Ladies and gentlemen, thank you for standing by and welcome to the Third Quarter 2022 Gildan Activewear Earnings Conference Call. All lines have been placed on mute to prevent any background noise. Please be advised that today's conference is being recorded today, Thursday, November 3rd, 2022. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. If at any point you would like to remove yourself from the queue, just press star one again. I would now like to hand the conference over to Sophie Argiriou, Vice President of Investor Communications. Please go ahead. Good morning, and thank you all for joining us. Earlier this morning, we issued a press release announcing our earnings results for the third quarter of 2022, along with our interim shareholder report containing management's discussion and analysis and consolidated financial statements. These documents will be filed with the Canadian Securities Administrators and the U.S. Securities and Exchange Commission and are available on the company's corporate website. With me today is Glenn Chamandy, Gildan's President and Chief Executive Officer, and Rhodri Harries, Executive Vice President and Chief Financial and Administrative Officer. This morning, Rhod will take you through the results for the quarter and a Q&A session will follow. Before we begin, please take note that certain statements included in this conference call may constitute forward-looking statements. Such forward-looking statements 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 US Securities and Exchange Commission and the Canadian Securities Administrators. During this call, we will also discuss certain non-GAAP financial measures. Reconciliations to the most directly comparable IFRS financial measures are provided in today's earnings release and in our MD&A. With that, I'll turn it over to Rhod. Thank you, Sophie. Good morning all and thank you for joining us on the call today. This morning, we were pleased to report another strong quarter, particularly in the current macroeconomic environment. Specifically, despite tough retail and international markets, the strength of our vertically integrated manufacturing model and the resiliency of our large core imprintables activewear business is clearly differentiating us and driving our ability to deliver. During the third quarter, we generated sales growth of 6% over record sales last year. We delivered another quarter of operating margin at the top end of our target range, and we grew adjusted EPS by 5% while returning $125 million of capital to shareholders through dividends and share buybacks. At the end of the quarter, our balance sheet remained in great shape, with net debt to EBITDA at 1.2x as we continue to run at the low end of our target leverage framework. Moving on to the details of our results. Our sales for the quarter totaled $850 million, with activewear sales up 13%, while hosiery and underwear sales were down 26%. Total activewear sales were $742 million in the quarter compared to $656 million last year, driven by higher net selling prices. Sales volumes to U.S. and Canadian distributors grew over last year and included strong sell-through of ring spun products where we believe our market share continues to grow. The area where we saw weaker volumes was with national accounts or retail related customers due to the broader industry decline in demand across retail. International shipments were also down due to ongoing demand weakness across these markets. In hosiery and underwear, where we generated sales of $108 million in the quarter, the decline in sales compared to last year reflected both weaker sell through and the impact of tight inventory management by retailers. On the whole, and despite the challenging environment, we are pleased with the sales performance we were able to deliver in the quarter as travel, tourism, large events and the everyday use and replenishment nature of our products continued to drive underlying demand and offset softer retail market conditions. Moving on to our margin performance. Despite the headwinds of inflation across our supply chain, our margins for the quarter remained strong. We generated gross and adjusted gross margin of 29.7% in the quarter, essentially maintaining levels versus the second quarter of this year. Compared to last year, gross and adjusted gross margins declined as we expected, reflecting declines of 540 and 170 basis points respectively, compared to gross margin of 35.1% and adjusted gross margin of 31.4% in the third quarter last year. Keep in mind, last year's margin on a GAAP basis included a $30 million or 370 basis point impact related to net insurance gains tied to the 2020 hurricanes in Central America, which were not in our numbers this year. Excluding this item, the gross and adjusted gross margin decline on a year-over-year basis was due to higher raw material and other manufacturing costs, which more than offset higher net selling prices and favorable mix impacts. Turning to SG&A. Expenses for the third quarter came in at $79 million, down slightly versus the prior year. As a percentage of sales, SG&A came in at 9.3% compared to 10.1% last year. The decrease in SG&A expenses was due to lower variable compensation expenses and