champion. levels out by inventories for Champion? You go are

X%, the sales main So the question. you improvement? But And guidance can all do you that the the that back what business down goes it what QX see full where through there? for to with organic And confidence particularly behind channel year XX% down reaccelerate and inventories, the first are drivers gives year? the

Stephen Bratspies

Sure.

a business, puts really year at it So good position. out inventory the in by closing us but we perspective, from don't an X.XX% break

I our we're portfolio. think across balanced

through pretty SKU actions that applies cycle consistently planning, across process business. capabilities, life discipline management the reduction improvement inventory Our and

of inventory we're actions say the are if and same and mindset, you taking So philosophy across manage how will, business. and methodology consistent we the we

we're business. like shape across feel total we the good So in

little go than deeper earlier. I'll I the on maybe sales, things some that of a terms talked of about In

the the predictive good We predictive now on it's that understanding, in pretty metrics. along capability where Innerwear of are based to and historical is and tied And business a particularly algorithms right of macroeconomic have analytics with correlations of where understanding market that's forecasting going.

our things. bringing, are some category that innovation there's And which one I'm all for be going. some But going past. pretty the good lean is the to launches this across today, There we're across encouraged year higher shape across are to year. We're with that think the improve will some where we're to than things the XXXX throughout So timing media going we And year year. yet. if another in that the going we're innovation top very we which it actions, into think have of Innerwear, Valley, historical inventory on timing, at was look we have about. with the where in biggest understanding bonds, to we Hanes, is spending shipment at levels we

the you're is Innerwear So forward, going I'm I that. with see the as we in a same Champion business And and ramp go the comfortable think to thing.

you're year, actions to business think I to is first have for sell see to going been that Pinnacle the of it's are that college that in flowing up that doing working affects year. we but cleaning well. normal business. of are we enough and more prepare the business Retailers that well. think last that in to cautious, going last room heat it's year half. in out then for half a a the in be And going us. It's and this bit in, we accounts is to taking going business some that's we're our half. And ourselves the coming so coming business to that's land of years. the the a the excited back to clean we're the lot is choppy I The we're about We trough think had mean that's fall/winter couple the going back -- rebound in

focusing this a us to going our to time. real on model leverage allow a are supply and We in chain strengths than year model capture demand more made-to-order replenishment that's

that's in growth than the that. we've Champion. process working. on past disciplined help we're It's brand, SKUs the driving with out our to to has is going more been and working spots lean going partner the it's our never continued we a have going China there. to more that there's So spending to continuing accelerate business. campaign been that to are globally, grow. It's marketing that behind into around And be Like the around drive We're world

to we company. We've the activity of business ready So a We're think the move lot got a forward coming. as throughout is year. going

the mentioned the in and as the place with back We structure going in that have earlier, to is come Scott, you profit cost half.

to business got like got year. programming drive nailed So the we and feel we've we've the for sales down kind the of

Operator

Wells come line Our Boruchow from next question with Ike will the of Fargo.

Irwin Boruchow

be follow-ups A you expecting I me, answers that think about you're the I year, heard sure more to gross the said couple some of questions right? margin of to to I think you Was for gave. XX.X%. the Steve, you right, guys -- make for just

Scott Lewis

That's correct, Ike.

Irwin Boruchow

of more is but any QX there then it? in kind of Is keep of business to has lot, QX. mind? changed is The kind you it kind and to a that little there seasonality the higher similar like a was And of the Okay. XQ if curious, than usually I just bit rest year seasonality

Scott Lewis

the savings we a out the roll to steady so again, cost the the there. to costs flow a I from And is The Yes, earlier margin all the back again, conservative But can typically, in I breakeven took what I profit of kind that standpoint the we incremental the flow earlier from I more cash the of it's lower, we have more balance are that, that on not mean all guy. 'XX, business. of I again, would more right? And sales course would question, in at flow. steady cash We've throughout sheet, -- like do from look quarters. input guide would year. I seasonality had see is assumptions standpoint, derisk we in margin can gross the are is over mentioned But make the cash hold in, first and cost, gross the seasonal. rate a anticipate. as great of outlook half, just a baked to generated more only to we half. I from Again and sure visibility say think not a The this you that we hedge that's the

So.

