Ladies and gentlemen, thank you for standing by and Welcome to the Q2 2023 Gildan Activewear Earnings Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Jessy Hayem. Please go ahead. Good morning, everyone. Earlier, we issued a press release announcing our results for the Q2 of 2023. We also issued our interim shareholder report with the Canadian Securities and Regulatory Authorities and the U.S. Securities Commission, which are available on our corporate website. Joining me on the call today are Glenn Chamandy, President and CEO of Gildan; Rod Harries, our Executive Vice President and Chief Financial and Administrative Officer; and Chuck Ward, President, Sales, Marketing and Distribution. This morning, Rod will take you through the results for the quarter, and a question-and-answer session will follow. Before we begin, please take note that certain statements included in this conference call may constitute forward-looking statements, which involve unknown and known risks, uncertainties, and other factors, which would cause actual results to differ materially from future results expressed or implied by such forward-looking statements. We refer you to the company's filings with the U.S. Securities and Exchange Commission and Canadian securities regulatory authorities. During this call, we will also discuss certain non-GAAP financial measures. Reconciliations to the most directly comparable IFRS measures are provided in today's earnings release, as well as our MD&A. Now I'll turn it over to Rod. Thank you, Jesse. Good morning to all, and thank you for joining us on the call today. This morning, we reported our Q2 results, which came in slightly ahead of our expectations, top line and operating margin. We ended the quarter with $840 million in net sales, with better-than-expected sales volumes in activewear, which offset weaker than expected product mix tied to current market conditions, which I'll speak about a little later. During the quarter, we believe we outperformed the industry in a challenging environment, supported by positive activewear POS trends and the breadth of our product offering, which provided flexibility in what appears to be an increasingly more price-conscious environment. This speaks to our strong competitive position and our ability to continue to drive market share gains. This said, while we continue to expect our revenues to grow year-over-year in the second half, we believe it is prudent to lower our outlook for the full year to reflect the impact of current market conditions on activewear mix, as well as near-term uncertainty related to the broader macro environment. I will take you through the details of our revised 2023 outlook a little later, but first, I'd like to highlight that we remain fully committed to our capital allocation priorities, having returned $175 million to shareholders year-to-date, supported by strong free cash flow, which we continue to expect will exceed $425 million for the full year. As such, with our existing NCIB program expiring, we announced this morning the renewal of our NCIB program to repurchase up to 5% of the company's issued and outstanding common shares over the next 12 months. Let me turn to the specifics of our Q2 results. Net sales for the Q2 came in at $840 million, down 6% year-over-year, reflecting a decline in Activewear sales of 9%, partly offset by 8% 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. Overall, the year-over-year POS trend for the Activewear category was positive during the quarter, driven by performance in North America, which improved sequentially, largely as anticipated. International markets remain challenged, with sales in the quarter down 2% versus the prior year, with POS trends softening sequentially, which fell below our expectations. Finally, good growth in the hosiery and underwear category for the quarter was mainly driven by underwear sales volume growth, reflecting the expansion of our private label offering and the rollout of new programs in the mass retail channel. Further, while industry demand for men's underwear remained down year-over-year, it continues to improve sequentially, and we remain encouraged by the improving momentum for this product. Turning to margins. Adjusted gross margin came in at 25.8%, down 380 basis points year-over-year. This is largely a result of the anticipated flow-through impact on our cost of sales of peak fiber, as well as unfavorable product mix in activewear related to shifting product preferences in this environment. SG&A expenses for the second quarter were $78 million, down $11 million versus last year, mainly due to lower variable compensation expenses and our continued cost containment efforts, which more than offset the impact of cost inflation. As a percentage of sales, SG&A of 9.3% improved 70 basis points despite the impact of sales deleverage. Consequently, we generated operating income of 21.7% of sales during the quarter, which included a net insurance gain of $74 million related to the two hurricanes that impacted the company's operations in Central America back in 2020, partly offset by restructuring charges of $30 million, which include the closure of a sewing facility in Honduras. On an adjusted basis, operating margin of 16.5% was up 190 basis points sequentially, slightly better than expected. Down 310 points compared to the prior year. After reflecting net financial expenses of $21 million and factoring in continued share repurchases, we reported GAAP and adjusted diluted EPS for the quarter of $0.87 and $0.63, respectively. Moving on to cash