our continued focus on containing costs, which more than offset the impact of cost inflation and higher selling expenses. The improvement in SG&A as a percentage of sales reflected primarily the benefit of sales leverage. Overall, looking at our SG&A performance so far this year, we continue to be pleased with how the team is managing around the 10% of sales level in this difficult inflationary environment. Summing up these elements, the sales increase, combined with our gross margin and SG&A performance in the quarter, translated to operating margin levels of 20.5% on a GAAP basis and 20% on an adjusted basis, coming in at the high end of our target range. After reflecting higher net financial expenses due to increases in interest rates and average borrowing levels, higher GAAP income taxes, as well as the benefit of a lower outstanding share base driven by our share buybacks, we reported GAAP and adjusted diluted EPS for the quarter of $0.84. This compared to GAAP diluted EPS of $0.95 and adjusted EPS of $0.80 in the third quarter of 2021, reflecting a 5% year-over-year increase in EPS on an adjusted basis. Now, before concluding on our results, let me provide some commentary on our cash flow and balance sheet. During the third quarter, we generated $66 million of cash flows from operating activities, down in comparison to $243 million generated last year, mainly due to higher working capital requirements that were largely inventory related. After funding capital expenditures of $74 million, we ended up consuming $7 million of free cash flow in the quarter. On inventory levels, at quarter end, our inventories totaled just over $1.1 billion, up from $725 million last year. As a reminder, last year's inventories were at suboptimal levels due to production constraints from yarn labor shortages and the impact of the hurricanes in Central America from late in 2020. Higher inventories this quarter were also due to the impact of inflation on unit costs, as well as higher raw material and work in process levels given broader supply chain constraints. Finally, we finished the quarter with a net debt position of $944 million and maintained our leverage ratio at 1.2x at the low end of our target range, as mentioned previously. This sums up our results for the third quarter, which combined with our record results in the first half of the year, leaves us in a position of strength as we navigate through near-term challenges related to the current environment. In this regard, and importantly, our large North American business geared toward imprintable channels continues to benefit from demand driven by travel, tourism, and large events, and is expected to remain relatively stable. On the other hand, where we are seeing continued weakness is with our national account or retail-related customers, which represents a smaller part of our business. Further, in international markets, we are also continuing to see ongoing softness in demand. From a profitability standpoint, we feel good about the actions we have taken to strengthen the economics of our business. While the impact of higher costs will impact the fourth quarter, we remain committed to delivering on our operating margin targets. In closing, we have a strong team and we believe a proven track record of operating excellence in both good and tough environments. This, combined with the progress we are making in executing on the key pillars of Gildan's sustainable growth strategy driven by capacity, innovation, and ESG, gives us confidence in our ability to deliver on our three-year growth objectives, which we shared with you earlier in the year. This concludes my formal remarks, and with that, I will turn it back over to Sophie. Thank you, Rhod. At this time, we are ready to begin the question and answer session, so I will turn it to the operator to begin the session. Operator, go ahead. At this time, as a reminder, in order to ask a question, please press star one on your telephone keypad. Again, to withdraw yourself from the queue, simply press star one again. Your first question comes from the line of Mark Petrie of CIBC. Good morning. Thanks for the comments, Rhod. Hopefully you can just give us a little bit more color specifically on the volume trends that you're seeing across your channels into the early part of Q4. Okay. Thanks for the question, Mark. If you look at the volume trends we are seeing as we move into the Q4, and I think you look effectively the way that our distributor business is running, I would say we're quite pleased with that, right? As I've called out, effectively, we are seeing the strength of travel, tourism, and events related to experiences, which are driving that business. We really are seeing, I would say, trends which were similar to what we saw in Q3 and to a certain extent to what we saw in Q2. That's really providing support in this channel, I would say. You know that has been a big driver of our business, as I called out in our remarks. Really it's differentiating us and it's allowing us to drive that strong activewear growth that we saw in Q3 of 13%. If you look at other areas which are more retail related, we, as we called out, we saw weak POS as we moved through Q3. We see retailers continuing to