Hanesbrands Inc.

Good day and thank you for standing by. Welcome to the Haines Brand's first quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your host today, TC Robillard, Vice President, Investor Relations. Please go ahead.

Good day, everyone, and welcome to the Hanes Brands quarterly investor conference call and webcast. We are pleased to be here today to provide an update on our progress after the first quarter of 2023. Hopefully, everyone has had a chance to review the news release we issued earlier today. The news release, updated FAQ document, and the replay of this call can be found in the investor section of our Hanes.com website. On the call today, we may make forward-looking statements either in our prepared remarks or in the associated question and answer session. These statements are based on current expectations or beliefs and are subject to certain risks and uncertainties that may cause actual results to differ materially. These risks include those related to current macroeconomic conditions, consumer demand dynamics, the inflationary environment, cybersecurity, and our previously disclosed ransomware incident and any ongoing impact of the COVID-19 pandemic. These risks also include those detailed in our various filings with the SEC, which may be found on our website as well as in our news releases. The company does not undertake to update or revise any forward-looking statements which speak only to the time at which they are made. Unless otherwise noted, today's references to our consolidated financial results and guidance exclude all restructuring and other action-related charges and speak to continuing operations. Additional information, including a reconciliation of these and other non-GAAP performance measures to GAAP can be found in today's news release. With me on the call today are Steve Braspies, our Chief Executive Officer, and Scott Lewis, our Chief Accounting Officer and Interim Chief Financial Officer. For today's call, Steve and Scott will provide some brief remarks, and then we'll open it up to your questions. I'll now turn the call over to Steve.

Thank you, TC. Good morning, everyone, and welcome. When we entered the year, We spoke about our expectation that the global operating environment would remain challenging in 2023. As a result, we would focus on balancing the execution of our long-term growth strategy with driving near-term performance, including a return to high 30% gross margins as we exit the year, generating $500 million of operating cash flow, and paying down debt. I'm pleased with how our team remains agile and focused on controlling the things we can control. which drove progress against both our near-term and long-term goals. With respect to our near-term performance and 2023 goals, for the quarter, we delivered revenue, operating profit, and earnings per share that were in line with our outlook. We successfully refinanced our 2024 maturities. We reiterated our full-year guidance. And we began seeing the benefits from our initiatives to unlock working capital. Specifically, our inventory declined sequentially and we generated positive operating cash flow in the first quarter, which historically has been a quarter that uses cash. Turning to our long-term full potential growth strategy, during the quarter, I had the privilege of spending time with our team in Australia, as well as our associates in our world-class manufacturing facilities in Vietnam, Thailand, and Honduras. This gave me a chance to see firsthand how our full potential work is unfolding. In Australia, where we have a much higher mix of direct-to-consumer sales, I was able to walk a number of our Bonds and Broads and Things stores. Seeing the brands brought to life, the way we merchandise innovation, and how the technology and automation investments in our distribution centers are generating increased efficiencies gives me confidence that we'll be able to support our growth in our D2C model. In walking through our manufacturing facilities, I'm always energized by the scale of our operations and the opportunities it presents. I was able to meet with many of our associates who are constantly finding new, innovative ways to leverage our scale to improve efficiencies. I saw a number of these methods being used at our facilities, including the use of data analytics and machine learning to generate greater output on our selling lines. We're achieving tangible results from the progress we've made to date in transforming our company. and our progress continues across a number of our full potential initiatives that should help us become a more consumer-centric, data-driven organization and make us more efficient and profitable. I remain incredibly excited about our portfolio of brands and the innovation we're delivering. In Hanes, we expanded our distribution of our Hanes Originals line, which is being supported by a national media and advertising campaign. Hanes Originals is a line of innovative products aimed at younger consumers and were encouraged by the initial response from both our consumers and our retail partners. We also continued the extension of our global innovation platform of absorbency products. After a successful soft launch, we expanded distribution of our Bonds toddler training underwear across channels in Australia. With respect to our technology initiatives, we continue to improve our capabilities and user experience on our websites, including a more modern payment architecture and easier site navigation. We also launched our Hanes Loyalty Program in March, which followed last November's launch of our Club Champion Global Loyalty Program. These programs are ramping nicely and should help us better optimize our marketing investments over time as consumers become more ingrained within our ecosystem. We also achieved another milestone on our journey to becoming a more data-driven organization with a successful conversion of our Champion North America business onto our new SAP platform. Our ongoing migration to a common technology spine for the global organization will enable better business analytics and planning, which in turn should lower costs, improve efficiencies, and reduce working capital. On the supply chain front, we continue to drive increased efficiencies, faster speed to market, and cost savings across multiple initiatives. We continue to optimize our manufacturing footprint, which is lowering fixed overhead. We're improving speed and efficiencies within our DCs by implementing additional automation in our picking and sorting systems. We've significantly reduced our manufacturing lead times, particularly out of Asia, and we're also realizing benefits from our skip flow initiative. By leveraging our global scale, we're able to bypass our distribution centers and ship product from our factories directly to our large customers' warehouses. This lowers costs for both us and our customers while also increasing delivery speed. And in terms of sustainability, we continue to build on our leadership position across our people, planet, and product pillars, including donating essential clothing to people in need, using renewable sources for nearly 50% of electricity needs, as well as reducing packaging weight and single-use plastics. Not only are these initiatives good for the planet, but they're good for shareholders as they lower costs and drive positive consumer connections to our brands. As you can see, we continue to make steady progress with the implementation of our full potential plan. We're becoming more data-driven and consumer-centric, which should drive more consistent revenue growth over time. And we're generating savings and efficiencies that positions us to exit the year at a high 30% gross margin level. So in closing, the year is unfolding as expected. We remain focused on driving near-term profitability, generating cash, and paying down debt. And we'll continue to appropriately balance our near-term performance with the execution of our transformation growth strategy. And with that, I'll turn the call over to Scott.