flow and balance sheet items. Cash flow from operating activities was $182 million in the second quarter, which includes the net positive effect from the insurance gain mentioned earlier. This compares to $210 million in the prior year. The drop is primarily due to higher working capital and lower net earnings. We continue to maintain healthy inventory levels, ensuring product availability and depth. Furthermore, we expect our inventory levels to decrease sequentially, as was the case in Q2, and end the year below 2022 levels. After capital expenditures of $56 million, we generated approximately $126 million of free cash flow in the second quarter. On the CapEx front, the progressive ramp-up of our new Bangladesh facilities is underway, which will continue through 2023 into 2024. We also bought back 2.6 million shares in the quarter, reflecting our strong commitment to return capital to shareholders. The company ended the second quarter of 2023 with net debt of $1.17 billion and a net debt to EBITDA leverage ratio of 1.8 times, in line with our 1- 2 times targeted debt levels. Moving on to the outlook for the full year. With strong comparative periods now behind us, we continue to expect our revenues to grow in the second half of the year, supported by the planned rollout of incremental retail programs. Despite continued market share gains, we are seeing current market conditions negatively impact activewear product mix in both North American and international markets, as customers focus on lower priced products. Combined with the near-term uncertainty related to the macro environment, we believe it is prudent to temper our previous full year 2023 expectations for revenue growth and operating margins, which now reflect the trade-down occurring within our Activewear product category. Finally, our full year 2023 outlook is also factoring in the impact of higher than previously expected financial charges for the second half. Accordingly, for 2023, we now expect revenue for the full year to be flat to down low single digits versus the prior year. We also expect full year adjusted operating margin to be slightly below the low end of our 18%-20% annual target range. Although this said, we continue to expect sequential quarterly improvement in operating margins through the second half of 2023. We expect adjusted diluted EPS in the range of $2.55-$2.65, including the impact of assumed share repurchases of 5% of our outstanding public float in 2023. Finally, we expect strong full year free cash flow generation above $425 million after capital expenditures, which we continue to expect to be at the lower end of our 6%-8% target range. In conclusion, while we face some near-term headwinds driven by the macro environment, which we can see is driving customers to focus on lower priced products and which has largely driven the change in our 2023 outlook, we are encouraged by our performance relative to our peers as we continue to gain market share in a difficult environment. Accordingly, we remain confident that as macro pressures subside, we will be positioned to fully capitalize on our market share gains and resume our growth trajectory. This, combined with our cost structure that we believe is well under control and which we continue to improve, positions us well as we work towards delivering on our financial targets and creating long-term shareholder value under the Gildan sustainable growth strategy, focused on three key pillars of capacity, driven growth, innovation, and ESG. Thank you. I will now turn the call back to Jesse. Thank you, Rod. Before moving to the Q&A session, I'd ask you to limit the number of questions to two, and we'll circle back for a second round of questions if time permits. Josephine, you may begin the Q&A session. At this time, I would like to remind everyone, in order to ask a question, press star, then the number 1 on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Josephine, we're ready to take questions. At this time, I would like to remind everyone, in order to ask a question, press star, then the number 1 on your telephone keypad. Your first question comes from the line of Jay Sole. Your line is open. Great. Thank you so much. I'm wondering if you can elaborate on, you know, the current market conditions that you're talking about that are unfavorably impacting Activewear. You know, what, what exactly is going on? Is it sort of a customer issue? Is it a consumer issue? If you can elaborate, that'd be very helpful. Thank you. Yeah, I'll, I'll start with that one. Look, and I think, what we're saying is that our market conditions are actually pretty strong ourselves. We're gaining share in the market. The overall market, we think, is down, low double digits in terms of the Activewear in the North American market. We know obviously, we're gaining share with a positive 2%. The real change, and, and I think where we're looking at, is that the customers that are buying products are actually changing the type of product they're buying. They're buying lesser, value-type products. For example, instead of buying a hooded sweatshirt, they're buying a crewneck sweatshirt. Instead of buying, you know, some of the fringe items that we sell, they're buying more basic items. One area we're seeing is a shift back to basic product from, from the fashion product, as, you know, the price points are lower. That's really what's happening. It's, the unit volumes are good. It's just a shift in the mix of product, which is reflecting the actual net selling prices that we sell to these consumers. Our volumes