Hanesbrands Inc. Price & Performance (HBI)

We are pleased to be here today to provide an update on our progress after the fourth quarter of twenty twenty four. Hopefully, everyone has had a chance to review the news release we issued earlier today. As a quick housekeeping item, beginning with fourth quarter results, we have reclassified the Champion Japan business to discontinued operations. Recall when we announced the sale of our Global Champion business in June 2024, we said we would be a licensee of the Champion Japan business for a temporary period of time and that we would eventually move the business to discontinued operations. In the fourth quarter, we notified Authentic Brands of our plans to exit the license by the end of twenty twenty five. The Champion Japan business moving to discontinued operations was not contemplated in our initial fourth quarter guidance back on November 7. Therefore, fourth quarter and full year results as well as our 2025 guidance continuing operations are not directly comparable to our previous guidance or to current consensus estimates. In addition to our earnings release and FAQ document, we have provided two additional documents today. One is a supplemental financial packet with recast historical financials reflecting Champion Japan and discontinued operations.

The other is an earnings handout that provides a bridge from fourth quarter and full year results to our prior guidance as well as an updated overview of the go forward business. All documents as well as the replay of this call can be found in the Investors section of our Hainescom 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, 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 operations.

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 Bratzkes, 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, T. C. Good morning, everyone, and welcome to our fourth quarter earnings [indiscernible] Haines brands delivered strong results for the quarter and the full year across across all of our key metrics. Including our sales, margins EPS, operating cash flow and debt reduction. Coming into 2024, we said that despite the muted consumer environment, our sales trends would improve throughout the year. And that we had reached an inflection point in our margins and our leverage. We delivered on this expectation And as a result, we are entering 2025 with a strong foundation clear direction and good momentum to create shareholder value. Some highlights for the year. Sales trends improved each quarter with the fourth quarter pivoting to year over year growth of 4%.

Gross margin improved five eighty basis points over prior year, to 41.4%. Which is structurally higher than pre pandemic levels due to permanent cost savings initiatives and improved assortment management. Operating margin expanded three ninety basis points to 11.8% while supporting a 150 basis point increase in brand investment. Earnings per share increased 670%. And we paid down over $1,000,000,000 of debt and reduced leverage by nearly two turns. These results reflect the successful execution of our strategy over the past four years, streamline and reposition Haines HanesBrands even while facing a challenging consumer environment and a number of additional unexpected headwinds. We shifted from a global holding company a global operating company. Where we leverage and share our brands, innovation, marketing, talent and supply chain capabilities around the world. We substantially focused our portfolio and simplified our business. We're now a consumer centric company with both a reignited interwear business that is gaining market share and an added focus on new revenue streams. We built core competencies and a disciplined operating model with consumer led innovation, SKU lifecycle management and the application of advanced analytics and AI. We streamlined and strategically segmented our global supply chain and expanded our e com capabilities.

And we built our talent and associate proposition all while implementing cost reduction initiatives to improve efficiencies, lower our fixed costs and allow for higher levels of growth related investments. As I previously highlighted, the benefits of the organization's collective efforts over the past four years began to show in our 2024 results. I want to thank all of our associates for delivering on a strong year and for their hard work to successfully reposition Tane's brands for the future. We enter 2025 as a new company. A more simplified focused business with a powerful asset base, significant competitive advantages and multiple levers to create shareholder value over the next several years. We're a global powerhouse in innerwear and basic apparel. Operating in a brand driven category that is core and essential to consumers. We own market leading brands including Hanes, [indiscernible] Our brands are synonymous with comfort and quality. And have been trusted by consumers for generations. We have a proven and repeatable consumer centric innovation process that is driving market share gains.

Retail space expansion and is attracting younger consumers to our brand franchises. We have global go to market capabilities as well as distribution breadth and scale. Enabling us to capture demand wherever the consumer wants to shop. And we have an advantage supply chain, with a world class owned manufacturing network and diversified global sourcing [indiscernible] Going forward, we expect to further leverage our competitive strengths and generate consistent top line growth. Expand margins to over 15% and generate more than $400,000,000 a year of operating cash flow. Looking to 2025, we believe we're well positioned to make significant We will build on fourth quarter's momentum and expect to deliver positive organic constant currency sales growth for the year. Driven by new innovations, Distribution gains in key channels contributions from new revenue streams and market share opportunities within the printwear channel as we celebrate and leverage fiftieth anniversary of the Hanes BPT. As we continue to improve our cost structure, particularly within SG and A, we expect further margin expansions this year while maintaining high levels of growth related investments. This magnifies our growth rates as we move down the P and L. Driving operating profit growth of 10%, EPS growth of more than 30% and operating cash flow of $350,000,000 And we will remain focused on using all of our free cash flow to pay down debt and further reduce balance sheet leverage.

