Hanesbrands Inc. (NYSE:HBI) Q4 2022 Earnings Call Transcript

Scott Lewis: And we’re seeing lower commodity costs, lower freight costs, all that, again, the units that we were producing today, that well, again, as we talked about, in the earlier remarks, from a margin standpoint, as you look over the course of the year, I’m very encouraged with the trends, you’re going to see a sequential improvement in margins throughout the year as we are again, selling off the higher cost inventory in the first half. And as you get into the second half, especially in the fourth quarter, you’re going to see some really more of a positive margin trends as we go into late in the year as we move into next year. Also we have foreign currency, from a transactional standpoint, some headwinds into the in the first half, that will subside in the back half. So again, a lot of positive trends that we’re going to see in March and as you move into the latter part of the year.

Steve Bratspies: And the one thing I would just add to that Scott also is a couple 100 basis points headwind from the timeout that we took in Q3 and Q4 of last year. So you don’t have that headwind as well. So when you take that headwind going away, when you take the change that we’re seeing right now, we expect to see, as you said, the sequential margin improvement going forward.

Scott Lewis: And the cost savings initiatives, all these things are adding up to really a positive trend as you look late in the year and as you move forward.

William Reuter: Okay. And I guess related to that, the timing lag between when cash costs are incurred versus when those hit the P&L? What’s that lag typically like?

Steve Bratspies: Around two to three quarters, depending on the product.

William Reuter: Okay. And then just lastly, for me you mentioned addressing the 24 in the first quarter, is there a situation or set of circumstances where you would consider addressing the 26 is at the same time?

Steve Bratspies: I would say right now we’re focused on the 2024 maturities.

William Reuter: Got it. Okay. Thank you very much.

Steve Bratspies: Thank you.

Operator: Our next question comes from the line of Carla Casella with JPMorgan.

Carla Casella: Great. Follow on to Bill’s question around that refinancing. Your thoughts and whether you’re looking in the bank market versus the — you have capacity to do unit banker bonds or secured bond.

Michael Dastugue: Yes Carla, this is Michael. As you can appreciate, we can’t really discuss that at this point. But we do think that we have flexibility to access a number of the markets.

Carla Casella: Okay, great. And then a couple of cost questions. The facility timeout, is that all behind you now? Or could that also affect 1Q?

Michael Dastugue: That’s all behind this. We recorded all the charges costs associated with that in 2022. There’s nothing going forward. No impact 2023.

Carla Casella: Okay. And then on SG&A, I think I heard it correctly that you expect the dollar amount of SG&A to be up year-over-year. And I’m just I was a little surprised given all the work you’re doing around full potential. So could you just give us a more clarity there?