are on track. Our volumes are good. We're taking share in the market, although the market is weak and being challenged. That's really what's happened. Got it. Then, Glenn, can you just talk about, just the, the factory closure and maybe put it in context for us? You know, how the, how that decision came about and, and sort of what the implications are? Well, look, you know, I wouldn't take that factory closure as anything but the continued optimization of our whole manufacturing supply chain, and optimization in terms of really focusing on our back to basics. It's not a capacity-driven thing. We're still running our capacity relatively at the same levels we were in Q1 and Q2 and where we are today. We haven't changed our capacity. We're just continuing to optimize. In these markets, I mean, we're not running at full. You know, like what we said last time is we're running between 85 and 90. We're still at those levels, but we're constantly optimizing our structure, our cost structure, and positioning ourselves to be, you know, low cost as we move forward into the future. It's more of a back to basics approach than anything. Okay, thank you so much. Your next question comes from the line of George Doumet of Scotiabank. Your line is open. Yeah, hi. Thanks. Good morning, Glenn and Rod. Glenn, I think last quarter you mentioned, we're seeing pretty good yield in POS for fleece. I think you mentioned high single, low double. Can you just talk a little bit about how that's that's been trending now? Chuck, Chuck will answer that. Hey, good morning. Yeah, fleece is still trending well. It's not as strong as it was. I think the big thing that Glenn mentioned is sort of we're seeing a mix change between hoods and crews, which, you know, the hoods sell at a slight premium to the crews, so we're seeing more of a mix shift, but fleece is still performing well. The mix shift is significant. Like, you know, just to put things in perspective, the price difference is in the neighborhood of 40% differential in price between a hood and a crew. We're selling the unit volume. The share is going up. We're still in, you know, mid-single digit type growth in fleece. The thing is, you know, the price point of the items from a crew to a hood is significant. It's in the neighborhood of, you know, 40% difference between a crew and a hood. They're just buying a lesser priced item, but we're still selling the unit volume. Okay, that's helpful. Maybe on the 380 basis points of contraction on the gross margin, can you talk a little bit about how much of that was cotton? Just how should we think of maybe, Rod, how should we think of the second half, that recovery in the margins driven by lower priced cotton? Anything you can maybe help us out there just to model that out? Thanks. Okay, George. If you look at the margin, what happened in the Q2 margin, actually, our performance was better than we anticipated, right? We had said last quarter that for the Q2, we would be up 100- 150 basis points over the Q1, and we actually came in a bit stronger. I think we'd say we're very pleased with that overall. If you look at what happened with our margin, actually, mix, as we said, drove a weaker margin overall, probably about 170 basis points of headwind in those numbers. Because of our performance on our cost structure, performance on SG&A and other areas, effectively, we were able to achieve a good operating margin of 16.5%. You look at the fiber impact, we had headwind in the first half, and then as we go into the second half, that abates, and it turns into a tailwind. You look at the Q2, basically, if you look at cotton or fiber on our cost of sales, we still had. Sorry, if you go into the Q3, if you look at what's gonna go on there, we're still gonna have a little bit of a headwind, but it's, you know, as we move through the quarter, basically, you're flat, and then as you go into the Q4, it turns into a tailwind for us. You look at our margins overall, good performance in the Q2. We're very pleased with the way it unfolded. If you look at the Q3, effectively, you get sequential improvement in our margins. If you look overall, we're probably gonna be just below the low end of our target range in the Q3 from an operating margin perspective. As you push into the Q4, we're gonna get to the high end of our target range. Again, our cost structure is really well under control, and that really will drive us as we move into the back part of the year. Obviously, that sets us up very well as we move into 2024. I would say we feel very good about our overall cotton position and our overall cost position as we go forward. Great, thanks for the color. Your next question comes from the line of Stephen MacLeod of BMO Capital Markets. Your line is open. Great, thank you. Good morning. Morning, guys. Morning, everyone. Just, just circling back on that last question about the color you gave on the margins. I, I know you were talking specifically around the operating margin. Do you have any incremental color you can provide around the gross margin and how the balance between gross and SG&A gets you into that, those consolidated margins you're talking about? Yeah, look, if you look at effectively what's gonna go on, it's all really gonna flow through the, through the gross margin, right? As we go into the, into the back half, because all of that cost structure, improvement in cost structure, will be reflected in gross margin. We will have the weaker mix, right? That effectively will continue in the Q3 and the Q4, as we called out for the Q2. Really, you know, if