The combination of profit growth and debt pay down is expected to bring our leverage down to around three times by the end of twenty twenty five. So in closing, we're seeing the benefits of our transformation strategy we delivered strong results for the quarter and the year. We commit to 2025 as a new and better company. Well positioned to build upon our competitive advantages and drive increased shareholder returns, sales growth further margin expansion, strong cash generation and continued debt pay down. Before I turn the call over, I want to touch on a leadership succession plan we announced this morning. [indiscernible] We have reached a positive and important inflection point in ex Looking ahead to the company's next growth phase, as a Board, we believe now is the right time to begin to search to identify the next leader who will build upon our transformation work and continue the company's momentum. We have a remarkable team at HanesBrands, and it's an honor to work alongside them. Over the last five years, the team has done an extraordinary job of streamlining and repositioning Hanes HanesBrands all while navigating a number of extremely challenging environment.

Today, We're a leaner, healthier company. With a much stronger foundation We're more focused having successfully transformed our portfolio and how we operate around the world. We're more profitable, generating consistent cash flow and we strengthened our balance sheet. I'm proud of the actions we've taken, what this organization has achieved together and how HanesBrands is positioned for the future. We're in a very fortunate position a great window of opportunity for a smooth transition. I'm fully engaged and focused on continuing to lead the team in delivering a strong 20 I look forward to working with the Board And with that, I'll turn the call over to Scott. Thanks, Steve. On a personal note, on behalf of HanesBrands, I want to express our appreciation for your leadership and all that we've accomplished over the past five years to transform the business and position the company for the future I look forward to continue to work together to drive our strategy to deliver a strong 2025. Also, let me add my thanks to the global HanesBrands team. Their continued dedication and commitment drove strong and improving operating and financial performance over the course of 2024. With a simplified and strengthened business model, we believe we're well positioned to generate strong shareholder returns over the next several years through a combination of double digit earnings growth and debt reduction, in the longer term returning capital to shareholders.

Before I speak to the quarter's results, a quick housekeeping item regarding Champion Japan. Recall, when we announced the Champion sale, said we'll be a licensee for the Champion Japan business for a temporary period of time. And eventually move the business to discontinued operations. In the fourth quarter, we notified Authentic Brands of our plans to exit the Champion Japan license by the end of twenty twenty five. [indiscernible] As a result, beginning with fourth quarter's results, we Champion Japan business has been reclassified to discontinued operations. Which was not contemplated in our previous guidance. Therefore, fourth quarter and full year results well as our 2025 guidance are not directly comparable to our prior guidance or the current consensus estimates. We provided an earnings handout that bridges our fourth quarter and full year results to our prior guidance. We also provided a supplemental financial packet that includes recast historical financials. Both documents are posted on our Investor Relations website. For today's call, I'll focus on continued operations. Overall, we delivered strong fourth quarter results that were above our outlook across all of our key metrics. Net sales increased nearly 4% on an organic constant currency basis. Operating profit increased 33% over prior year EPS increased 240% and leverage declined by nearly two turns on a net debt to adjusted EBITDA basis.

Turning to the details of the quarter, net sales on a reported basis increased 4.5% over prior year, to $888,000,000 The year over year growth reflects 175 basis point benefit from transition services revenue and 110 basis points headwind from foreign exchange rates. Looking at our segments, in The U. S, net sales increased 3% over last year. Ahead of our outlook. Despite the challenging environment, our strategy is working we're winning in the marketplace. Innovation, increased brand investments, incremental holiday programming and performance in the online channel helped drive growth in the quarter. Particularly within our socks, women's and scrub businesses. In our International segment, net sales increased 6% over prior year on a [indiscernible] with growth in each region With respect to our Australia business, growth in the quarter was driven by better end stocks within our own retail. Effective assortment management and strong bonds innovation. Touching briefly on our other segment, the year over year increase in net sales were driven by short term transition service agreements related to the sale of our Champion business. We expect these agreements to wind down over the course of 2025.

