Hanesbrands Inc.

Good day and thank you for standing by. Welcome to the Haines Brand's third quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's 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, T.C. Robillard, Vice President of Investor Relations. Please go ahead.

Good day, everyone, and welcome to the Haynes Brands quarterly investor conference call and webcast. We are pleased to be here today to provide an update on our progress after the third quarter of 2024. 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 Haynes.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, our ability to successfully execute our strategic initiatives, including our restructuring and other action-related items, our ability to deleverage on the anticipated timeframe, and the inflationary environment. 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 operation. Additional information on the quarter's results and our guidance, 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 Bratsbys, our Chief Executive Officer, and Scott Lewis, our 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 to our third quarter earnings call. Haynes Brands delivered another quarter of strong results. Sales continue to improve around the globe, and we're at the midpoint of our guidance range. And we exceeded the high end of our range for gross margin, operating profit, and earnings per share. We generated cash and further strengthened our balance sheet as we continue to reduce our leverage. And with strong visibility to input costs, cost savings, and debt reduction, We also raised our fourth quarter and four-year outlook for operating profit, earnings per share, and cash flow. I want to thank all the Haynes Brands associates around the world. Over the last several years, and the last 12 months in particular, we've undergone significant change. Through the team's dedication, hard work, and adaptability, we have significantly strengthened the operational and financial foundations of our business. delivered quarterly results for our stakeholders, delivered value to our consumers and our retail partners, and we have replatformed Hanes Brands for the future. As we highlighted last quarter, we've taken a number of strategic actions to fundamentally strengthen the company and create a more focused, simplified business, one with more consistent top-line growth, higher margins, strong cash generation, a wide competitive moat, and multiple levers to unlock shareholder value over the next several years. We're seeing the benefits of these actions in our results, and we have strong visibility to continue profit and cash flow improvement for this year and beyond. We're progressing on the top line, as revenue trends continue to improve sequentially as expected. On an organic, constant currency basis, sales in the quarter were consistent with prior years. and we're well positioned to deliver revenue growth in the fourth quarter driven by several factors. We're executing incremental holiday and global brand programs. We gained incremental distribution in the Americas. Our Australian wholesale business is rebounding. We have higher levels of brand investment and will anniversary last year's challenging fourth quarter. We're increasing our competitive advantage. In 2024, we've launched innovation behind all of our major brands, Hanes, Bonds, Maidenform, and Bally. In the U.S., innovation shipments are up over 30% year-to-date, and we're on pace for another record year. Innovation is enabling permanent retail space gains, and it's driving market share gains, particularly with young consumers. We're delivering structurally higher margins while supporting increased levels of growth-related investments. In the quarter, we delivered a gross margin of 41.8% and an operating margin of 13%, while simultaneously increasing brand investments to more than 5% of sales. The structural improvement in our margins is sustainable, as it's driven primarily by assortment management and permanent cost savings initiatives. With respect to assortment management, we're seeing the benefits to gross margin from our continued skew optimization and reduction efforts, as well as the addition and success of margin of creative innovation. In terms of our cost savings initiatives, this goes above and beyond simply removing champion stranded costs. This is about operating with simplicity and focus. It's about streamlining our processes, optimizing our supply chain assets, and fundamentally changing the way we work. In turn, this is driving a lower fixed cost structure, increased operating efficiencies and utilization, all while improving service levels and in-stocks with lower amounts of inventory. As we highlighted last quarter, we have detailed plans in place to deliver a step function change in our cost structure and drive to our operating margin target of more than 15%. Specifically in the quarter, We reduced headcount and corporate costs across the organization, and we continue to right-size and rebalance our manufacturing and distribution networks. We're also generating cash, paying down debt, and reducing balance sheet leverage. Year-to-date, as of the end of the third quarter, we've generated approximately $200 million of operating cash flow and lowered our leverage nearly a full term. Since the end of the third quarter, And with the closing of the Champion Divestiture, we paid down an additional $870 million of debt in the month of October, which puts us well on our way to delivering our goal of $1 billion of debt pay down in the second half of the year. So in closing, we delivered another quarter of strong results, and my confidence and enthusiasm for the future of Hanes Brands continues to grow. We're seeing the benefits of our strategic actions in our results, and we have visibility to continued margin improvement, cash generation, and debt pay down in 2025 and beyond. We are now even better positioned to accelerate the flywheel of increased earnings growth and faster de-leverage of our balance sheet to drive increased shareholder value over the next several years. And with that, I'll turn the call over to Scott.