漢佰 (HBI) 2017 Q3 法說會逐字稿

Good day ladies and gentlemen, and welcome to the HanesBrands Third Quarter 2017 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to hand the floor over to T.C. Robillard, Chief Investor Relations Officer. Please go ahead, sir.

Good day, everyone, and welcome to the HanesBrands 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 2017. 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 Investors 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 are detailed in our various filings with the SEC and 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 as well as our 2017 guidance represent continuing operations and exclude all acquisition and integration-related charges and expenses. Additional information, including a reconciliation of these and other non-GAAP performance measures to GAAP, can be found in today's press release.

Speaking on the call today are Gerald Evans, our Chief Executive Officer; and Rick Moss, our retiring Chief Financial Officer. While not speaking today, we are also joined by Barry Hytinen, who, as you know, recently joined HanesBrands as our Chief Financial Officer. Gerald and Rick will provide some brief remarks and then we will open it up to your questions.

I will now turn the call over to Gerald.

Thank you, T.C.

HanesBrands delivered a solid third quarter performance with revenue and earnings per share right in line with our guidance and cash flow from operations year-to-date, $120 million ahead of last year. While the quarter came together a little differently than we expected, the end result was that we delivered on our guidance, we returned to organic growth, and we generated a significant amount of cash flow.

Our business model has become increasingly diversified as it offers multiple paths for delivering growth and long-term shareholder returns, even with the challenges of the U.S. market. In fact, we saw 3 key points in the quarter that demonstrate our diversified model is working.

First, we continue to generate greater amounts of cash flow. We are recognizing synergies from acquisitions, the associated integration expenses are declining, we're improving our working capital and Project Booster is ramping on schedule. All of this gives us confidence in our ability to deliver at least the midpoint of our cash flow guidance for the year and on our goal of $1 billion run rate as we exit 2019.

Second, we believe we've approached an inflection point in our business where our key growth strategies, specifically online, Champion and International have reached sufficient scale to more than offset the challenges in the U.S. retail market. As expected, we delivered organic growth in the quarter, both as reported and in constant currency. Online sales increased at a high 20% rate with growth across all regions, all channels and all product categories.

Global Champion sales increased 16% in the quarter, which was an acceleration from the high single-digit rate we delivered in the first half. And we saw solid growth in Innerwear sales in Australia and in Latin America.

And the third point demonstrating our diversified model works is that our past acquisitions are delivering incremental benefits. The concept of multi-year synergy contributions from our acquisitions is well-understood. But what I believe is being overlooked is how these acquisitions are helping drive our long-term organic growth as many of these are fast-growing businesses.

Moreover, our acquisitions are diversifying our revenue base both geographically and by product category, allowing us to increasingly leverage our global supply chain operations. With over 30% of our sales outside of the U.S. across more than 90 different countries, we are truly a global company. So let me take a minute to discuss our business performance by global product category.

For the quarter, global Activewear, which represents roughly 40% of our sales, increased 5% over last year, while global Innerwear sales declined roughly 60 basis points. Regionally, we saw similar trends between product categories. International sales were stronger-than-expected, driven by double-digit Champion growth in both Europe and Asia as well as solid growth in Innerwear sales in Australia, Mexico, Brazil and Argentina.

This was partially offset by weaker-than-expected Innerwear and Activewear sales in the U.S., as continued declines in the overall apparel category and poor traffic trends resulted in broad-based weakness at retail during the back-to-school season. Nonetheless, in the quarter, we held share in basics and saw improving POS trends within our bra business at certain key accounts in spite of the challenging market environment.

As I mentioned earlier, we are encouraged that our online Champion and International businesses are now large enough to more than offset these challenges and allowed us to return to organic sales growth in the quarter.

Touching briefly on acquisitions. We announced the purchase of Alternative Apparel in mid-October. This acquisition support our Activewear growth strategy by providing us with another distinctive growth brand and additional channels of distribution. We expect this deal to deliver an after-tax unlevered IRR of at least 20%. Add these returns to the roughly $85 million of remaining acquisition synergies and approximately $100 million of net cost savings from Project Booster, and we believe we are extremely well positioned to deliver profit and cash flow growth over the next several years.

