Gildan Activewear Inc.

We also issued our interim shareholder report containing management's discussion and analysis and consolidated financial statements. These documents are expected to be filed with the Canadian Securities and Regulatory Authorities and the U.S. Securities Commission today, and they'll also be available on our corporate website. Now joining me on the call today are Glenn Chimendi, our President and CEO, Luca Borelli, Executive Vice President, CFO, and Chuck Ward, Executive Vice President, Chief Operating Officer. This morning we'll take you through the results for the quarter and then a question and answer session will follow. Before we begin, please take note that certain statements included in this conference call may constitute forward-looking statements which involve unknown and known risks, uncertainties and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. We refer you to the company's filings with the U.S. Securities and Exchange Commission and Canadian Securities Regulatory Authorities. During this call, we will also discuss certain non-GAAP financial measures, reconciliations to the most directly comparable IFRS measures are provided in today's earnings release, as well as our MD&A. And now, I'll turn it over to Glenn.

Thank you, Jessie, and good morning, everyone. We're pleased with our third quarter results as we continue to drive profitable growth. especially in a macroeconomic backdrop which remains fluid. We saw strong net sales growth of 5.4% in activewear and adjusted operating margins of 23.2%, which allowed us to deliver record-adjusted diluted EPS of $1 this quarter, an increase of 17.6% versus the same period last year. These are record-setting third quarter results which once again showcase the effectiveness of our Gildan sustainable growth strategy in driving strong financial performance. Our sales in the distributor channel remain healthy and we're seeing sustained momentum in our national account customers which is supported by strong overall competitive positioning. We continue to drive growth in key categories. We're very pleased that our innovation pipeline continues to create excitement, and we have now introduced new brand offerings such as All Pro and Champion. Furthermore, our Comfort Colors brand continues to perform very well. This year, the brand is actually celebrating its 50th anniversary, a great milestone for Comfort Colors whose pigment-dyed shirts are redefining comfort and style. They're crafted from 100% ring-spun cotton grown and harvested in the U.S. using a pigment-pure technology which helps to reduce water and energy and shortens processing time. So as we turn the page to another successful quarter of execution, we are narrowing our adjusted diluted EPS guidance to a range of $3.45 to $3.51, and also updating our full-year adjusted operating margins, CapEx, free cash flow guidance. Luca will detail this in a moment. We believe that this is an exciting pivotal moment for Gildan, and we're enthusiastic about the next phase of our growth journey. We're delivering constant execution of our strategic priorities. We're capitalizing on the largest innovation pipeline in the company's history. And now, we're focused on planning the integration of the proposed acquisition of Hanes Brands, which will broaden our portfolio of retail presence as we look to drive meaningful run rate synergies of at least 200 million by leveraging our best in class, large scale, low cost, vertically integrated manufacturing network. We continue to expect the transaction to close late this year or early 2026. As you can expect, we have put in place an integration team that have begun planning for this combination. At this point, there is no further commentary that will be positioned to provide for the proposed transaction. In conclusion, we continue to execute from a position of strength. We have a solid foundation We're focusing on our GSG strategy with our strong competitive positioning, all of which is putting us in a great position to execute on the eventual combination with Haynes Brands and ultimately drive long-term shareholder value. I look forward to answering your questions after our formal remarks, and now I'll turn it over to Luca for a financial review.