bring down inventories in line with broader industry trends. We actually probably saw more softness in Q3 than we saw in Q2 on that side of the business. Then in international markets, we are continuing to see demand weakness also carrying over into Q3 and as we head into Q4. It's a mixed outlook, I would say, to sum up where we are. We do have that core, which is still running well as we move into the fourth quarter. Now, as we think about that, though, I think the one thing you do have to think about is as we think about last year in Q4, it was particularly strong. We did see restocking occurring in the quarter. I think just given the overall environment we won't see that in Q4 of this year. Overall, it's mixed, as we called out in the commentary on Q3, and that's continuing into Q4. Okay, and thanks for that. You sort of touched on my follow-up question just with regards to the inventory in the distributor channel. You know, not expecting sort of material restocking, but do you feel like we're sort of stable here? Or, you know, what's the outlook with regards to or what's the position with regards to distributor inventories today? Yeah. I think if you look at distributor inventories today, I would say we are at normalized levels. I think is the way to think about it for where POS is running. We have seen inventories move with POS as we've moved through the year and as we've effectively come out of, you know, what was a much weaker environment as we were coming through the pandemic. We saw strength building in 2021, and we continue to see strength in those inventories as we've moved into 2022. That doesn't mean to say that they're perfect. There are definitely areas where they still need some support, I would say. Overall, I would say inventory levels are normalized and where they should be effectively at this juncture. You know, we'd expect them to sort of continue along those lines as we move into Q4, and as we move into, you know, obviously a more of an uncertain environment. I would say they're at normalized levels and sort of probably optimized for where POS is running currently. Okay, thanks. Just last question on OpEx. I mean, it's the lowest margin rate we've seen from you guys and down, you know, from last year on a dollar basis. Could you just give us a bit more color on the drivers there? Then what's a reasonable way to think about the cost base, either on a rate or dollar basis going forward? Thanks. Yeah, If you look at the, when you talk about OpEx, Mark, are you talking about SG&A or effectively you wanna talk more broadly about our operating costs and gross margins? Can you just clarify? Yeah, sorry. I was specifically focused on SG&A. Obviously, I'll take whatever comments you care to share, but I was specifically asking about SG&A. Thanks. SG&A. Yeah. No, look, we did see very good SG&A performance in the quarter. I would say 9.3% of sales is very, very low, right, as a percentage of sales, and we're very pleased with that. I think we are working hard to contain costs in this inflationary environment. We did see lower variable comp in the quarter, and we did see a bit of an adjustment for that, actually. We did benefit from that, I would say, in the quarter. That probably in the end was about 60 basis points, when you look at it. This was a particularly favorable quarter. We did see the benefit of sales leverage. I would say overall, we're very focused on SG&A. You know, as we move through Back to Basics, we're performing very well there. We are gonna continue to focus on making sure that we have appropriate SG&A for the way that the business is running, as we go forward. I think as you look to Q4, it will probably be at those low levels. It'll be up a bit. I would say, you know, our target right now is around 10%, from an SG&A perspective, and we're trying to deliver around those levels. Some quarters will be below, some quarters in this environment may be a little bit higher. It is an area of focus. Long term, I would say as we continue to grow, as we continue to drive the business and really see that the growth that we're anticipating over the longer term, we do see even moving down from those levels. But I think in this environment right now, I would say that we're very pleased with how we performed last quarter, and particularly good versus probably what you'll see over the next few quarters as we move forward. Okay. Appreciate all the comments. All the best. Thanks. Your next question comes from Jay Sole of UBS. Great. Thank you so much. Rhod, can you give us a little bit of an update on the factory capacity expansions in Central America and Bangladesh? Just maybe give us an update on the progress you made over the last 90 days and any increase in visibility into, you know, the orders that are coming in due to fill up those factories as you look out into next year. I'll take that one. Our plans for Bangladesh are remain on track. Like we said last quarter that the plant will commence to start in Q2 of 2023, and then subsequently be built up. Bangladesh is really a Q4 2024 story basically, in terms of the capacity that will be available in that facility as we, you know, 'cause we'll have a, you know, a ramp-up period to get it up and running. As far as