you look at our full year outlook, our, our, our total outlook, and you look at our, our sales outlook and the way we've moved it, it's all being driven by weaker mix. The, the real move from our prior guidance to where our current guidance is, flat to, to down, low single digit. If you go to the midpoint, it's all being driven by weaker mix. We have that weaker mix that is flowing through in the back half, very definitely. Our cost structure is really improving as we move through the year. Effectively, that's, that'll offset it. We get the improvement in margin, as I said. Again, as we go into 2024, you know, we'll see what happens from a macro perspective. We'll see what happens from a mix perspective. Because of that strength in cost structure, we feel very, very good that the setup at the end of the year and as we move into 2024. Okay. That's great. Thank you. Glenn, you mentioned that the overall market's down low, low double digit, but Gildan was up, you were up 2% in activewear. Can you talk a little bit about where you're seeing those share gains? Is it partially driven by the fact that you have such a strong position in basics, so you're capturing that trade down, or are there any other, you know, factors on, in, in influencing that? Well, Stephen, I'll take that. This is Chuck. Yeah, I, I think we're seeing, we're seeing gains in multiple places. I mean, we're seeing gains in the basics, but we're still gaining share in the fashion ring spun area as well. The ring spun's not as, as, moving as fast as it was up a few quarters ago, but we're continuing to gain share against those competitors. Also, we're seeing more in the national accounts that service retail customers. They're more up mid-single digits as retailers have continued to experience improvement in sell-through, and they're doing continued replenishment. And for this, this is, and also in, maybe just to add to that, is our, you know, where our fashion is maybe not as strong as it was. It's still, you know, high single digits positive, but our basics are now, low, single digits positive as well. That was a big turnaround from, you know, what happened in the last previous quarter. We're starting to see people trade down to obviously the basics, which is great. Those price differences, you know, there's, there's probably like a 30-35% gap between a basic and a fashion. It's just like in the same business police category, you know, people are just trading down and looking for value in the market as we see it. We're diagnostic, and it doesn't... I think one other key point for us is, even though there's, you know, somewhat of a shift in buying preferences from a crew to a, from a hood to a crew or a fashion to a basic, you know, our manufacturing facilities are able to, you know, be very flexible to be able to support whatever's selling, right? Because it's all made on the same equipment, which is a key part of our flexibility and our overall manufacturing processes. We've adapted to these types of changes, and we're continuing to service whatever the customers are buying. Great. Thank you. Your next question comes from the line of Luke Hannan of Canaccord. Your line is open. Thanks. Good morning, everyone. I just wanted to ask a question on what the promotional environment is like. It sounds like the, the change in guidance is more related to, as you mentioned, Glenn, the fact that people are trading down. It sounds like volumes are still, still fairly healthy. I'm just curious to know if you are seeing anything from your competitors on the promotional side of things, whether now, with consumers trading down, do you expect there to be a little bit more competitive pressure to be able to capture that customer? Well, we've, we've seen some pricing action, particularly from some of the brands in the fashion category. However, you know, even after they've, you know, adjusted some of their pricings, we're still significantly below them, you know, in the tune of, you know, 20-25% in certain cases, right? We're, we're, you know, we're, we're positioned well on price. With our product portfolio and all the different price points that we have, we think we're well positioned that, you know, we'll see our price deteriorate on mix. We won't see it deteriorate because we're lowering prices. I mean, I think is that's the way to look at how we're positioned. In other words, if, if you look also at the, the rest of the competitive set, I know you've mentioned before in the past that there's been this lever where you guys can, can take price because you're seeing inflation, not just on fiber costs, but on a, a variety of different cost buckets. As it stands today, are you seeing any evidence of competitors more broadly, looking to take price as a result of those, that, that cost inflation abating? Well, I, I don't know if it's so much cost inflation, but I think that from, you know, like I said, some of our fashion competitors have lowered prices but are still significantly above us. It may not be because of inflationary reductions, but it's maybe more from business, bad business. I mean, you know, I think that they're losing significant share. We're gaining share in this market. One of the things that we just mentioned earlier is that the market's down, you know, it's low double digits, and we're positive, you know, single, low single digits. I mean, so we're obviously taking share, and, you know, there, there is a reaction. You know, we're, we're positioned ourselves perfectly because of our product portfolio, the different levels of pricing. You