Ladies and gentlemen, thank you for standing by, and welcome to the Q1 2023 Gildan Activewear Earnings Conference Call. All lines have been placed on mute to prevent any background noise. 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 one on your telephone keypad. If you would like to withdraw your question, again, press the star one. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Elisabeth Hamaoui. Please go ahead. Good afternoon, everyone. Earlier, we issued a press release announcing our results for the 1st quarter of 2023. We also issued our interim shareholder report with the Canadian Securities Regulatory Authorities and the U.S Securities and Exchange Commission, which are available on the company's corporate website. As a reminder, please note that we will be holding our virtual AGM tomorrow morning at 10:00 A.M. Eastern time. More information can be found on our events page. Joining me on the call are Glenn Chamandy, President and CEO of Gildan, Rhodri Harries, our Executive Vice President and Chief Financial and Administrative Officer, Chuck Ward, President Sales, Marketing and Distribution, and Jessy Hayem, Vice President, Head of Investor Relations, which Rod will introduce in a moment. Before I begin, please take note that certain statements included in this conference call may constitute forward-looking statements which involve unknown and known risks, uncertainties and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. We refer you to the Company's filings with the US Securities and Exchange Commission and Canadian Securities Regulatory Authorities. During this call, we will also discuss certain non-GAAP financial measures. Reconciliations to the most directly comparable IFRS measures are provided in today's earnings release as well as our MD&A. Now I'll turn it over to Rod. Thank you, Elizabeth, and thank you all for joining us today to discuss our first quarter results. Before I start, I'd like to welcome Jessy Hayem, our new Vice President, Head of Investor Relations at Gildan, who, as Elizabeth called out, is joining us on the call today. Many of you may know Jessy as prior to her last role, she spent much of her career as a sell side analyst, including 10 years covering Gildan. We are extremely pleased to have Jessy joining the team, and I know she is looking forward to meeting with all of you. Now moving to the results. The quarter unfolded largely as we anticipated, with sales in line with our expectations and year-over-year demand trends showing meaningful improvement sequentially across all categories and channels. We did experience some margin pressure during the quarter, which came in slightly higher than we had anticipated due to the timing of fleece shipments, which I'll address a little later. All in all, we were pleased with our quarterly performance. Even though the economic environment remains uncertain, we remain comfortable reconfirming our outlook today. Further, and more importantly, I'd like to highlight that we are continuing to make progress with our GSG strategy. After one year of execution, we are pleased with the initiatives we are driving under each of our strategic pillars related to capacity, innovation and ESG, which all are reinforcing our strong competitive position. We also remain committed to our capital allocation priorities, including return of capital to shareholders, supported by our healthy balance sheet and strong annual free cash flow generation. With that, let's now turn to the details of our Q1 results. Net sales for the first quarter came in at $703 million, reflecting a decline in activewear sales of 12%, partly offset by 7% growth in the hosiery and underwear category. In activewear, as previously communicated, we faced a strong comparative period as we cycled post-pandemic inventory replenishment at U.S. distributors. Overall, although year-over-year POS trends at North American distributors remained down, they showed notable sequential quarterly improvement. While international sales in the quarter were down 17%, continuing to maintain a positive outlook regarding recovery in international markets for the full year, encouraged by positive POS in the first quarter. Growth in the hosiery and underwear category for the quarter was mainly driven by socks, both in the mass channel and with global lifestyle brand customers. While industry demand for men's underwear remained down year-over-year, year-over-year POS trends improved sequentially, and we are pleased with how our private label underwear programs are unfolding. Additionally, while our retail customers remain cautious on replenishment across all product categories, we were encouraged by improving inventory levels in the first quarter, reflecting what we believe is an improving demand environment for our products. Turning to margins. Gross and adjusted gross margin came in at 26.7% and 26.2%, down year-over-year by 430 and 470 basis points, respectively. This is mainly a result of the anticipated flow through impact on our cost of sales of peak fiber costs and higher manufacturing input costs. Margins were also impacted by unfavorable mix related to fleece sales. Specifically, despite strong fleece POS in the quarter, we saw lower fleece shipments than expected as distributors are being careful in this environment to buy as close as possible to their needs, which for this category tends to be more towards the back half of the year. Accordingly, while this impacted our margins for the quarter, the mix impact is expected to reverse throughout the remainder of the year. These factors were partly offset by the favorable impact of higher net selling prices in