the rest of our capacity, it's running appropriately. We have all the things in place, I think to support growth as we move into 2023. Terrific. Thank you so much. Thank you. Your next question comes from Stephen MacLeod of BMO Capital Markets. Thank you. Good morning, everyone. I just wanted to follow on, Rhod, some of your commentary around the Q4 expectations, and specifically with respect to the gross margin. You talked about the pressure sort of accelerating in Q4. I'm just curious if you can give a little bit of color on what kind of magnitude you might be expecting. Then along those lines as well, would it be safe to say that Q4 gross margin pressure reflects kind of what we saw in terms of the peak cotton prices? Okay, Steven, thanks for the question. If you look at Q4, and again, we're not giving specific guidance, but the trends we're certainly happy to talk about. If you look at the margins for Q4, we will see the impact of higher raw material costs as we move into Q4. They will become a little bit more pronounced than what we saw in Q3. Obviously, there's a lag in what you see on the impact of cotton prices on our P&L. As prices were moving up, you start to see that coming through more so as we move into Q4. Probably you'll still see a little bit of that as we move into Q1 of next year as well, just to effectively give you an idea of how the cadence works as we move from Q3 to Q4 to Q1. Will be higher raw material prices coming through. That will put some a little bit more upward pressure, I would say, on our margins. I also talked about our SG&A performance. They're not quite as strong as what we saw in Q3. The net of all of that is that we do see our operating margins will likely be lower in Q4 than what we saw in Q3. I think we still feel very comfortable about achieving margins in our target range. Again, I think we're very pleased with the way the margin performance has evolved overall as we've moved through the year. If you look at really what we've done on the cost side, in order to operate in this environment, the way that the teams have worked to be able to effectively offset and, you know, I would say strong inflation coming through in all areas, I would say we are very pleased with the margin performance, but we will see some pressure as we move into Q4 as a result of the things that I've talked about. Right. Okay. That's helpful. Thank you. Just with respect to some of the trends you're seeing in Q4, I know you've already given some great color, but I just wanted to ask, you know, as you're seeing sort of macro weakness beginning to creep into the sentiment surely. Just curious, have you seen any impacts on uncertain pockets of the distributor business, or has it still continued to just sort of move forward across all the channels? No, look, I think our distributor business is like what Rhod said earlier, is really performing quite well, to be honest with you. I think actually in Q4, we've actually seen some increases in fleece, for example, which is helping the overall, I think, sales growth within the distributor channel. You know, we had a very warm summer this year, so you know, fleece sales historically are strong in the fall, and it's taken a little bit longer for them to kick in. The sales in fleece are actually very strong now, which is continuing to support the outlook of the distributor business as we move into Q4. Okay. That's great. Thank you very much. Your next question comes from Luke Hannan of Canaccord. Thanks. Good morning. Glenn, I think you had mentioned last call that in past periods where there were higher cotton prices, some of your competitors had pulled back on production. I think you alluded to maybe that same sort of dynamic playing out in the coming quarters. Have you seen any signs of that yet? Well, I think that there's been definitely a reduction in overall capacity, primarily driven, I think, by the, you know, poor retail conditions in the market. There's definitely, it's not just in our hemisphere. I think that's everywhere. I mean, you know, that's just a global phenomenon. I think that there's been a big, you know, reduction in overall capacity, adjusting in line with, you know, retail volumes. I mean, that's probably a fair statement in today's environment. Which, you know, I think at the end of the day, has. I think will give us the ability to excel as we move into 2023. We're well positioned from a capacity position to support the growth in 2023 as we exit 2022. Okay. Moving on to the retailer destocking. I appreciate it's tough to get some visibility here, but if we go back to the last time where there was this sort of prolonged period of retailer destocking, can you give us any ideas? Is today sort of a close proxy to what it was like then? Was it short-lived? The general tone seems to be that this overhang is taking a bit longer than maybe past overhangs. What are the sort of dynamics at play here? Well, it's hard to say, to be perfectly honest with you. I mean, I say that this is probably, from a retail perspective, probably the worst we've seen it, I mean, in a long time. Since, I mean, since we've been in the retail market, we've never seen such a, I think, a pullback. Particularly in things like underwear, which