Thank you, Glenn. Good morning, everyone, and thank you for joining us today to discuss our third quarter results. Let me start with the specifics of the quarter, then turn to our 2025 outlook and guidance. First, the quarterly results. We reported third quarter sales of $911 million, up 2.2% year-over-year, in line with previously provided guidance of low single-digit growth. The 5.4% increase in activewear sales was driven by favorable product mix and higher net prices. As Glenn mentioned, we continue to drive growth in key categories and are experiencing robust demand for comfort colors while supplementing our portfolio with the addition of All Pro and Champion. Sales to North American distributors were solid, complemented by sustained momentum at our national account customers, driven by our strong overall competitive positioning. Sales in the hosiery and underwear category were down 22% versus last year, which reflect, as expected, a timing shift of shipments into the fourth quarter and to a lesser extent, unfavorable mix as the category experienced continued broader market weakness during the quarter. Turning to international markets, sales were down by 4 million or down 6.1% year over year, primarily reflecting ongoing demand softness across markets. We don't typically spend time on our year-to-date results, but just a brief comment that on a year-to-date basis, our consolidated revenue growth is at mid-single digits, excluding the impact of the exit of the Under Armour business in 2024, setting us up well for the full year. Shifting to margins for the quarter, our gross margin was 33.7%, a 250 basis point improvement over the prior year, primarily due to lower manufacturing costs and favorable pricing which reflect price increases implemented to offset the initial impact from tariffs. To a lesser extent, we also benefited from lower raw material costs. SG&A expenses were $95 million versus $84 million last year. Excluding charges related to the proxy contest and leadership changes and related matters, which were almost entirely incurred in the prior year, adjusted SG&A were still 95 million or 10.4% of sales compared to 78 million or 8.8% of sales in the same quarter last year, reflecting higher variable compensation and IT related general and administrative expenses. As we bring these elements together and adjusting for restructuring and acquisition related costs, primarily related to the proposed Haynes Brands acquisition, as well as the costs related to the proxy contest and leadership changes and related matters, which were almost all entirely incurred in the prior year. We generated adjusted operating income of $212 million, up $12 million, representing a record 23.2% of net sales. This reflects an 80 basis point improvement year over year, which came in ahead of guidance we provided. Net financial expenses of $44 million were up $13 million over the prior year due primarily to fees related to the committed financing that we obtained for the proposed Haynes Brands acquisition and due to generally higher borrowing levels. Furthermore, in connection with the proposed acquisition, as you may have seen, we announced on September 23rd a private placement offering of US $1.2 billion aggregate principal amount of senior unsecured notes across two series. The proceeds from this offering will be used to fund the proposed acquisition of Haines Brands, refinance its debt and cover related transaction costs. Taking into account all these factors and adjusting for restructuring and other costs and the financing fees in connection with the proposed Haines Brands acquisition, we generated Record adjusted diluted EPS of $1 up 17.6% compared to $0.85 in the comparable period. Now turning to cash flow and balance sheet items for the first nine months of 2025. Operating cash flow was $270 million compared to $291 million last year, primarily reflecting higher working capital investments. After accounting for capex of $82 million, we generated approximately $189 million in free cash flow in the first nine months of 2025, of which $200 million was generated in the third quarter. During the first nine months of the year, we returned $286 million in capital to shareholders, including $102 million in dividends, and repurchased about 3.8 million shares under our NCIB program. Finally, We ended this quarter with net debt of about $1.7 billion and at a leverage ratio of two times net debt to trailing 12 months adjusted EBITDA, at the midpoint of our targeted range of 1.5 to 2.5 times. Now turning to our strategy and outlook. As Glenn highlighted earlier, we are pleased with the team's continued execution as we approach the end of a very solid year. We continue to tap into the largest innovation pipeline in the company's history with more product launches to come in 2025 and into 2026. Now turning to the outlook, we remain focused on operational agility and committed to executing on our GSG strategy in order to drive strong financial performance as we navigate a fluid macroeconomic environment. We are updating our 2025 guidance as follows and expect revenue growth for the full year to be up mid single digits in line with previous guidance. Full year adjusted operating margin to increase approximately 70 basis points compared to previous guidance of up approximately 50 basis points. Our capex to come in at approximately 4% of sales compared to previous guidance of 5% of sales. Adjusted diluted EPS to be in the range of $3.45 to $3.51, which is up approximately 15% and 17% year over year, compared to our previous guidance of $3.40 to $3.56. And free cash flow to now approximately $400 million compared to our previous guidance of above $450 million. The assumptions underpinning this outlook are the following. Firstly, we continue to reflect the impact of tariffs currently in place in conjunction with mitigation initiatives available to us, including pricing and our ability to leverage our flexible business model as a low-cost, vertically integrated manufacturer. The higher tariffs are also embedded in our inventory costs. Furthermore, the outlook continues to reflect growth in key product categories driven by recently introduced innovation, the favorable impact from new program launches and market share gains, and the various incentives from jurisdictions where we operate. We've assumed no share repurchases for the remainder of 2025, as indicated at the time of the announcement of the proposed Hanes Brands acquisition. We've taken into account acquisition-related costs incurred thus far, and we anticipate that our adjusted effective tax rate for 2025 will remain at a similar level to what we saw for the full year in 2024. Finally, we've assumed no meaningful deterioration from the current market conditions, including the pricing and inflationary environment, and the absence of a significant shift in labour conditions or the competitive environment. So in summary, we are pleased with the quarter, and we remain confident in our ability to deliver continued strong financial performance as we look ahead and get ready to welcome Haynes Brands. Thank you, and now I'll turn it over to Jessie.