know, basics are coming back now. You know, we're diagnostic of what's being sold. I mean, a hood, a crew, I mean, we really don't care, and we're taking share. I think we're well positioned. I think more importantly, even one of the things that Rod said, that even with this mix, which is factored into our forecast, you know, we'll be at the high end of operating margins in Q4. You know, we would have been higher than that if the mix obviously would have been better because you would have added a couple of, like Rod said, you know, the impact is 200 basis points or 170, for example, in Q2. We would have been higher than even the high end of operating margins in Q4, but we're still there. We're well positioned. You know, we have a, a good cotton position. We have good visibility in our manufacturing. You know, as we continue to move into the future, despite the, the mix change, I think we'll be well positioned to move into 2024. Okay, thank you. Your next question comes from the line of Vishal Shridhar of National Bank Financial. Your line is open. Hi, thanks for taking my questions. Just on the comments about being down 12%. Can you maybe elaborate on that? Is that industry units? Is that industry sales? How does that reconcile with what you saw last quarter when the April trends were down, call it, you know, flattish to slightly down? Maybe you can give me the time period of that particular data point that you mentioned. Well, I think last quarter we said we were slightly down. You know, this quarter we're positive mid, low single digits. What we're referring to is that the overall market is down, you know, low double digits, basically. I think that's the question, is the actual market itself and the conditions within the market. We're gaining share, within this market, and that's, if that answers your question. Yeah. Is that market, that's market in units? Is that, that's for- Yeah, that's all unit. That's all units. units. Well, that's for the quarter. For the quarter? Yeah, units for the quarter. How, how would July trend? Worse or stable? Well, July for us is trending better. We're mid-single digits positive on our Activewear products. Our underwear and sock products, because of the new launches, we're basically probably low double digits today, and we expect that to actually grow to, you know, probably high double digits as we move into the future of, you know, Q3, Q4, as we continue to see momentum on our new products. Also, you know, July is, like, mid-single digits for us. You know, as we also move into Q4, you know, we're gonna be comping, you know, easier comps for us. You know, we should see that grow a little bit as well, just from a comp perspective. We're continuing to take share. I think we're taking more share in beginning of Q3 than we did in Q2. Okay. with respect to, the mix shift, is that something that you deem to be more of a, like, a base that we should, we should reflect permanently in our earnings forecast? Or is this more of a transient thing, and next year that mix might come back a little bit, or we're gonna have to lap that in Q1, Q2 kind of thing, and we should build our earnings off this new guidance you provided? No, look, look, I think it's not structural. I think it's gonna come back. It's just, it's a risk-off type environment, where, you know, when people have to make a decision to buy something, they're gonna buy the thing that probably is the least risk for them, and also looking at potentially, margin impact in terms of what the end use would be or the end selling price. There's... You know, in our cases, you gotta remember that, you know, we sell T-shirts, and we sell them to distributors, they sell them to a printer, who sells them to somebody else, and, you know, they go down. The average shirt that, you know, we sell for, you know, $2.50 ends up at $25, right? It's going down the pipeline. You know, people are looking not to be stuck with inventory. It could be a souvenir shop, for example, where they, they had tank tops or pockets or long sleeves or, you know, hoodies, for example. They, they don't wanna take that risk. They're, they're taking the risk off themselves in terms of their purchase habits today because of the macro environment. That's all gonna work itself out. I think that that's, that's part of what we're seeing. I think it's all driven by really the uncertainty in the environment. Ultimately, I think people will revert back to a normal behavior as we see things subside. Thank you. Your next question comes from the line of Brian Morrison of TD Securities. Your line is open. Yes, thanks very much. Question for Glenn or for Chuck. With the dichotomy here of your market share gains relative to the decline of low double digits for the industry, how's the channel inventory looking for both your products and maybe the industry in general? Is there more destock that has to take place, or are we now in a pretty lean position? Well, look at that. Look, the inventory in at the end of Q2 was flat to Q1. It was slightly higher than we anticipated. You know, we believe there will be some destock in the back half of the year. It's in our plan. Okay. I guess, two small questions. The sub 10% SG&A margin, is this achievable on an annual basis? If so, is that sustainable? Rod, maybe free cash flow. What's your working capital assumption with your free ca- cash flow guidance? Will this be positive for the year? Yeah, now, look, if you look at SG&A, you know, right now, if you are out there, we have a target of around 10%. We did 10% last year. This year, effectively, it's