are typically staples. So, you know, there's definitely a pullback. You know, obviously things all work themselves out. We've, you know, we've. The question is, you know, when does it turn? I think that partly the inventories at the major retailers are significantly higher. You know, they're chasing volume. And until those inventories get worked through their and turned into cash, I think things will remain tight. I would just maybe on our point and looking at where we stand, which I think is more relevant, is that, you know, we entered 2022 very tight on capacity. So, you know, we didn't really, you know, go after new programs. But I would say that, you know, as we move into 2023, we worked hard this year, and we have quite a few new opportunities that will occur, which will support, I think, growth for us in that environment, despite the, you know, the negative comps on current programs and current POS. So I think that's something that I think is what we're looking for as we move into 2023. If the market, you know, continues to rebound, then I think that will be puts even in a better position. We're still cautiously optimistic about as we move out of 2022 into 2023. Got it. Thank you very much. Your next question comes from Brian Morrison at TD Securities. Hey, good morning. I wanna follow up on inventory, specifically at Gildan. You seem to be back to pre-pandemic levels. Rhod, you mentioned some of that as cost inputs, but, understand there's production discipline in the industry, but how do you think about price stability and sustaining that gross margin outlook as you get a little bit of pressure here with the decline in commodity prices? I'm gonna start with the question, I think. Look, I mean, look, pricing in the market is stable, very stable, I would say. You know, cotton is only one part of the input, obviously, which is the largest, but only one. We as a company, and I think even the industry, 'cause we're the market leader in setting prices, we only set prices for cotton in around the dollar level. Just to put that in perspective. You know, part of that people are gonna absorb in their margin because we've only raised prices up to the dollar level. We never raised them to the peak of where cotton came off the board in July. There's other, you know, significant inflation activity still happening. Energy is up significantly, and it's not just up in, you know, in Central America, it's up in the United States as well. Labor costs. I mean, everywhere you read, labor continues to grow. Polyester has gone up significantly because it's a byproduct of oil. There's other input costs that have gone up. Although cotton, you know, is starting to come down, there's other factors. They haven't. I would say that, you know, there's definitely support, you know, for price as we go. We didn't bring pricing up all the way. In the market today, you know, pricing is relatively stable. Everybody in the industry has high cost. This high cost, I think, even in raw material, will take at least 6-9 months before it gets flushed out of the industry. I mean, just because of the weaker sales and weaker POS. You know, we're not really concerned about that at this point. Okay. On inventory, Brian, I mean, if you look at the inventory increase, I called out in the remarks what's driving that, but I would say probably 40% of the increase is related to our raw materials and our WIP, and that's driven by cost. It's driven by us, I would say, carrying higher, probably safety stocks is maybe the way to think about it because of the broader supply chain constraints, right? That we've been dealing with everywhere. We have been naturally or we have been carrying higher levels of raw material and WIP. Cost is in there, but cost will ultimately reverse out. As the whole environment abates, I would say the whole tightness in, you know, various things that we use, inputs into our processes, we're talking about things like dyes and trims and all sorts of things that we use. As the supply chain effectively becomes a little bit more flexible, we don't have to carry the same types of levels that we have carried in the past, and that'll naturally reverse out. On the finished goods side, I would say again, it's being driven by cost and it's being driven by units. As we said on the cost side, that'll ultimately reverse itself out. As Glenn said, we don't see real exposure there from a price perspective when we actually go to liquidate this or move this inventory, sell this inventory, sorry, into the marketplace. From a units perspective, in certain areas, we've needed more units in order to support the business. You know, overall, we're comfortable with where we are, where the inventory levels are, especially given adjustments that we see will occur as we go forward. The final point I think you always have to remember with respect to our inventories is that we sell basic replenishment, non-fashion products. The inventory that we have, we always feel good about the quality of the inventory. Again, in the environment that we see going forward, you know, we're not concerned about our ability to be carrying high-priced inventory in an environment where we can't price for it. So overall, higher than where we were. Many