We've excluded these sales from our organic constant currency growth calculation. Turning to margins. We saw continued year over year expansion in both our gross and operating margins, as cost savings initiatives are flowing through and we continue to see a year over year benefit from input costs as we anniversary the impact from feed inflation. Our cost savings and assortment management initiatives are driving structurally higher and sustainable margins. While supporting increased brand investment. For the quarter, gross margin increased 400 basis points over prior year. To 44.1% and our operating margin increased 300 basis points to 14.2%. [indiscernible] our visibility to input cost and our cost savings initiatives, we're confident we can deliver year over year expansion in both our gross and operating margins in 2025. And with respect to earnings per share, EPS increased 240% over last year to $0.17 The growth was driven by the combination of higher profit margins, and a $7,000,000 reduction in interest expense as we continue to pay down debt. Turning to cash flow and the balance sheet. With better than expected profit performance, Lower cash interest and disciplined working capital management we generated $264,000,000 of cash flow from operations for the year which exceeded our outlook.

We also further strengthened our balance sheet with the combination of the net proceeds from the Champion sale and strong cash generation we paid down over $1,000,000,000 of debt Leverage at the end of twenty twenty four was 3.4 times on a net debt to adjusted EBITDA basis. Which was nearly two turns lower than the end of twenty twenty three. And now turning to guidance. All my comments were referred to adjusted results from continuing operations, and will be based on the midpoint of our guidance ranges. We believe we're well positioned to deliver positive sales growth on our organic cost of currency basis along with solid operating profit and EPS growth for the year despite a continued muted consumer environment. We expect further improvement in both our gross and operating margins for the year given the input cost visibility we have on the balance sheet our cost savings initiatives, Our outlook also assumes that we refinanced all of our 2026 maturities in the first quarter of twenty twenty five. With respect to the current situation regarding tariffs, which China, Mexico and Canada, we did not expect a material impact on our cost. Products from China to The U. S. Represents the lowest single digit percent of our U. S. Cost of goods sold.

Therefore, the recent incremental tariff does not materially impact our input costs and is factored into our guidance. With respect to Canada and Mexico, we do not source or manufacture any products for The U. S. From either of those countries. Looking at our full year, we expect net sales of approximately $3,500,000,000 represents approximately 1% growth on organic constant currency basis. We expect operating profit to increase approximately 10% operating margin to expand approximately 125 basis points to 13.1 and EPS to increase more than 30% over prior year. And we expect to generate approximately $350,000,000 of operating cash flow for the year. Turning to the first quarter, our outlook assumes net sales increased 1% to a On an organic constant currency basis, we expect net sales to be consistent with prior year. Expect operating profit to increase nearly 30% over prior year and operating margin to expand approximately 190 basis points.

And we expect EPS of approximately $0.02 as compared to a loss of $0.05 last year. So in closing, I'd like to echo Steve's comment. We delivered strong results for the quarter and the year we're seeing the benefits of our transformation strategy. We came into 2025 as a new and better company. Well positioned to build upon our competitive advantages and drive increased shareholder returns, through sales growth, further margin expansion, strong cash generation a continued commitment to pay down debt. And with that, I'll turn the call over to C. C. Thanks, Scott. That concludes our prepared remarks. We'll now begin taking your questions and we'll continue as time allows. I'll turn the call back over to the operator to begin the question and answer session. Operator? Our first question comes from the line of Paul Kerny with Barclays. Good morning. Thanks for taking our question.

Can you talk about the degree of confidence in the company's ability to drive positive sales in '25? And what are some of the revenue opportunities behind this? And also can you expand on the visibility and control into the drivers of future margin expansion, both for this year and eventually to the 15% target?

Sure. Thanks for the question. I'll start with the revenue one, Scott, and then I'll let you talk about the margin. We're very confident in our ability to pivot to that 1% organic constant currency growth for the year. That's it. Still challenging environment out there. But as I look at where we're positioned, the momentum we have coming out of Q4, the innovation that we have, the brand investment that we have planned, the space that we've already gained permanently with some of our key retail partners. I think we have a lot of momentum I think the consumer is responding to our innovation and continues to choose the brand and you can see that through the market share gains that we've continued to get. So we feel good about our core business. We're also starting to expand a little bit into what we're calling kind of new revenue streams. You've heard us talk about our scrubs business before. I'm encouraged about the work that's being done in our Haynes apparel sector.

So that's some fleece product, sleepwear product, our printwear business, we mentioned that fiftieth anniversary lot of momentum behind this business with new innovation that's coming and we feel good about the opportunity that pivot to a full year of growth for this company.