the quarter, which we implemented and called out last year. SG&A expenses for the first quarter of $82 million were largely in line with prior year levels. As a percentage of net sales were 11.6%, which was up from the prior year due to sales deleverage. We generated operating income of 18.2% of sales, which included the benefit of a $25 million gain from the sale and leaseback of one of our U.S. distribution facilities. Excluding this gain, adjusted operating income was 14.6% of sales, slightly below our expectations, largely due to the unfavorable mix impact of the lower fleet sales during the quarter. After reflecting increased net financial expenses of $17 million and higher GAAP income taxes tied to the sale and leaseback gain and factoring in continued share repurchases, we reported GAAP and adjusted diluted EPS for the quarter of $0.54 and $0.45, respectively. Moving on to cash flow. Higher working capital investments and lower net earnings led to a $179 million of cash flows used in operating activities in the first quarter. After capital expenditures of $74 million and net proceeds of $51 million from the sale and leaseback transaction, we consumed approximately $202 million of free cash flow in the first quarter. Higher capital expenditures during the quarter mostly reflected investments in our new manufacturing complex in Bangladesh. In fact, construction of the first facility is in its final stages, and progressive ramp-up of operations is now underway, which will continue through 2023 into 2024. We also bought back 1 million shares in the quarter, reflecting our strong commitment to return capital to shareholders under our capital allocation priorities. The company ended the first quarter of 2023 with net debt of $1.15 billion and a net debt to EBITDA leverage ratio of 1.6 times, in line with our 1-2 times leverage framework. Moving on to the outlook. Today, we reconfirmed our full year outlook, which we provided on February 23rd, as we continue to believe we have the ability to drive top line growth in 2023. Specifically, while the economic environment remains uncertain and we are dealing with cautiousness on inventory levels with our customers, our POS trends were in line with our expectations for the first quarter. Further, we continue to expect incremental sales from the rollout of new programs servicing retail end markets to provide growth. We also expect continuing recovery in international markets, driven by increased availability and depth of product at distributors. Even though the first half of the year will be challenging due to difficult comparative periods related to post-pandemic inventory replenishment in 2022 and the impact of peak raw material and higher input costs in our inventories flowing through our cost of sales in the first half of 2023, we see growth and margin improvement once these headwinds abate. Summing this all up, we continue to expect sales for the full year to be up low single digits compared to 2022. With margin pressures from raw materials easing in the second half, we continue to expect our adjusted operating margin to fall within our 18%-20% annual target range for the full year. We expect CapEx to come in at the lower end of our previously stated 6%-8% range. We expect strong free cash flow generation for the full year. On the bottom line, we expect adjusted diluted EPS in line with 2022, which assumes the continuation of share repurchases aligned with our capital allocation targets of purchasing approximately 5% of our outstanding public float in 2023. In conclusion, while we are mindful of the economic uncertainty and we are seeing cautiousness and a mixed consumer environment, we continue to be cautiously optimistic on 2023 and continue to work hard towards delivering on our goals and creating shareholder value. Thank you. I will now turn the call back to Elisabeth. Thank you, Rhod. Before moving to the Q&A session, I ask that you limit the number of questions to two, and we will circle back if time permits. Operator, you may begin the Q&A session. Again, as a reminder, if you have a question, please press star one on your telephone keypad. Your first question comes from the line of Paul Lejuez from Citigroup. Please go ahead. Everyone, this is Brandon Cheatham on for Paul. Thanks for taking my question. I just wanted to kind of dig in on the international segment. You know, POS trends seem like they were positive, but sales down 17%, which would suggest a pretty meaningful restocking. I guess like if current trends continue, at what point do you think that they kind of run through that product, and you can start to see that strong POS trend translate to sales? Go ahead. Well, good afternoon, and we think again, I do think most of the destocking has occurred, and the inventory is in good position. Again, I think as you said, we saw on international, we saw POS up mid-single digits. We think the destocking is finished, and now we will see replenishment along with POS. Got you. Where is POS trending currently, you know, versus what you experienced in the quarter? Has trends improved at all? You were asking before about international, so I'll address that first. The international POS continues to be positive, so it's trending as it did in the first quarter. From a U.S. perspective, it is, you know, was flat to slightly down, but it has started to turn positive now. One thing just to remember maybe is that in, you know, in Q4 was sort of like the bottom of our POS and then, you know, it started to improve in Q1. Q1 was slightly down from last year, and now we're planning to be, you know, flat to slightly down in Q2, I would say more