of those impacts were going to unfold. They were given the environment. I think we feel we're in a good level where we currently are, and we'd like to try and stay at these levels as we move forward. Then obviously we'll benefit from that as we move into 2023. Okay, very thorough. Thank you both. One follow-up question on Bangladesh, Rhodri, maybe. Understand your ramp production full into 2020, 2024. I assume you'll transfer some production from Honduras. As it ramps up, should there be any drag on margins from Bangladesh, or is it insignificant? No, there'll be no drag on margin, it'll be insignificant. You know, we'll continue to manage our capacity based on the sales outlook, and we're in a good position today to, you know, to support sales. If we need to moderate production a little bit, it's not an issue for us at all either, which would not be any drag on our margin performance. Thank you, Glenn. Your next question comes from Vishal Shreedhar of National Bank. Thanks for taking my questions. I just wanted to get your thoughts on a few issues that have come up in the past or opportunities. In the past, Gildan has talked about the opportunity associated with nearshoring and retailers increasingly looking at private label. I wonder how these conversations are going with retailers and if you expect Gildan to capitalize on any of these opportunities, call it, in 2023. Well, that's why I said a little bit earlier. In beginning of 2021 moving into 2022, we were so tight for capacity, especially after you know, surviving the hurricane that you know, we never really focused on you know, new programs. You know, as we began 2022, we obviously aggressively started looking for new opportunities to support 2023. We do have new programs and new opportunities both from nearshoring retailers and so that's part of our obviously, our overall growth plan and strategy to support the targets that we set out over the three-year period. Definitely, we'll see some of that as we move into 2023. Okay, thanks. I know you touched on this, but with respect to the capacity expansion plans and the rebound that you're seeing in travel and tourism, as you anniversary kind of that period of weakness and the consumer gets back caught up on those end markets, do you expect the stability that you're seeing in printwear to continue or do you expect that to kind of decline as it historically has with consumer confidence? No, we expect it to continue to grow. I mean, don't forget, there's definitely a portion, although our distributor business is doing really well, there is a portion of the product that they sell that gets resold into the consumer space as well, right? You know, it could actually be going better because if you look at the beginning of the year, the POS and sales in our U.S. distributor business was much more robust than it is today. It's still good. It tailed off a bit, the part that actually just tailed off was the part that was more related, I think, around the consumer side of it. You know, we're optimistic. We're in a good position. We think that we're well positioned both from a capacity plays as well as our market, that as we sort of see this whole thing subside, you know, there'll be a lot of upside in terms of our sales volume. Combining that with new opportunities from nearshoring and retail shelf space, we're well positioned as we move into 2023 and 2024. I'd also add to that, Vishal, in the printwear business, the corporate and promotional side has never really come back to the strength that it was pre-pandemic, and that's a driver as well in the business that you know probably has been impacted by, as I said, the macro weakness that we've seen. As Glenn said, there's a number of drivers, and then you layer on you know different areas of the business which will start firing again. Overall, we see good strength. Okay. In the past during periods of weakness, Gildan has been opportunistic and capitalized on acquisitions. Wondering if that's something that you see potentially as an option for Gildan, particularly given the strength of your balance sheet. Look, we're focused on, you know, our Gildan growth story. We believe that our capacity is in place, our cost structure is in place, and objectively, we're gonna continue to stay focused and build organic growth in line with our three-year targets over the next 24 months. Thank you. Your next question comes from Paul Lejuez of Citigroup. Hey, guys. It's Brandon Cheatham on for Paul. Thanks for taking our questions. I was wondering if we could dig in a little bit on kind of price increase dynamics and how much that helped sales in the third quarter and then, you know, what units trended during the quarter. Okay. Thank you for the question. If you look at price in the third quarter, it turned out basically the way I think we had talked about on the last call that we had and for the Q2 earnings call. Effectively, price came in in the mid-teen range, which was basically where it had been traveling, effectively if you look at Q2 and Q1. Consistent, I would say, price impacts. Now, the one thing to call out there is that that's gonna actually start to moderate as we go into Q4, because there we're comping price increases in Q4 of last year, and