Good morning, Paul, and thanks for your question. So on margins, let me first say we're just really pleased with performance in 2024 on our overall operating margins. They were up 400 basis points in 2024 We finished the year with gross margin of over 44%. So team did a fantastic job of delivering. And it really shows you the power of the business model that we're running through. As you look to 2025, we're looking for another step up in our operating margins. Our guide at the midpoint has us up another 125 basis points in operating margins. About 20 to 30 basis points of that's coming from gross margin. So you're going to see incremental benefits from cost savings, from SKU mix. We're now in that low 40% gross margin range that we talked about. So we're really delivering well on gross margin. As you look to the on the SG and A side, which is actually the bigger driver of the margin expansion for operating margin. Is going to be up about, we'll SG and A is going to be down about 100 basis points, so delivering at 100 basis points of margin uplift for the year.

There you're going to see kind of the annualized run rate effect of the prior year actions that we took and the incremental actions that we're taking in 2025. And these savings more than offset the incremental investments that we have with technology and on the people side. And then just one point too on for 2025. Talked about this before on the brand spend. 2024 already had at a spend rate of 5% of sales. So we took that investment rate up in 2024. We feel like that 5% is a good run rate. It fully supports our brands, the innovation of pipeline, So we feel really good about that. So you're not looking at an incremental headwind from brand spend in $25,000,000 So you're going to see that purely hitting the operating margin. And then to your last point, what we saw in 2024, what we expect in 2025, we have a lot of confidence and great visibility to cost and the savings. We see 25% is another big step in our journey to 15% plus op margins. And we can get there over time. So we feel really good about that.

Great. Thank you.

Our next question comes from Aditya Kulkarni with UBS. Great. Hi. This is Itchio Kokarni on behalf of J. S. Holt.

Thanks for taking my question. So this is a question for you, Steve. The announcement of your planned departure was a bit of a surprise to us. Could you just talk a little about your decision to step down and whether this was always part of your plan. And I have a quick follow-up.

Sure. Thanks, Aditya, for the question. There's not a ton more to add versus what we said, but maybe I can give you a little more context. I think what's really important is that feel that we're transparent about these plans and ensure stakeholders that we're beginning this transition from a really strong position, a position of strength. I'm coming up on my fifth year anniversary of joining this great company. And as a Board, we're looking out as we should be for what is the next five year phase of this business look like.

We've reached a positive and important point in our strategy. We have a clear long range plan.

And this naturally brought up these discussions. So as a Board, we believe now is the right time to implement our succession plan And we're in a fortunate position. The company has strong foundation, more focused, more profitable, we're generating consistent cash flow again. We're well positioned for sustainable growth, as I talked about a few minutes ago. And we've built a great leadership team. So it's really that simple. There's no issues with business, the strategy, the Board and I are in lockstep over succession. And when you're looking at all these factors, we have a great window of opportunity for a smooth transition. But I wanted to note and make no mistake, I am fully engaged and will continue to help drive this team and the business to deliver it strong growth and really great profitability in 2025. And obviously, I'll work closely with the Board and help identify my successor.

Understood. That's very clear. Thanks. And then just switching gears a little bit.

Could you talk a little about where you guys are with eliminating the stranded costs associated with Champion? And how much runway you have left on that front? Thank you.

Sorry, you broke up just at the very end. We heard how far we are on eliminating stranded costs from Champion, but the last part broke up if you could repeat it. Yes. And just how much runway you have left Yes.

So on the stranded costs, one of the things touched on this a little bit earlier, We are very focused on not just eliminating Champion stranded costs, We use we took the opportunity with the Champion transaction broadly to step back and really look at our overall cost structure. And so we've took a lot of cost out in 2024 and we actually accelerated a lot of the actions into 2024. So you saw again that margin increase last year, so largely attributable to the actions that we took and the pace we're working through that on. As far as the stranded cost and other actions, we're going to essentially be complete with that this year. And so you're going to see again big part of the margin expansion of 125 basis points is getting those And then as you go forward, you're going to see the full run rate effect of that as you look beyond 2025 and that's how you get to that 15% plus margin every time. Our next question comes from Paul Lejuez with Citi.

Hey, thanks guys. Curious if you could talk about the guidance for F-twenty five and how it breaks down in terms of what you're looking for in The U. S. Business versus [indiscernible] And within The U. S, if you can maybe talk about any changes in ordering patterns, sell through patterns from some of your bigger mass accounts versus [indiscernible] what channel do you expect to be the strongest and weakest in F-twenty five? And then last, just curious on gross margin, if you could talk about the cadence maybe on a quarterly basis throughout the year if we should think about it as consistent or is it going to be stronger upfront, weaker in the back or vice versa? Sure. Let me start, Scott, let you handle the margin. On a top line for guide, as we said, we expect about 1% growth year over year on a constant currency basis. That works out roughly in The U. S. Segment to be essentially flat for the year. International on a constant currency basis will be up low single digit. And then in our other segment, we do have that about $45,000,000 but that's not in in that 1% growth.