like the flattish level. What's more important in Q1 is that, you know, that's before the market really started to turn. We're slightly below where the market started to retract basically, you know, sometime toward the end of March. I think that we did relatively good. You know, that's where we're pretty, we're pretty optimistic that we're seeing, good trends. One thing that's I think is still affecting POS is the weather. I mean, the weather in April has been terrible. You know, we're starting to see some good days right now, but it's, you know, in Montreal here, it's still winter, but, you know, you're reading in the paper it's just not good anywhere. I think weather has a little bit to do with it, but we're very, I think, cautiously optimistic, as we move into Q2. Got you. Your next question comes from the line of Martin Landry of Stifel GMP. Please go ahead. Hi, good evening. I was wondering if you could discuss the inventory levels at your distributor, you know. How many days do you have currently, and how does that compare to your historical levels? Historically, the inventory level is, I would say normal, except for we think we're on the low end of the fleece. As Rod Harries called out, we had a little bit more destocking than we anticipated in fleece, but the levels are pretty well in line with historic levels moving into the season. Okay. In your outlook, you mentioned, you know, the contribution that you expect from new retail programs. Wondering if you can discuss the size of these programs and timing? Well, what we said earlier in our last call, if you look at the guidance we set out for the year, we said that the US overall market was gonna be down around 3 or low single digits. We said that our overall sales volume was gonna be up low single digits, and the delta between those two is the new programs, and also some growth in Europe. Your next question comes from the line of George Doumet, Scotiabank. Yeah, guys. Please go ahead. Yeah. Thank you. You mentioned improving inventory levels at the retailers. Can you maybe give us some color there, perhaps in magnitude and maybe how long you think it'll take to get to normalized levels? Rod, on the last call, you mentioned that the impact of managing inventory is tightly, was around $75 million for Q1. Just wondering if you have a similar estimate for Q2. Yeah. Look, if you look at retail inventories and where we are, I mean, obviously through the back half of last year, effectively, there was a lot of destocking going on. As we moved into the first quarter, I would say we saw that stabilize somewhat. It was a little bit variable across the different channels, but I would say it was stabilizing. As we're moving into Q2, on the retail side, I would say we mostly believe the destock is behind us. If you look at Q2 sales overall and the way we think about it, and maybe this is a good opportunity just for me to run through kind of where we are on that. Effectively, and I've called this out on prior calls, we do expect that we still will get some price in Q2. Effectively, we get the wraparound from price from last year. We saw that in Q1, and we're gonna see it in Q2, probably around low single digits. Volumes will be down from that. If you look at the distributor POS, as Chuck and Glenn called out, we are seeing an improving environment as we moved into Q2. If you look at Q1, we were down low single digits, what we expected on the distributor side. As we move into Q2, it's improving as we said, and we're looking at more like a flattish type of environment. If you look in the retail side, the POS effectively is improving also versus what we saw in Q1. Q1, it was more like down, I would say, double digits. Now we're probably down high single digits. We have all of these factors together. Plus, we have the fact that we will not be able to comp the restocking that we saw in Q2 of last year. You know, last year, very definitely in Q1 and Q2, we saw a lot of restocking. This year in the first half, we won't be able to comp that. If you think about where we're gonna be on net sales for Q2, I would say it's gonna look a lot like Q1, probably from a percentage perspective as to, you know, what we're gonna see for the quarter. That sort of wraps it all together so you can get a sense of, you know, where we're gonna end up. There will be difficult to comp the restocking, but then that'll all be behind us, and in many respects, that turns into a headwind in the back half. Appreciate your color there. Just maybe my last one. Looking at that 470 basis point decline in adjusted gross margin, can you maybe break that down for us? I'm just curious how much of that impact was fleece, the negative mix from fleece? I guess, what gives you confidence that we could maybe recover some of that margin, I guess, as the year progresses? Yeah, look, our confidence is driven by the POS on the fleece, right? The fleece has been a very strong category for us. It continues to be a very strong category. In Q1, we saw a very strong POS, we know that effectively the demand will come through. We were expecting a stronger demand in the first quarter than we saw, the impact of that was probably about 100 basis points. Our margins came in about 100 basis points lower than we were expecting as a result of that. Of course, that will turn into a positive tailwind as we move through Q2 and barely more into Q3 and Q4, because ultimately that fleece will come through because of the, again, the strong POS and ultimately the demand will drive the sales. Your next question comes from the line of Jay Sole, UBS. Please go ahead. Great. Thank you so much. Would it be possible to