so you'll see that price impact starting to drop down. Then from a volume perspective, we were down overall. You know, obviously we had 6% revenue growth. We did see mid-teens% on the price. Again, that was mixed depending on where you were looking. We had good strength on the distributor side, as we've talked about, whereas the retail side and the international side, there you saw because of effectively the POS weakness, the destocking, I would say tougher comps from last year, negative volume. I would say decent price offset by mixed impacts of volume across the board, and that ultimately delivered the growth for the quarter. Got it. You really start to annualize that price increase in the first quarter of next year, understanding that you took some form Q last year. Is that correct? Yeah. I mean, I think if you actually look at where we are as we move into the first quarter of next year, yes, obviously the comps really step up and the price impact really reduces as we move into Q1 and Q2 of next year. Got it. Thanks. That's helpful. Sorry if I missed it, did you guys quantify where POS is trending today and what it was in the quarter? I know we gave general, commentary on what we're seeing across the various channels. Got it. Have you guys internalized Frontier Yarns capacity fully? I know that was de-bottlenecking, but have you kept any, some of those external contracts on as you know, capacity constraints have seemed to alleviate? Yes, it was fully internalized, and it's fully part of our vertical integration today. Got it. I appreciate it. Good luck. Thank you. Your next question comes from Sabahat Khan of RBC Capital Markets. Hi. Great. Thanks. I'm just, I guess, following up on the volume and pricing discussion. I guess, as you start to lap, you know, some of the price increases and, you know, given how volume trends are kind of headed over the next while, I guess, how are you thinking about the sort of promotional activity or just in general, just other ways you can drive volume? Do you think maybe the international channel turns at some point? Just trying to get an understanding of. Also, if you can share some magnitude of shifts between whether the North American distributor channel, how that's trending versus international, just so we can understand how kind of the next 2-3 quarters may look, amidst the current backdrop. Look, I don't think that price is gonna drive volume in this market. You know, as we go through or, you know, navigate through, I think a little bit of volatility on volume. As we move into 2023, you know, our objective is to, you know, support new opportunities really. That's what we're gonna get to volume now. If the market does rebound by 2023, then we'll also get supported by, you know, the growth in the existing volumes that we do have. You know, price is not gonna drive volume in this market. I mean, it's just not gonna move the needle. If that answered your question. What's gonna move the needle for us is obviously new opportunities, new growth, nearshoring, and the things that we really laid out in our long-term planning. All right. That's helpful. I guess, are you able to maybe parse out, I know you called the volumes were down in Q3 in wholesale, but maybe, you know, how much international might have been down, and I think you indicated North America might have been positive. Are you able to just give some perspective on that? Well, I don't really wanna separate out the different channels. But again, I think if you can put together the math of where sales growth was, where price is effectively. I think we said distributor volume was positive. And then, you know, retail, you can get a sense that, you know, volumes were moving in line with, well, actually probably a little bit more negative than POS because of the destocking that was going on. In international, probably mostly driven by PO, was negative because of the weakness in all markets. And, you know, on the innerwear side, we report that, and you can see the numbers, and that was driven by POS weakness and destocking. Effectively, you know, we've got all these trends that are impacting us. A really mixed environment, but the core strength of our distributor business is really holding up. As we go, you know, forward, ultimately, what we're seeing on the retail side, it will reverse. Ultimately, retailers work their way through inventory levels. We will start to see the upside from, you know, what's occurred in the last few quarters, again, because our products are basic. They're replenishment. They need them on the shelves. You know, obviously if, as Glenn said, we're looking at some new programs that drives sell in, as well as sell through. You know, I would say overall, if you look at the environment that we're in now, it is, I would say, a tougher environment from a volume perspective, although again, some areas, some bright spots. As we go forward, those longer term trends will still be there for us, you know, given the basic nitty-gritty or sort of the setup of our business and then those macro trends that Glenn called out, that we've been talking about in casualization, on the creator economy, on nearshoring, on private label, on ESG. I mean, all of these things are driving