So in summary, all of our efforts and investments over the past several years are delivering their intended results. We have diversified our revenue, we're returning to organic growth, our cash flow is building and Project Booster is ramping. We believe all of this positions us for continued growth in 2018 and beyond.

Before I turn the call over, I'd like to thank Rick for all of his guidance, support and contributions to this organization over the past 12 years. And in particular, his partnership over the past year as I transition to CEO. We wish him the best in his well-deserved retirement.

I'd also like to welcome Barry Hytinen who, as you know, joined us 2 weeks ago as our CFO. Barry brings a breadth of experience and skill sets that match the needs of HanesBrands, and we're very excited he's here.

With that, I'll turn the call over to Rick.

Thanks, Gerald. I've thoroughly enjoyed my time at HanesBrands. It truly is a world-class organization with great brands and an unmatched culture. I'm honored to have had a hand in our successful strategies over the past 12 years from Innovate-to-Elevate to our acquisition and capital allocation strategy to Project Booster.

These strategies have driven significant returns for our shareholders over the past decade through a variety of different end-market environments. More importantly, they've remade HanesBrands to be successful for the next decade, irrespective of the current challenges in the U.S. market. We're investing in areas of growth, which has resulted in a much more diversified revenue base with over 30% of our sales now outside the U.S., roughly 40% of our sales coming from Activewear products and nearly 20% of our sales coming from online and our own retail operations.

Combined, our revenue diversification with visible profit and cash flow drivers, such as our remaining acquisition synergies and Project Booster savings, and we're confident in our ability to further expand our margins and to deliver on our cash flow goal of an annual run rate of $1 billion as we exit 2019.

Now let me speak to our performance during the quarter. Sales increased more than 2% over last year driven by organic growth in the base business and roughly $15 million from acquisition contributions. As expected, gross margin improved over last year increasing 20 basis points to 37.8%, driven by efficiency gains within our supply chain. Operating margin of 15% declined 40 basis points versus last year due primarily to a higher mix of International sales.

Recall, International margins are expected to be temporarily lower as we've yet to recognize full synergies from prior acquisitions. By business, our margins remained strong and this was evident in the year-over-year expansion in all of our segment margins in the quarter.

The tax rate was 2% as a result of higher profit and lower tax jurisdictions and our normal third quarter discrete items related to adjustments of prior year tax returns. And earnings per share of $0.60 was at the midpoint of our guidance range and included a $0.01 per share drag from the impact of hurricanes in the U.S. and the earthquake in Mexico.

Looking at our domestic segments. As Gerald highlighted, we experienced weaker-than-expected market trends within the U.S. And this was apparent in our Innerwear and Activewear segment results. Innerwear sales declined from last year as online sales growth of over 20% was more than offset by pressure within brick-and-mortar. Back-to-school trends broadly across retail channels were softer-than-expected, driven by weak traffic and continued declines in the overall apparel category.

We were certainly disappointed that Innerwear sales did not progress as we were expecting in the quarter as a result of these market pressures. However, we were able to hold share in basics and we saw improving POS trends within our bra business at certain key accounts. Innerwear's operating margin increased 10 basis points over last year as Booster savings more than offset the declining sales volume.

With respect to our Activewear segment, sales increased slightly over last year due to the addition of GTM and double-digit Champion growth in the sporting goods, mid-tier and department store channels. Activewear's operating margin expanded 110 basis points over last year, driven by product mix and Booster savings.

Switching to our International segment. As Gerald also highlighted, sales were much stronger-than-expected in the quarter increasing roughly 14% in constant currency. Sales in Europe increased 7% in constant currency, driven by Champion growth in both the wholesale and retail channels, with particular strength in Germany and the U.K. Within Hanes Europe, sales of our DIM brand increased, while online sales were up double digits.

Sales in Asia increased over 20% in constant currency due to strong Champion growth across all channels in Japan as well as double-digit Champion growth in Korea. Hanes Australasia also delivered strong growth across both wholesale and consumer direct channels.

In Latin America, sales increased over 15% in constant currency, driven by positive Innerwear POS trends in Mexico, the relaunch of Maidenform in Argentina and Innerwear sales in Brazil. Segment operating margin of 13.7% increased 90 basis points over last year, driven by sales growth and acquisition synergies.