Regarding The channels that you talked about, no major shifts in ordering patterns that we've seen going forward and don't necessarily anticipate them. Obviously, there's some disruption out there and some channels are doing better than others right now and some customers are doing better than others. But we're working really hard with all of them. They're all important to us. And we are expect to continue to drive growth in where we're strong. I think we're well positioned with the winners. That'll play out over time, but where you would expect to see strong growth over the years, we're well positioned there and continue to see that growth. There's also been a lot of change in leadership at many of our retail partners and we're working very closely with them as they build out new plans and look for new ways to improve their business Our retail relationships today are probably as good, if not better than they've ever been. So we're very close and continue to adapt to the needs out there for different retailers.

And on question on the margin, so for the full year, like I mentioned earlier, gross margin will be up around 20 to 30 basis points In the first quarter, we were expecting gross margin to be around 41.3% which is up about 125 basis points year over year Now we're not guiding each quarter within the year just a little more color as you think about setting your model together think in the first half, you should expect a little more margin increase year over year. You're going to have couple of things play out within gross margin. The first part is input cost. We're seeing Input costs are stabilizing. Overall, but we're going to see some some tailwind benefit in the first half not so much in the back half and then foot cost. And then also from a cost saving standpoint, like I mentioned earlier, we accelerated a lot of actions. So you're seeing that benefit earlier You're going to see the year over year benefit slow down a little bit mostly in the back half, but those two factors as you think about the margin cadence you should think about from a gross margin standpoint.

I would say operating margin, you should expect a year over year margin uplift the year over year increase in each quarter for operating margin. Again, a big driver of that's going to be the SG and A cost reductions.

Got it. Thank you and good luck.

Our next question comes from Ike Boruchow with Wells Fargo.

Hey, good morning, everybody. Let me I have two questions. One, I'll piggyback off of Paul's. Just on the gross margin, I guess Scott, is that just so up 25 in the in Q1, up 20 to 30 for the year. So you're baking it down in the back half. Is there Is there is that conservatism or is there something on the cost side that kind of Yes, good question. So as you think about gross margin, there's probably a little bit of conservatism in our gross margin outlook. We've talked about this before. We have really good visibility to our costs, so we kind of know what to expect from input costs, to cost savings during the year. There's a little bit of conservatism, but I would say as you look out, Again, all the actions that we're taking really accelerated a lot of that margin improvement year over year. You saw a lot of that in 2024 more than we in And then in this year in the first half, we're seeing that play out. And it's going to stabilize bit more year over year as far as as you look about this the comparison of year over year margin for the And the other thing I would just add is, Q4 is a big comp.

With that 44.1%, which is we're really proud of that number and really glad we hit it, but that's a big comp. So that kind of adjusts your numbers as you go through the year. Got it. Fair enough. Okay. And then just a follow-up, I want to make sure I understand the cash flow build for the year. So I guess my question is, so when I look at it, you're guiding $350,000,000 in operating cash flow. If I my rough math, if I just add the net income and the D and A, I'm getting something closer to $250,000,000 So I kind of have to assume there's some working capital benefits happening there. Can you just maybe Scott talk about what those might be a follow-up to that is can you comment in that number, are you baking in further benefits from the securitization of receivables that you were doing last year into this year? And you quantify that? I'm just trying to make sure I understand all the line items and moving pieces with cash flow for the year.

Yes, definitely a great question on the cash flow. Again just like the margin felt very good and very pleased with the results and 2024. Coming in at $264,000,000 And maybe the best way, Ike, to talk about this is I'll bridge you from what we saw in 2024, there were some some puts and takes in there and bridge you there. I'd help frame it up better for you. So starting with the $2.64, what you're going to see is on the increases, you're going to see profit growth we're going to have operating profit growth, I mentioned 125 basis points. That's a little over $40,000,000 of profit year over year growth Also factoring in is the lower cash interest We have lower cash interest in '25 versus '24 around $60,000,000 So there's another piece to consider as you look at year over year And then also in 2024, there was about net about $75,000,000 of of non recurring transactional deal costs like with the Champion transaction a lot of these restructuring actions that were cash. Those are non recurring to that level. And so those are not we'll be repeating at that level. So you factor all that in, you really get a lot more upside than what you're looking for in the calculation that you did.