maybe talk about the T-shirt business, how, you know, the ring-spun tees performed, you know, versus open-end and any trends that you're seeing in that business? Thank you. Good evening, Jay. Thank you for the question. I guess to your question around kind of the difference between the ring-spun and the open-end, we did see the open-end was down during the quarter, you know, high single digits, whereas we saw the ring-spun up high single digits. We're continuing to see a mix shift there as to the ring-spun T-shirts. And that trend has kinda continued through first quarter, continuous from last year as well. Got it. Maybe just add one more thing on that, because a lot of the, you know, promotional products, basically, you know, that the, you know, the corporate promotional side of the market hasn't really come back to its full potential. I think that's where we're still feeling a little bit more on the basics, where we're not getting the traction, which is pretty much upside, I think, as we continue to move into the future. Got it. You know, can you talk about sort of the ramp-up of the new facilities, both Bangladesh and in Central America? Like, is that connected to your ability to deliver these new programs that are servicing retail that, Rod talked about in the prepared remarks? No, look, we have, obviously, the ramp-up is gonna help us to continue to develop our ring-spun portfolio, including underwear and activewear-type products. We're in a relatively good position from a capacity perspective. We have all of our capacity installed in Central America and the DR, like we said we were going to do. We're currently running around 85% to 90% of our capacity in Central America. We've got ample capacity there to support these programs and other programs. We're building up Bangladesh to start, started, and it's gonna ramp up slowly during the year and really build up during 2024 for continued growth. We're pretty optimistic. Look, the key thing for us is, look, we got the capacity in place, really to support the growth as we move into 2023 and into 2024. We're well positioned both from a product perspective and a capacity perspective. Your next question comes from the line of Stephen MacLeod, BMO Capital Markets. Please go ahead. Thank you. Good, good evening. Just wanted to circle around on the SG&A. I know it was, it came in a bit higher as a% of sales, I just wanted to confirm, is there anything in there on higher costs, or is it just a matter of deleveraging from the top line? It's just deleveraging. We've got our SG&A, I would say, well under control. I think as you go through the year, you know, in, from a full year, and we've called this out, we're basically running to a target of around 10% of sales. You know, we have it well dialed in, Steven. If you look at what went on in the quarter, it was basically just deleveraging. Okay. That makes sense. Thank you. Just as you think about the gross margin for the rest of the year, you know, you talked about some of that fleece headwind turning into a tailwind, but it sounds like that's mostly Q3 and Q4 weighted, if I understood that correctly. If you could just confirm that'd be great. I guess secondly to that, how does cotton price deflation that we've seen, we've seen some, cotton prices come off, how does that impact your margin and your cost base going forward? If you look at effectively the cotton prices, I mean, I would say that, you know, we have high cotton prices coming through our cost of sales flowing through, as I called out in Q1 and to a certain extent in Q2. Once we get past that, it will effectively be behind us. You know, we know that effectively that in the back half, I mean, we have a lot of our inventory already in place now, right? As we move into the back half, we will see the benefit of that. We, you know, we do expect our pricing will hold up well effectively, because if you think about the way we priced, we never took our prices up to reflect peak cotton prices. Our prices are, I would say, very much aligned with where cotton in our cost of goods is going to, not where it currently is, because right now we're seeing the pressure on our margins. Where it's going to, I think I would say we're very well placed. If you look at Q1, there was a fair amount of pressure on our overall margins as a result of cotton. Also it was related to manufacturing costs as well, higher inflationary costs that were flowing through. If you move to Q2, that is still going to be in our cost of goods, but it's gonna start to abate. If you look at, on a sequential basis, effectively, what the, change in our margins are going to be, probably in Q2 versus Q1, we're gonna see 100, 150 basis point uplift as a result of effectively the, I would say, improved cost position flowing through. It really improves as we move into Q3 and Q4. We have a lot of that in inventory already, so we can see it coming. That effectively is how it's all, rolling through. Your next question comes from the line of Luke Hannan, Canaccord Genuity. Please go ahead. Thanks. Good afternoon. Glenn, if we think back to last quarter, one thing that you had brought up was that your balance sheet being better equipped to handle financing more inventory than peers would be something that would help you capture share from those competitors. How has that played out through Q1 and then thus far into Q2? Are you seeing that play out, and how is that playing out versus expectations? Well, I think we're right where we wanna be, and we think we're, you know, gaining share in every category. I mean, to be perfectly honest with you, I think we're outperforming the market. you know, we're