Irwin Boruchow

to you just last just would if I'm And a and both it. year? and a I Got for chance then guys for quick for And give one. specific guess, what the confidence also QX Champion -- QX decline you're troughing, the in Champion sounds to year-over-year growing understand there's XQ, in it like guiding but which and you Innerwear because plan. than trying not, is decline Is the your there missed in guide worse Innerwear fiscal any had you're

up I'm us be just kind of if that a trying there's trying of would to if more that -- any into, little I'm you give bit to kind to can -- bit great. a little way So square

Scott Lewis

chime sir. add some Yes, but of guide let you kind to segments quarter for about detail. don't first We segments, feel top thoughts give free me directional and in and the about line

That's be on U.S. the category Innerwear, the line year-over-year. to is for mid-single where with business we first U.S. down Innerwear expect So the quarter. in digits

the Europe it the low be basis XX% referenced standpoint. cautious double then On International talked on Australia a constant around of from some and digits earlier will Again, retailer a that currency. we the just and that challenges side, down international reported -- business, down with Steve about view

we've the kind note keep first some more X/X lapping talking kind be couple in a down of It's last of about. from of mind. there's XX% the about headwinds quarter, been important to in kind of that to there of timing is same things that expecting that Activewear, that to U.S. histories On year. decline the of We're roughly

SAP. first If quarter, remember, you last year implemented we in the

SAP of shipments ahead that was So timing some implementation. acceleration there of

a that standpoint, year there's then benefited and collegiate last QX of changes also are the fee license of have We some sales you Tom from a just to for that. we we kids is in so last business business, that just unseasonably year-over-the-year piece with model, lapping. And that our strong move some and from

of the X/X that's again, So fluctuation from year-to-year.

So.

Operator

Holden line come Hale will the question Our of Barclays. with next from

Hale Holden

you us just on historically much has and just for if year the wondering you context It in down was a like has the you're innerwear first replenishment why category think feels that the what course understanding been of category. lot within give I the the share down been so projected gaining quarter? some could over a category,

Stephen Bratspies

for Thanks the question. Yes.

last and X%, everything like in category little expecting with had to all and and to bit QX has supply to you that a bounce been category category know I roughly And volatile that year, you look would feel continuation historically, think that is X%. that growth category 'XX, the a And you down decelerated expect you a doesn't roughly then was couple of about that's look back it certainly on, we've grown when of the and down. the that, go had The into X% unit that you business. And at we that's and been we're over this back has I go in going QX. When back back volatility been bit at go the actually a years. little a you've it's X%. spike gone look but and years, X it through chain last huge about

been that during has X%. our growth And about time

a years, going like is from it feel category But look at that. is behaving to to going be we're pivoted impact good, very levels. category. the you Innerwear and choppy. prepared rate. we're and historical take at return actually at has historical category what over doesn't And goal look working There to There expect now in, the to and our So time to in innovation we we've it's that the macro, that's the Xx this was been category it that weren't we outpacing when to in you we've quarter-to-quarter, the is year was and this levels, coming at were that time been grow we've work share do when to is growing. It's saying going beginning, big But stable that reignite on been we're when the share. going X we if a done. Again, And be very, our and category to a we losing of that past. a better business

Operator

Our line JPMorgan. Casella with Carla next of question the will from come

Carla Casella

Champion side? a -- global A assuming us about figures big years of as can the a of it that years lower, global ago, number declines you brand. ballpark give Have was you $X how sense ago, but any or to billion. couple I'm the is is a for

Stephen Bratspies

on global right using right. Carl. that through we're Obviously, you Thanks, talked strategic Champion process roughly historically, number is number, The were about that the going we've now.

little want years. we I numbers number, bit the the the that business $X of last declined to sensitive that to couple has be billion So a share. But

So by million, we million the roughly is a it's maybe little than $XXX number use. smaller that $XXX

Carla Casella

seen lost can then And that half new in half. you that any get the and you've lost how lower shelf first back? launches the the with product growth guess that space that decline of of much in less about able space be are won't Is you turns? in there to Okay. dropping versus you've I back in Or out brand Champion risk new talk kind

Stephen Bratspies

think When business, seasonal. you about it's Sure. that

your business, have have So you you your fall winter. spring/summer

receptive of coming is to The that lot like resets a products very relevant I into happen very a up job relevant. there's consumer So key our good and what show that's our have we every are that. we year. single And brand have. feel And very with to fall/winter, innovative customers of

we platforms global a much to gone struggled sure business, refocusing of through on moves we space the category. to the we're us so we our much, behind that play to and at which what very have working the clear product, years, how and to our we business, go driven channel Champion, exception the more making that. The category. And we of big going that in last about segmentation why we're we're which you has certainly it's the faster and lost, the than couple to as campaign. We're When we've going what's declined behind That no than that's I said, that have more the the market. going you operating efficient, certainly feel brand, building makes global faster historically down and creating company as a part on good are heat a really category in strategy have market, as changes for through where we look past the market. compete product

So to realized. back that come we in starting in improve business going the And that's our why address of they're starting the put the and to see half in to a is as strategy market. is lot strategic initiatives together, of we're performance year to this

Operator

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

T. Robillard

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

Operator

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

now disconnect. You may

Hanesbrands (HBI) 15 Feb 242023 Q4 Earnings call transcript