With respect to balance sheet and cash flow highlights, inventory declined roughly 3% over last year in Q3, while cash flow from operations year-to-date improved by $123 million. All year, we have built our cash flow at a faster pace than last year through the combination of net income growth and structural improvements in our working capital.

Turning to guidance. We narrowed our full year outlook, so please refer to our press release and FAQ document for the specific details. As we highlighted with our quarterly guidance back in August, our full year sales outlook has been tracking to the low end of our range given the challenging apparel market trends within the U.S.

With respect to EPS, we narrowed our range to reflect increased marketing investments to drive market share, a higher mix of International sales relative to our prior expectations, as well as a $0.02 per share drag from the unexpected impact of the Sears Canada bankruptcy and the natural disasters I referred to earlier.

And lastly, we expect cash flow from operations to be at/or above the midpoint of our guidance range.

So to wrap up, we believe we've approached an inflection point in our business. Our growth initiatives are now large enough to offset current market challenges. You saw this in Q3 as we delivered on our guidance and returned to organic growth. And we believe you'll see this in Q4 as we expect to deliver another quarter of organic revenue growth.

Looking forward, when you add visible profit and cash flow drivers to this revenue inflection, we believe we're very well positioned to drive strong shareholder returns for the next several years.

And with that, I'll turn the call back over to T.C.

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

(Operator Instructions) Our first question comes from the line of Eric Tracy with Buckingham Research.

Rick, all the best to you, and welcome, Barry. If I could, Gerald, was hoping you could speak to some of the assumptions for the 4Q guide. It looks like organic rev is expected to accelerate a bit, at least at the midpoint, just up north of 2% at the low end, close to 4% at the high end.

I know you're lapping the destocking from last year. It looks like FX is going to contribute about 1 point. But just given the challenges, back-to-school, maybe provide a bit more color on your assumptions around domestic wholesale for holiday, would be great.

Yes, absolutely. And first and foremost, we do expect to continue to see organic growth in Q4 and actually building upon what we saw in Q3. And I think, certainly, you saw the power of our diverse model through our online growth in the high 20% growth range again, as well as our Champion growth in the 16% range in International coming in at 14% on constant currency.

As you noted, as we look to the fourth quarter, we've guided all year cautiously in regard to the U.S. businesses as to how we would expect it to play out. And we haven't anticipated the typical retail builds that we would have seen as we move toward holiday period. We do overlap, though, a destocking that we went through last year, and so year-on-year, we do expect to see an increase as we overlap that destock inspite [despite] of not assuming the retail holiday builds that will give us some growth in the U.S. business as well and contributes to that total organic growth in the period.

And while some of that -- the biggest weeks are still ahead of us, we're encouraged that we're in the right track. We see that October is actually beginning to play out nicely and normalize in the U.S., which gives us further confidence in our guidance for the period. You were correct in noting that there is some FX, and it's about 1 point of that guidance as well.

But when we see all these trends coming together and the fact that we've got added marketing support behind the business, much of that in the U.S. market and much of that behind our innovation platforms like Fresh IQ, we feel good about the guidance and the further acceleration.

And then if I could just follow up. I mean, clearly, the model is becoming more diversified with International and digital. Maybe just speak, you said it scaled to the point where it now is able to offset. But maybe just speak to the investments that still need to be made, maybe talk to us a little bit about International, when that potentially leverages and becomes incrementally accretive?

Well, we see it leveraging now from the standpoint of its growth, and several of our acquisitions, while we've always talked about them more from a cost synergy justification, several of those acquisitions on the International side are actually fast-growth businesses as well. Certainly, the Australia as well as the Champion Europe businesses were faster growth than our domestic businesses and grow it -- both that grow at mid single-digit kind of growth rates.

And you certainly see that coming through on the International side, as well as our Asia businesses continue to deliver nice strong growth and a lot of that's coming out of our global Champion initiative as that intersects with our international expansions. So we are seeing that scale, and we now have platforms in most of the key geographies to build upon. And so we think we can scale that further as we build out with our acquisition strategy.

Our next question comes from the line of Susan Anderson with B. Riley FBR.