giving you our POS. I think the market is below our results significantly. you know, we're actually outperforming the market right now, and I think we're well positioned. The inventory is in good shape. and, you know, our inventories are high right now, mainly because, you know, we have a lot of fleece that we're gearing up for to ship in the, you know, as we get into the season. we also geared up to supply the new programs that we have. At the end of the year, our inventory should be, you know, equal to or slightly below where we started the year in 2023 or way it ends in 2022. Everything is in line. Our capacity is in line. Our inventory is in line. Our products are in line. Our POS is performing. We're out working hard to build new programs and are very optimistic as, you know, as we continue to move into 2024. Okay. For my follow-up, Rhodri Harries, correct me if I'm wrong, but I think I heard you correctly in that there will be a low single-digit benefit from price in Q2. From price, that carryover effect, the price that was taken last year. What do you see playing out for the balance of this year as well, that carryover effect? How should that play into results? Like, if you think of where we were in the first quarter where it was, mid-single digit, second quarter, low single digit, full year, I think I called out on the prior call. It's about low single digits. We're not assuming price in the, in the back half effectively, and we'll have worked our way through the wraparound by the end of the second quarter. That'll be the full year effect, Luke. I think we're trying to be very balanced in the way that we think about price. Again, I think it's gonna hold up well as we move into the back half 'cause of the reasons that we outlined. Effectively, it's low single digit for the full year. Your next question comes from the line of Chris Lee of Desjardins. Please go ahead. Oh, hi, good afternoon, everyone. Hey, Glenn, I just wanted to dive a bit deeper into the POS trend. You mentioned that it's up slightly positively in Q2 so far. Just curious, you know, when you look at your end user demand, which sort of segments are driving that growth? It sounds like also from your earlier comments that you are gaining share because the market overall is down below where you are trending. Well, I would say that in, you know, the distributor market, you know, there's different, you know, categories, travel, entertainment, rock concerts, you know, the experience. I mean, those are the things that are continuing to drive, I think, the momentum in distributor channel. You know, when it goes to T-shirts going into the retail channel, which was, you know, a big boom that really, you know, slowed down last year, we're starting to see that pick up again as well, as inventories subside and retailers start to buy, open, they're open to buy and start buying more product. I think overall, everywhere, we're feeling pretty comfortable with the POS. You know, it's really more of the same. There's nothing that's changed. It's just a question of, you know, in our distributor business, taking share. I think in our, you know, in our business that services T-shirts to retailers, making sure that, the retailers are starting to place orders and work through their inventories. Okay, that's helpful. My other follow-up question just on sales again. Just looking at your hosiery and underwear segment, is there much seasonality with that business? If not, is the $150 million of revenue that you did in Q1, is that a good run rate for the rest of the year with perhaps some upside in the second half as the new retail programs start to kick in? Well, the only. Yeah, exactly. That's the point. I think that on a, you know, on a constant basis is one thing, you know, as we go into the back half, we're gonna have all the new programs. We should get a big lift in sales. If you'd like to ask a question, press star then 1 on your telephone keypad. Your next question comes from the line of Brian Morrison, TD Securities. Please go ahead. Good evening. Rod, I just wanna circle back to the color on the Q2 margin. Last quarter, you said that we should be back in our historical range. I appreciate the headwinds that you've talked about with the sales outlook and fleece mix and input prices, can you just maybe provide some color on the decline since the call, the Q1, pardon me, the Q4 call on your outlook? Is it the fleece mix that's taken the margin down a little bit? Yeah, it is. I mean, we're being a little bit cautious. As I called out, you know, what we're seeing is people are effectively taking the product or they wanna take the product a little bit closer to the season this year. As based on what we saw in Q1, we wanna be a little bit cautious as we look at Q2. Again, it's gonna come through. We know absolutely it will. I would say effectively that's what was driving, I would say, a little bit more cautious view on Q2 and versus where we were when we reported Q4. Okay. The input prices, that will still be a headwind, but that had been anticipated previously, correct? That had been anticipated, correct. Okay. Just following up on the pardon me, on the fleece, because it's a big part of the story in terms of margin profile. POS for the industry, is that up, or is it up for Gildan because you're taking so much market share? We don't have all the information in industry, market share data, but I would say that as far as we're concerned, we're seeing, you know, good signs, good POS, and it's, you know, high single, low double-digit growth so far. Your next question come from Sabahat Khan of RBC Capital Markets. Please go ahead. Okay. Thanks