our business, ultimately driving really good demand for Activewear. And that's why we do feel, I would say, confident about our ability to deliver on our three-year targets. We are in an unstable or a weaker environment now. We'll see what happens in 2023. We don't have a crystal ball. We don't know. These trends are strong, and they're driving our business over the long term. Great. Thanks for that color. Just one quick one. You know, through kind of the last couple of years, there's been a benefit from kind of the stay-at-home worker, some of that, I think, creator economy that you referenced. Are you finding that, you know, some of that business is still with you? What is kind of the longer term outlook, for that sort of work from home consumer, maybe some of those online sales that you started to gather over the last couple of years? Just some color there. Well, that's what we said. I mean, those online sales are maybe more relevant to retail, let's say for example, consumer end user. The end user is a consumer. You know, our distributor business in the first quarter was up until sometime mid-March significantly higher than it is today. That part of the business, we think, you know, is the part that fell off. What didn't fall off is all the travel, you know, team sports, uniform, rock concerts, you know, that part's still NASCAR, sporting events. I mean, that part's still, you know, strong and driving, you know, our volume. The part that we think in the distributor area that actually mitigated a little bit was exactly the part that was more addressed to the consumer. I don't think that's going away. I think that's just the broader overall consumer market, and there's just a little bit of that within our distributor segment. Overall, we're still very optimistic and, I think that we're well-positioned. Great. Thanks very much for that. Your next question comes from Chris Li of Desjardins. Good morning, everyone. My first question is just going back to cotton. If you assume that cotton prices stay where they are and assuming, you know, the selling price stability is maintained, do you expect cotton to be a tailwind for margins next year, assuming that the hedge costs for next year will likely be lower than the current year? Thank you. Well, there's all kinds of puts and takes, right? So we don't know exactly where we'll end up, but I would just say, look, there's still other inflation. Like I said earlier, you know, we have energy, labor, other input costs, polyester offsetting cotton. So it's, you know, there are all kinds of puts and takes. So look, I think moreover, we're confident in delivering our operating margins and we'll be in that range as we move into 2023, supported by sales growth. Okay, that's helpful, Glenn. Maybe another one, just maybe follow up on the comments you've been making about new program opportunities for next year. Can you maybe drill down for us a little bit, you know, where are you seeing the opportunities? How much visibility do you have? Then maybe just the size of the opportunity for next year, please. Thank you. Well, the opportunities are really part of our overall long-term strategy, which is nearshoring a retailer private label. Obviously, those are the big areas of growth for the company, as well as obviously, you know, continued growth in our distributor and national account segment. That's where we're seeing the new opportunities. They're a function of us bringing on capacity. We were so tight last year that we really didn't for 2022 really want to bring on new programs. As we built up our capacity during the year, integrated Frontier and had available insight to more opportunity, you know, we started aggressively going after these programs. We do have new volume opportunities, which will support growth for 2023. You know, depending on how the market performs on our existing business, and that will sort of. We'll see what happens. That's the part that we really don't have a crystal ball on. You know, we're well-positioned, I think, in doing all the things we can in our power to support growth. Great. Okay, thanks, Glenn. All the best. Thank you. Thank you. This concludes the question and answer session of today's call. I would like to now turn over to Rhodri Harries for closing remarks. Okay, thank you, operator. Before we close off the call, I would just like to mention to everybody that many of you know that Sophie will be retiring at the end of this year. This has been Sophie's last earnings call. At Gildan, we have many talented employees across the organization. That's what drives Gildan every day. Sophie really has been one of them. Really over her last 17 years at Gildan has made an outstanding contribution to the IR area and has obviously interacted with many of you. I think Glenn and I and the rest of the team would just like to thank Sophie and wish her all the best as she heads towards a very well-earned retirement. Unfortunately or maybe fortunately, no more quarterly calls. With that, thank you everybody. Really appreciate you joining and we look forward to talking with you going forward. Thank you, and thank you, Sophie. Thank you, Rhod. This concludes today's call. Thank you for your participation. You may now disconnect.