Best wishes to you, Rick, also. I guess, first I wanted to touch on the Innerwear category. Did you say it's both men's and women's were down in the quarter? And then maybe give some color on how the FreshIQ is selling units up, hoping to drive sales? And also, the market share, I believe, does held it. Does that include online?

You're breaking up a little bit. I think I got most of the questions, so let me start. You asked about the Innerwear category and the domestic Innerwear category and how it played out. And frankly, let me just take you up a little higher, first of all, to the standpoint that we saw weak results across U.S. brick-and-mortar period from the standpoint of retail performance, and I mean the industry, it weighed on the total apparel category as it was weak across all channels. And apparel category in total was actually in decline in the quarter, and this is the back-to-school quarter, so it's a big apparel category quarter from that standpoint.

That weighed on our categories as well and we saw declines in our Innerwear business. And it wasn't to one gender or the other, it weighed as a result of total traffic. So we saw it fall that way. We do -- did continue to see our shares hold in our basics categories, for example, which is one of the areas you were pointing to with your question, and I do believe some of that's related to our Fresh IQ and initiatives behind that as well.

We also saw that the inventories as we exited the quarter were in good shape, and as I noted in my prior comments, we see as we're getting into October that things are normalizing, and we believe that's a good sign as we begin to put our marketing efforts behind it, that we'll see -- continue to see positive trends, particularly as we overlap that destocking that we experienced in the fourth quarter last year.

Great. That sounds good. And just one follow-up on the Activewear side. How do you guys see the growth for Champion and C9 kind of as we look out. I think there's some concern out there that it could be impacted by Nanjing [and armor] Nike and Under Armour promoting so much. Have you seen any impact, you believe? And how should we think about what you're expecting for growth in the U.S. going forward?

Yes. Let me -- I'll start with that as a global question, then I'll bring it down to the domestic market, because I think, first of all, on a global basis, our global Activewear business was up 5% in the quarter; and as you heard earlier, our Champion business globally was up $16 million, really driving it. And so we're bullish on the Activewear category globally. We see very solid growth in the category, and we see a lot of potential as we look even to the fourth quarter.

Specific to the domestic market, our core Champion business was up 20% in our sporting-goods and department store mid-tiers. We now have the TSA bankruptcy behind us and we saw nice growth in our sports license apparel business as well. We did experience some headwinds in the mass channel as we saw the total apparel category experience some headwinds in the quarter.

But as we look now towards the fourth quarter, we anticipate sequentially improving organic trends driven by Champion in our sports apparel business. And on a global basis, we expect the kind of growth we've seen or better as we look to Q4. So we see very positive trends globally as well as in our domestic Champion business that will be then complemented by our recent acquisition of Alternative Apparel in the U.S. market.

And our next question comes from the line of Andrew Burns with D. A. Davidson.

Just a follow-up on the Champion, congratulations on the acceleration in the quarter there. And as referenced earlier, given all the negative news flow here in the U.S., could you spend a little more time about what those Champion and what those Activewear International growth opportunities are, whether it's more SKUs, broader distribution? And what's the long-term picture look like there?

Sure, Andrew. Andrew, from the standpoint of Champion, I think you know this story, but we've not only been driving it domestically, but as part of our acquisition strategy, we've actually reassembled the brand globally or assembled the brand globally for the first time in some period of time. So as we've done that, it's given us a broad group of geographies to build the business in. And so we're driving it now globally.

We have a lot of opportunity in Europe, and we're driving in Europe both through the Italian business that we purchased but also up in the Northern Europe. We're seeing positive trends across Asia as we now push it up in the Southeast Asia as well as develop it in Japan and even now some into China. And then the domestic business is there's potential to continue to develop it in the sporting goods channel, as well as in the department and mid-tier channel, and we've got a very solid mass business as well. So it's a geography as well as additional distribution in our core channels.

And then a question on the incremental marketing investments in the fourth quarter. Can you speak about the timing and the opportunity you see as well as the focus primarily on U.S. Innerwear, which is sort of a tough category where you're maintaining share versus putting those incremental dollars into growing categories globally?