very much. There's a lot of commentary earlier that you shared on the inventory position of the distributors. I guess big picture, what kind of, I guess, demand environment are the distributors generally preparing for? Are they expecting moderation in POS through the back half of the year, or are they kind of expecting flutters? What's their perspective on the demand uptake, and what are they preparing for from, well, what you're hearing? Look, I think that, look, everybody is cautiously optimistic, I think is the way to position it. Inventories are in good shape now. I mean, you know, we're obviously we've called out the year-over-year impact. You know, as we go through, I think that, you know, people are optimistic or cautious about moving forward in this environment. You know, it's just, it's the macro environment that is just uncertain a little bit. I'd say that when we were early on in the year, I think people were more pessimistic than I think the tone is today. I think that things are improving, just the vibe of the way people are thinking about the market and the opportunity. You know, it leaves us with optimists. We're optimistic but cautious about, you know, what we're doing as we go forward. I think that's a general consensus amongst our customers and end users. All right. Great. Then when we think about the EBIT margin range that you're providing for the year, given that you've got pricing sort of in place already, whatever you're gonna see flow through, is it really volume or POS or just demand, I guess, that determines whether you're at the low end or high end of that range from here on forward? Look, we do have our cost structure, I would say, you know, well under control. As we go through the year, yeah, I mean, It's gonna be driven by what we've said from a sales perspective, what we've highlighted with respect to the low single-digit growth and what's going on in the various areas, including the rollout of the new programs, international. I mean, there's a lot of good things that are occurring as we move through the year. That'll play out. I would say that, yeah, that's why we do feel good about our margins and delivering between the 18% and the 20%. It's, I would say, we've got good line of sight on a lot of it. Of course, we don't control the macro environment, but there are a lot of positive things happening across the business. We, as Glenn said, are cautiously optimistic. Great. Thanks so much. Again, if you would like to ask a question, press the star and the number one on your telephone keypad. Your next question comes from the line of Mark Petrie of CIBC. Please go ahead. Hey, good afternoon. Thanks for all the comments so far. I just had one question, actually, just on the corporate inventory levels. Obviously there's some normalization there, and you've already called out the impact of fleece, but I'm just trying to understand where you think the inventory levels will normalize, as we progress through the course of the year or by the end of the year? If you look at the inventory levels, Mark, yes, if you look at where we were in the first quarter, we were up a bit versus the end of the year. I mean, you expect that to a certain extent from a seasonal perspective, but also because of what went on with fleece, the rollout of the new programs. All of these things were playing in. I think, you know, we see it. We've seen peak inventory levels, and as we move into Q2, we see some progress on that. As we get to the end of the year, I think Glenn called it out, we're expecting our inventory levels to be below where we started the year. I would say overall from a, from an inventory perspective, I mean, the good news is we've got great, I would say, depth and ability to service, and that's very important in the business. We are seeing that, you know, there'll be areas to take advantage of that. I think we feel good about inventory. Because of that, we do expect to have strong free cash flow for the full year. I called this out on the last call, if you look at effectively, you know, what, where our free cash flow was last year. If you look at what we, you know, the build that we had in working capital last year. If you look at CapEx, where it was last year and this year, we are expecting it to be down a bit from 2022. We do expect to see strong free cash flow for the full year. You know, if you run through the numbers and you compare to last year, and you take inventory that's going to be slightly down, you know, you can really see that our free cash flow could be, you know, north of $450 million for the year. A very good and strong delivery, as a result of effectively, we've made that investment in inventory, and now we're gonna benefit from it as we move through the year. Okay, thanks. Just one more just to clarify the comments with regards to the progression for gross margin into Q2. I think you had said 100 to 150 basis points uplift from Q1 on cotton sequentially. Is that right? Were you saying that specifically for cotton, or were you saying... No. overall, that's what you expect? No, it's a, it's a combination of what's going on, overall, and it's being driven by, cotton. It's being driven by some manufacturing, other manufacturing costs as well. Then you've got some movements as well in price and mix. I think it's a good estimate of effectively what's going on. You know, look, cotton is improving for us and, effectively manufacturing cost is improving for us as we go through Q2 and then very, you know, definitely as we go to Q3 and Q4. There are no further questions at this time. This concludes today's conference call. You may now disconnect. Thank you.