gonna be around that level, right? As we finish the year. This quarter, we did 9%. As we go forward, I mean, we're gonna try and drive those levels, but I think given what's going on from an overall sales perspective, you get a bit of a deleverage. I would say longer term, where we really are trying to drive down below that 10% level, Brian, when you think about SG&A, and we think we can do that. We think as we continue to grow and, and given what our, our business model is, we can get operating leverage off SG&A, and that's a real competitive advantage for us. Again, we're very focused on it, and we see it as an area that we can manage well as we go forward. On the, on the free cash flow, for the, for the, full year, free cash flow, we're calling above $425 million. Effectively, if you look, in the Q1, we had negative free cash flow. We had good free cash flow in the Q2, and we expect good free cash flow in, in Q3 and Q4. If you look, you know, versus last year, we had inventory build, going on. Now, we do not have inventory build overall, where... As we talked about earlier, inventories are, are coming down, and that provides good support to, to free cash flow. I would say, you know, we feel very good about our free cash flow, and, you know, that supports our, our competitive position in the market. We've got a strong balance sheet, and what we're very pleased about is that we can return capital to shareholders. We had good return this past quarter, and we're planning for good return as we go forward with the announcement of the new 5% NCIB program. Yeah. No, that's very helpful, Rod. Just the question, you have $325 million of negative working capital in the first half of the year. Where will that end at, by year end? Will that be flat, positive? If you look at working capital, basically, if this quarter, we're around 45%-46% of sales, right? If you look at it on a, on a LTM basis. What we called out in prior calls, and we're still focused on it, is effectively working capital at around 35% by the end of the year. We will drive that working capital basically to the, you know, our, our, I would say, closer to our target level as we get to the end of the year. So we do feel, you know, good about the way that's unfolding. Thanks for the color. Your next question comes from the line of Martin Landry of Stifel. Your line is open. Hi, good morning. I just wanna come back on the guidance revision. You know, you, your sales for the quarter came in ahead of expectations. Your, your point of sale trends were positive in Q2 in North America. I'm, I'm wondering what, what's driving the... What's changing in the outlook? Are, are things decelerating in July for you to revise your guidance lower? Anything, anything would be helpful just to understand given the, the, the positive trends you've seen lately. Yeah, I mean, the simple way to think about it, Martin, overall, is it is the mix that's driving effectively the change in the outlook for the full year. Yeah, we, we came in better than we anticipated for Q2. That was driven by volume, as we talked about, the, you know, positive POS and Activewear overall, flat POS in, in Underwear and, and hosiery, which is improving now as we go into the, into the back half. Glenn talked about the distributor inventory, and the channel was flat, but it came in a bit higher than we anticipated. You know, that'll reverse out as we, as we go through the back half. It's mix. Mix is the real driver, ultimately, of what's going on in the forecast. If you look again for the full year, the full change in our outlook is driven by mix, we'll see that in Q2, and we'll see it in Q3. Well, you know, the POS is actually performing well, as we've talked about, and we're driving market share gains and volume. If you look full year, it's exactly where we expected it to be. You know, we feel very good about the business overall. This shift in the marketplace that's going on to lower price point products, obviously, we're dealing with that. The, the good news is we have the broad range to be able to deal with it, and we have the cost structure to be able to deal with it. We are well positioned as we move through the end of the year into 2024. Okay, just, just to follow up, just to better understand that mix shift, is it happening across all your end markets? Because you do have end markets that are, that have very different dynamics. You have some that are more recession resistant and more, some that are more cyclical. Just trying to understand a little bit, is this across the board or in, in certain end markets? Martin, I would say it was across the board. It's, it's pretty consistent across the markets and categories. Okay. That's it for me. Thank you. If you would like to ask a question, press star, then one on your telephone keypad. Your next question comes from the line of Chris Lee of Deutsche Bank. Your line is open. Oh, good morning, everyone. Maybe just one, one question left from me, and it might be a, a difficult one to answer, but, you know, I'm just curious to see how confident you, you are that, you know, the, the, the cut is sort of, that's it. Like, what are sort of risks that can cause guidance to revise further lower in the back half? Just wanted to see, you know, where-- how confident are you are in terms of what's on the revised guidance. Thank you. Okay, Chris, thanks for the question. If you look overall, effectively, as we said, we've given you a range for, for the full year. If you go to the midpoint of the range, we, you know, what we see, the, the, the mix, changes