Sure. The increase in media was on a global basis, what I -- and marketing sport was on a global basis. What I mentioned is a large share of it was in the U.S. market, and so we are investing in other businesses outside of the U.S. as well. But we see the clear opportunity to invest behind our innovations as well as to work with some of our customers in our core intimates business as we overlap some challenges to drive business there as well. And so we're taking that opportunity to drive that business to drive organic growth within Q4, but also position us for growth in 2018 and beyond.

Our next question comes from the line of Kate McShane with Citi Research.

I had a question with regards to marketing, too. Just in the context of the weaker back-to-school. How much do you think of that was really just general macro brick-and-mortar trends versus maybe a lower level of support for the brand during the quarter?

Oh, I think it was macro trends. When you look at the total apparel category being down and the fact that it was down across multiple channels suggest you've got a macro trend going on. And it's for that reasons we see as we come out of that and investing behind our brands. And frankly, we held share in that sort of macro trend pressure, that we've got a real opportunity to drive our brands.

Great. And if I could ask one unrelated question. How much of the online business now is direct-to-consumer and Amazon versus your brick-and-mortar partner online business?

Well, what we've seen within -- in the quarter, and we've seen it for some time, is our online business is growing very rapidly globally, as I've mentioned. We've talked about this for some time. It's effectively a $600 million business for us on an annualized basis, and it's growing in the high-20s rate -- 20% rate around the world. So we've nice growing business. And it's actually not only growing across all geographies in all categories, but it's growing across all channels within the online space. So we see similar growth trends now evolving both in our own sites as well as our pure-plays and are brick-and-mortar. So it's a nice balanced business that is growing very well unilaterally.

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

First question, just wanted to touch on the cost side of the business. So on one hand, we know you have Booster which you've talked about driving, I think $100 million of net savings over the next 2 years. And now today, you're talking about reinvesting some incremental dollars back into marketing and demand creation. So I guess, my question is how should we marry those 2 things against one of the cost saves versus the need to drive top line and drive marketing dollars higher?

This is Gerald. Let me take that. Booster, we always said it was about unleashing the full revenue and cash flow potential of the company, and there was certainly a cost reduction piece of that. But we also said we were going to invest a portion of that back in the business to drive our key initiatives.

Some of those were online, some of those were getting behind our brands and our key innovation and so forth. And I think you can -- and as Rick stated in prior calls, he also stated that we would likely step up our investment faster than we would drive the savings, one would mature faster than the other. We saw the opportunity as we came into Q4 to move a little faster with our investment, and so we've taken that step to help drive our business.

Got it, thanks, Gerald. That's helpful. Just a follow-up question. Just was curious, Gerald, if you could talk about just domestic pricing within Innerwear at a high level. Are you seeing anything from a competitive backdrop that signals to you that any of your peers are looking to take prices down in order to take any market share? Just any color there. I'm curious how you're thinking about that.

Well actually, from the pricing standpoint, of course, it's early in the holiday season yet. But from what we've seen, pricing's been fairly stable. In the core categories, this is a period of time where you do have some promotion activity around the holiday period, and certainly, we'll be engaged in some of that, but nothing out of the ordinary.

Our next question comes from the line of Omar Saad with Evercore.

Just wanted to dive in a little bit more, if you could, on the Innerwear results. I know back-to-school, it sounds like the traffic was a little bit sluggish there. Are you seeing the same weather effect that you've seen in the past where the kind of a sell-through trends tend to be pretty sensitive to that? Any update on retailer destocking trends and how you're thinking about that going into next year, if that will still be a drag? Any other kind of context you can put around the U.S. -- the Innerwear number, which I know is affected by the U.S. most?

Well, no, I think when you see Innerwear, Omar, it's really a function of the other retail weakness and so forth, that we experienced as a category, frankly. It was the primary driver. Certainly from a true weather standpoint, that category is generally less sensitive to weather. Though at quarter end, on top of a weak period, we certainly encountered the impact of the hurricanes and so forth that did impact our total U.S. business. But no generally, it was more just the weakness in the apparel category.

Got you. And then I mean, are you seeing -- do you see similar kind of the dynamics going on with the e-commerce piece? Or is it a totally different dynamic in how consumers are buying the category online?

