Financial Data and Key Metrics Changes - The company reported third quarter sales of $911 million, a 2.2% year-over-year increase, aligning with previous guidance of low single-digit growth [10] - Activewear sales increased by 5.4%, driven by favorable product mix and higher net prices [10] - Adjusted operating margins improved to 23.2%, reflecting an 80 basis point increase year-over-year [12] - Record adjusted diluted EPS of $1.00 was achieved, marking a 17.6% increase compared to the same period last year [5][14] Business Line Data and Key Metrics Changes - Sales in the hosiery underwear category decreased by 22% year-over-year, attributed to shipment timing shifts and broader market weakness [11] - The Comfort Colors brand performed well, celebrating its 50th anniversary, and contributed to overall sales growth [7] - The company introduced new brands such as AllPro and Champion, which are expected to drive future growth [6][10] Market Data and Key Metrics Changes - International market sales declined by $4 million, or 6.1% year-over-year, primarily due to ongoing demand softness [11] - Sales to North American distributors remained solid, supported by sustained momentum from national account customers [10] Company Strategy and Development Direction - The company is focused on executing its Gildan Sustainable Growth (GSG) strategy, emphasizing operational agility and innovation [16] - Plans for the integration of the proposed acquisition of HanesBrands are underway, with expected run-rate synergies of at least $200 million [8] - The company aims to capitalize on its largest innovation pipeline in history, with more product launches planned for 2025 and 2026 [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver strong financial performance despite a fluid macroeconomic environment [5][18] - The outlook for 2025 includes revenue growth in the mid-single digits and an increase in adjusted operating margins by approximately 70 basis points [17] - Management noted that the market remains stable, with expectations for growth in the innerwear category in Q4 [23][45] Other Important Information - The company announced a private placement offering of $1.2 billion in senior unsecured notes to fund the proposed acquisition of HanesBrands [14] - Operating cash flow for the first nine months of 2025 was $270 million, with free cash flow guidance updated to approximately $400 million [15][17] Q&A Session Summary Question: Can you talk about the weakness in the Underwear business and market share? - Management noted that the innerwear business faced delays in floor sets by large retailers and inventory management issues due to tariffs [22] - They expect a return to growth in Q4, with a stable market outlook [23][24] Question: What is driving the change in free cash flow guidance? - The decrease in free cash flow guidance is attributed to transaction costs related to the HanesBrands acquisition and timing of working capital [28] Question: How is the fleece business trending? - The fleece business is performing well, with sales meeting expectations as the season progresses [37] Question: What is the competitive landscape like? - Management indicated that the competitive landscape remains stable, with no significant changes observed in recent quarters [97]

Summary of Key Points from the Conference Call Industry Focus - The conference call primarily discusses the **US-China trade relations** and the implications of **tariff policies** on global trade patterns, particularly focusing on **Asian economies** and their trade dynamics with the US. Core Insights and Arguments 1. **Impact of Government Shutdown on Data**: The lack of data due to the government shutdown complicates the measurement of US effective tariff rates, leading to a focus on trade trends between the US and China instead [7] 2. **Supply Chain Strain Hypothesis**: The hypothesis that product complexity, rather than tariff levels, is the primary driver of trade patterns is supported by recent data [7] 3. **US-China Trade Equilibrium**: A more stable US-China trade equilibrium is expected to be established in 2026, with Chinese market share of US imports stabilizing around **10%** due to China's leadership in key supply chains [12] 4. **Tariff Dynamics**: The US is likely to maintain higher tariffs on China compared to the rest of the world, with rates in the **20-45%** range, as part of a strategy to de-risk from key supply chains [10] 5. **Negotiation Framework**: Progress in US-China negotiations is expected on various topics, including maritime logistics, agricultural trade, and export controls, aligning with the anticipated negotiation framework [11] 6. **Supply Chain Reorientation**: The shift in supply chains has been categorized into three phases, with the current phase (2022-2025) focusing on regional production bases globally due to rising labor costs and supply chain risk mitigation [20] 7. **Tariff Effects on Trade Patterns**: The initial response to tariffs has been a diversion of trade around Asia rather than to the US or Mexico, indicating a significant impact of tariffs on trade dynamics [22] 8. **Product Complexity as a Trade Driver**: Analysis shows that product complexity is a better predictor of trade shifts than tariff levels, with less complex products experiencing a greater contraction in imports [25] Additional Important Insights 1. **Market Share Shifts**: There have been notable shifts in US imports from China to countries like India and Vietnam, particularly in sectors like smartphones and laptops, indicating a potential mean reversion in trade data [14][19] 2. **Long-term Supply Chain Challenges**: The success of onshoring production to the US will take time due to high labor costs and the lack of a comprehensive supply chain ecosystem in the US [21] 3. **Chinese Export Capacity**: China accounts for over **50%** of global capacity for approximately one-third of US imports, making it challenging for the US to diversify away from reliance on Chinese goods [30] 4. **Tariff Convergence**: As Chinese tariffs converge with broader Asian tariffs, the incentives for trade diversion are expected to diminish, emphasizing the need for supply chain efficiencies [27] This summary encapsulates the key points discussed in the conference call, highlighting the ongoing complexities and dynamics of US-China trade relations and their broader implications for global trade.