that are occurring, effectively, that drives us to the midpoint of the range. If you go to the low end, there's you know, obviously, what we've effectively done is reflected macro uncertainty. Actually, even a little bit of that is in the, probably in the midpoint. We really do feel that we've de-risked the back half with our forecast. What we tried to do is give you what we think is a very good baseline for the overall environment, the shifts that we're seeing, on with respect to the consumer, how they're effectively trading down. We factored in some, as we said, macro uncertainty because we know the environment is tough to forecast. It's tough to know exactly what inventory levels people are going to carry, especially as, as the year unfolds. I would say we feel like we really have de-risked the forecast for the full year, and we feel good about delivering. Actually, we, we feel good about performing against it. As we said, as we come out of the back end of the year, we feel we're very well set up for 2024. Okay. Thanks, Rod, and all the best. Thank you. Your next question comes from the line of Paul Lejuez of Citi. Your line is open. Hey, everyone. This is Brandon Cheatham on for Paul. I just wanted to see if you could give us a little more details on the underwear business you've gained. You know, as it relates to the Bangladesh facility opening early next year, you know, are you having any other conversations with potential customers to try and utilize that capacity that's gonna come online? Well, I'll answer. I mean, look, the underwear programs have been rolled out, a little behind schedule, I would say, in terms of actually not from our perspective, but just when, how long it took for us to get the floor set at our retail partners, but they're doing very well. We're continuing to get new opportunities as we move forward. Look, Bangladesh for us is a key part of our whole strategy. I mean, look at the plant is starting this quarter. It's gonna be ramped up to about 25% of its full capacity by the end of this year, which is factored into all of our working capital assumptions, our inventory levels, et cetera. And at the same time, it's gonna really give us the ability, to strengthen our cost structure and, really go after gaining share, in not just in our underwear categories, but also in the fashion basics, as well as our international markets. It's really gonna be, you know, something I think that's gonna be, very important, in terms of the overall manufacturing cost structure for Gildan as we move into, 2024 and 2025. You know, it's, it's gonna give us room to, to go after new programs. We actually have a stream of, of programs we're looking at as we move into 2024. A lot of this, these types of programs will be supported by as, as we ramp up, Bangladesh. Got it. And how do things shift around as that comes online? Do you shift your underwear business over there kind of wholesale, or is it really piecemeal, depending on how these conversations go? we already make a lot of our underwear in Bangladesh today, you know, because we, we still have other operations there. you know, underwear is, is, is being made in, in that hemisphere today, as well as a lot of our fashion shirts. all of our incremental, you know, fashion, basics, underwear, all of our growth will be supported really by, the, the, the development of Bangladesh as we move into the future. Got it. One more, if I can: You know, with the shift away from fashion, more towards basics, are you able to shift what you're manufacturing to kind of meet that demand? Like, how quickly can you change things so that you don't get over-inventoried in, you know, a category that isn't selling through as, as well as you had hoped? Well, our cycle time is five weeks, so it's doesn't take very long. I mean, we've already adjusted all of our manufacturing. All of the products in which we manufacture, if it's a T-shirt, the fashion shirt, the basic shirt, they're all made on the same machine. We can adjust our equipment. In the case of, you know, our fleece, where we make a hood of a crew, it's all made in the same factory. There's just less operations, you know, to make a crew than a hood. In sewing, it's a little more difficult to go from, you know, making more hoods and crews because it takes more labor to make a hooded sweatshirt. It's a lot easier going to make more crews, to be perfectly honest with you. We have lots of flexibility in our manufacturing. Our cycle times are relatively short. We've adjusted our manufacturing to reflect all of these types of changes on a daily basis as we get POS from our customers, and it goes to our planning groups. Our planning groups make the adjustment, and our manufacturing groups respond to whatever is being sold in the market. None of that is really an issue for us. You know, as, as we said before, look, we're well positioned. You know, we have good visibility, despite the fact that, you know, we've seen some of these mix changes. You know, we're gonna be driving at the high end of our operating margins as we move into Q4 with our cotton position. We've got a good visibility on our cost structure as we move into 2024, even with this type of mix. We're, we're well positioned, and we're excited about as we go into the future. Got it. Appreciate it. Good luck, guys. Thank you. Thank you. There are no further questions at this time. Ms. Jesse Hayem, I turn the call over back to you. Okay. Once again, we'd like to thank everyone for joining us this morning, and we look forward to speaking to you soon. Have a great day.