From the standpoint of growth, certainly online, we saw very solid performance on the online -- in the online space. And as we stated earlier, we continued to see high 20% kind of growth, which is a growth rate far faster than the apparel categories growing online in the U.S., for example. So we continue to hold leading shares, we continue -- we believe to consolidate our shares, and I think our efforts are really paying off in helping offset some of the challenges in brick and mortar.

And our next question comes from the line of Chethan Mallela with Barclays.

So you have a 1% to 2% long-term organic growth target. Can you just provide a sense of the time frame you're thinking about for achieving that level of growth on a consistent basis and how you think about Innerwear, Activewear and International in the context of that goal?

Well, from the standpoint of our guidance, I think that clearly, as you look to the fourth quarter, we'd be in that 2%-plus organic growth range as you look in Q4, even without the FX. So I think you're seeing that we're guiding in that direction. Now it's being driven more in the near term from our strength in International as well as our success online.

As we begin to see the settling out of the U.S. retail challenges, I believe that you'll begin to see it in our more and more stability out of our U.S. Innerwear business, as well it really will continue to cement that 1% to 2%, and hopefully, move us to the higher end of that range over time.

Great. And just a quick follow-up on back-to-school. Did you see the expected benefit from shipment timing in the quarter and that was just overwhelmed by the other factors? Or was part of the underperformance that you didn't see those shipments come through as expected?

I think it's a fair question. With the challenge in the market, the way we experienced it, we did not see the added benefit of that come in the quarter as we had expected.

Our next question comes from the line of Tiffany Kanaga with Deutsche Bank.

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

This is May on for Carla. Just wondering, checking in on the state of Champion growth and how that's kind of going. And any increased distribution opportunity you guys see there?

Yes, we're really excited about Champion, and the key driver in our global Activewear growth is the strong Champion growth, and we're seeing 16% growth globally in the quarter, very solid growth within our core Champion business in the U.S. as well, and it's one of our expected key growth drivers going forward, so we're very bullish on that business. We think we're really just getting started on driving that brand where it truly can be.

Got it. And just given the recent transactions, is there any update on leverage or target related to that, that you guys have?

So this is Rick.

(technical difficulty)

Please stand by. (Operator Instructions)

And you may resume.

So this is Rick again. As we were saying, since we did our acquisitions last summer, we've been steadily deleveraging our balance sheet. On a net debt-to-EBITDA basis by the end of the year, we should be around 3x. When you look at that compared to our -- the capacity we have under our credit agreements, we look to be able to do up to like $1 billion in acquisitions.

But also note that we ended the quarter with $400 million on our balance sheet. And so between that and the cash flow that build that we're experiencing right now, we feel like we have plenty of capacity to do acquisitions as we -- as they come up.

And we'll try Tiffany Kanaga from Deutsche Bank again.

I know you touched on it, but can you provide some incremental and more specific color around what's driving the outperformance in International beyond your expectations such as in terms of some examples of brands or products that are working exceptionally well? And where do you see the most runway to extend the growth in terms of specific regions, brands or categories?

Sure. And there's a couple elements to that answer. First of all, when we look across the International business in total, it was up 14% in the quarter on constant currency. There's very solid growth coming out of the global Champion initiative, and much of that is coming from our strong performance in our Champion Europe business, as well as very strong business in Asia that's being driven by our Champion expansion as well. And we see a lot more runway there to your question, to expand even further.

On the Innerwear side, we saw very solid results in Australia, which is our acquisition. It's 1 year old and it's doing very well. It was a higher growth business when we bought it and a mid single-digit kind of growth rate, and they're continuing to perform as they're a combination of driving their own direct-to-consumer business, both through their own stores and online and the wholesale business. It's a very nice growth model.

And then Latin America, we see nice, solid performance behind our Innerwear businesses across those regions as well. And we've got opportunity to do like both expand from a share position but also into adjacent categories in Latin America. So you see, we've got a nice balance of Activewear expansion in key markets as well as we've some nice growth coming out of Innerwear in some of other markets that have come through a combination of -- well, largely through acquisitions tied to some of our original International businesses in Latin America.

And that concludes our question-and-answer session for today. I'd like to turn the floor back over to HanesBrands for any closing comments.

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

Ladies and gentlemen, thank you for participation in today's conference. This does conclude the program, and you may now disconnect. Everyone, have a good day.