The other couple of things to think about and consider is we saw a lot of working capital benefit in 2024 A lot of that was tied to the Champion transaction as we were harvesting cash and working capital to drive the benefit they are getting cash ahead of those transactions. We had about $150,000,000 in total working capital benefit last year. A lot of that was attributable to the Champion of harvesting of cash. You're not going to see that level You are going to see a benefit in working capital Inventory AR, AP is all going to be contributing to working capital benefit. This year, just not to the same level that you saw in 2024. And you have other [indiscernible] really good shape with that. From a receivables financing standpoint, it did take and do some incremental actions in the last couple of years really anticipating any incremental benefits from receivable financing this year on top of what [indiscernible] 2024 Got it. Very helpful. Thanks.

Our next question comes from Jim Duffy with Stifel. Hi.

This is Peter McGoldrick on for Jim. Thanks for taking our question. I was curious as you build to the low single digit international revenue outlook, on constant currency basis. Can you talk to your ex expectations for volume [indiscernible] classify the inventory position, it sounds like there was some channel fill in Australia in the quarter. How does that all fit into your top line growth outlook?

Sure. So let me talk about Australia first, which is obviously the biggest part of that international segment. No inventory fill in the channel. So it's all volume driving consumer pulp that has improved that part of the business. Australia is still in a challenging situation. Inflation is sticky. And GDP is still a little bit low there. But really like the way that this is being run and where it's headed. Our online business is doing extremely well there. And has continued to perform. The innovation that we've launched has been really good. And one of the things I'm really proud of that team is they're not standing still. They're finding solutions to operate in a really challenging environment driving again new innovation, consumer engagement, really making sure that our assortment is aligned with consumer behavior So an example of that was we found some gaps in the portfolio of at the lower end that we've launched a what we call bonds everyday value product which is actually a lift in land from The U. S. So back to that, we're a global company moving innovation around the world that really address the price gap we have in the market and that's doing extremely well.

So feel good about Australia Obviously, we saw growth in the fourth quarter Australia of about 4%, which we have not seen growth in a while there. So I'm encouraged about where that business can go. The rest of The Americas business is doing fairly well. And we think we have opportunity to continue to grow that business, particularly our business in Mexico. So around the globe, international is we feel pretty good. It's normal business. It's It's grinding out business, but there's no no inventory fill or anything like that that's driving that business going forward.

Very helpful. And then I was curious about the opportunity you're seeing in the printwear business with a new streamlined operating structure, can you size Printware what it means to Haines HanesBrands, discuss your current competitive position and how that fits into your 2025 growth outlook?

Yes. We don't share the exact breakout of that business. It's not a tremendously large part of our business, but I think it can be highly incremental part of our business. And it's a business that we honestly haven't focused on that much, in the right way recently, but we are pivoting hard We got a new leadership team in place and they are working extremely hard with our partners in our business Hanes HanesBrands, the BCT fiftieth anniversary is being extremely well received. In the market, It's one of our many growth opportunities that we have for next year. We've got a lot of growth drivers and that's that's one of them. And I think we'll talk more about it as we go forward.

Our next question comes from William Reuter with Bank of America.

Hi. I have just one In terms of your sales into Mexico, as well as Canada, in the event that there were retaliatory tariffs put in place, what would be the impact potentially there? [indiscernible] The short answer is zero, because we don't move product that way. So obviously, there's I don't want to speculate on other scenarios, but there's no impact on product and tariffs between those countries, Mexico and Canada.

Okay. So just to be clear, you don't sell products into customers, retail customers. I guess they would be your wholesale sales. Into Canada and Mexico? Not from The U. S. Got it. Okay. All right. That's all for me. Thank you. Thank you.

Our next question comes from Carla Casella with JPMorgan. Hi. Given you guys have such a great touch with retail wholesale channels. Can you talk about whether you're seeing a consumer kind of shift between channels or different consumer trends within the markets Sure. Thanks Carla.

Yes, it is really good. We have our great relationships with whole bunch of different customers across the different channels. And you've seen which channels seem to be overperforming at a macro level right now. Our business performs relatively consistently with those channels. So don't want to get into specifics of our performance channel by channel, but you should expect that our business follows the macro channel trends. Relatively closely.

That concludes today's question and answer session.

Like to turn the call back to T. C. Robillard for closing remarks.

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

This concludes today's conference call. Thank you for participating. You may now disconnect. [indiscernible]