Welcome to the Q3 2017 Gildan Activewear Earnings Conference Call. My name is Vanessa, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we'll conduct a question-and-answer session. Please note that this conference is being recorded. I will now turn the call over to Sophie Argiriou. You may begin.

Thank you, Vanessa. Good morning to all and thank you for joining us. Earlier this morning, we issued our third quarter press release announcing our earnings results. We also issued our interim shareholder report containing management's discussion and analysis, and consolidated financial statements. These documents will be filed with the Canadian Securities and Regulatory Authorities and the U.S. Securities Commission, and are available on our website at www.gildan.com. On the call today, I am joined by Glenn Chamandy, our President and Chief Executive Officer; and Rhod Harries, Gildan's Executive Vice President, Chief Financial and Administrative Officer. The conference call will begin with Rhod taking you through the results for the quarter and our business outlook for the year, after which a Q&A session will follow. Before we start, let me remind you that certain statements included in this conference call may constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. 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 U.S. Securities and Exchange Commission and Canadian Securities Regulatory Authorities that may affect the company's future results. And with that, Rhod, I will turn the call over to you.

Thank you, Sophie. Good morning, everyone, and thank you for joining the call. This morning, we reported third quarter adjusted EPS of $0.53, up 6% over Q3 2016, and consolidated sales of $716 million, which came in essentially in line with last year. We were pleased with the strength of the Printwear business, which continued to perform well in the growth areas that we're pursuing, including continued strong gains in the higher price, higher margin, fashion and performance product categories and solid growth in international markets. American Apparel was also accretive to earnings in the quarter, as we continued to make good progress on our integration plans for this business. Production of American Apparel products is ramping up nicely. Our new West Coast distribution center is now fully operational. E-commerce, marketing, and merchandising teams are in place. And early in the third quarter, we successfully launched the direct-to-consumer e-commerce platform for this brand. While we did see softness during the quarter within our Branded Apparel segment, specifically in our sock business, where the combination of weak market demand in this product category, tighter retailer inventory management, and lower-than-expected POS from transition to a new sock program contributed to a year-over-year revenue decline in Branded Apparel. That said, the combination of stronger margin performance in Printwear from more favorable mix, the earnings contribution from American Apparel, and lower income taxes more than offset this impact during the quarter. We also continued to generate strong free cash flow in the third quarter, with the year-to-date levels of free cash flow coming in ahead of plan. Consequently, with strong adjusted EPS to date and stronger cash generation, we raised our EPS and free cash flow targets for the year. Turning to our segmented results, we grew Printwear sales by 4% to $481 million…

Thank you, Rhod. That concludes our formal remarks. Before moving to the Q&A session, I ask that you limit the number of questions to two in order to give everyone the opportunity to question. We'll circle back for a second round of question, if time permits. I'll now turn the call over back to the operator for the question-and-answer session.

Thank you. And we have our first question from Kenric Tyghe with Raymond James.

Thank you. Good morning. Glenn, if we could just speak to the performance in the sock business. Was there an issue with respect to the switchover and perhaps some packaging changes or otherwise at that particular mass-retailer that caused some dislocation more than just some of the new product introductions you're mentioning? It just seems that the headwinds are perhaps even greater than would have been expected or greater than perhaps we're following. And any other color you can share with respect to the sock performance and the market share performance in the quarter?

Okay. Well, first of all, like Rhod said in his commentary that socks in general were down, particularly in the department and specialty stores, which was quite a significant downturn for us. I think when it comes to the mass, two things have happened. One, by repositioning our sock to higher prices, we obviously have lost a little bit of market share. We did have some pick-ups in terms of launching the product, in terms of getting it out to market and doing the reset. And those are really the factors I think that contributed to the loss of market share. So, I would say, even on a going forward basis, just where we're positioned at the higher price point, we won't be able to maintain the share we had. But we think that we're positioned to continue driving our brand strategy because, look, we want to develop Gildan as a premium brand. We're positioned today with an open pack, much better quality sock, ring-spun, so it fits more in terms of where we think we need to be positioned long-term and building our overall brand strategy. So, we're still very confident in our strategy and, look, at the end of the day, we're continuing to win our underwear businesses, really which we think is a number one, most brand-oriented segment in the channel, continues to do very well in the market with a 20% gain in share despite the heavy competition from back-to-school against from our competitors. So, we're very confident, we're comfortable with our positioning and we're very – still continue to be excited about the future outcome of the brand strategy at mass.

Thanks, Glenn. If I could just switch gears to Printwear, could you provide us with an update on how the fleece orders are evolving? And clearly, your EPS guidance sort of indicates you seem pretty confident with how that is evolving, but could you provide some update as to the fleece order patterns and where you stand at this point?

Well, our fleeces are doing very well. I mean, we've seen actually a pretty good tick-up in market share so far this quarter – I mean, in the month of October, which is really where we start seeing the height of the sales season. So, we're on track we think to achieve our plans. I mean, it's reflected in obviously our guidance that we sent to the market. So, I would say that overall, Printwear fleece is on track. I mean, the overall business in Printwear is good. Our POS is positive in all categories, driven by – except for the basic T-shirts, but our performance and fashion shirts are doing very well. We've seen great growth in international. Pricing is stable. We've got basically a good balance of inventory in the channel. So, I mean, our Printwear business is doing very well as we speak today.

Thank you. I'll leave it there.

Thank you. Our next question comes from Anthony Zicha with Scotiabank.

Yes. Good morning. Glenn, could you please provide some color like on the sock market compared to the underwear market? Could you give us some insight on the consumer behavior; are they buying one product more online than the other, rather than visiting the store?

I think that in both categories, both socks and underwear, I mean if you look at the market share on online sales, it's still relatively small today. It's in the 6% range and a lot of that is much higher end type products. I think what's the difference between socks and underwear is the one is more brand-driven and which has particularly been the underwear market, where private label has not been a major factor; where in socks, there's a much greater amount of private label out in the market. And those are really, I think, the two differentiations between the two categories. But in both cases, I mean they're very competitively priced, and online is still not a major factor in the category.

Okay. And then, with reference to the storm impact, is it possible that we could quantify the impact on retail versus the Printwear? And also, can you give us some color on the pricing increases, if that was the case at the retail level on different products?

So Anthony, it's Rhod, on the storm impact, I mean we – really it impacted in a few different places, right? We saw – as I called out on in the script, the weaker traffic trends, probably that were sort of compounded by the impact of the storm, particularly in the Southeast U.S. So, one, you've got it on the sales side; and then secondly, we did see a little bit of impact on supply chain from a cost perspective. So, if you look at the storm impacts during the quarter from a sales standpoint, a little bit of an impact and then some costs coming through. I would say, what we're seeing probably this quarter and flowing through in the next couple quarters is probably about a $0.01 impact related to the storm.

Okay. Super. And then one last one, considering the challenges in the retail environment, Glenn, are you seeing some potential M&A activity becoming more attractive than it was, let's say, a year ago?

I can't answer that, to be perfectly honest with you. I think that as far as we're concerned, we usually adapt to market conditions, and as we go forward, we're going to continue to drive our strategy. We think we have a lot of runway still. We're going to leverage our infrastructure on everything we've built today. We're looking forward expanding our top line organically. Even despite the pressure we're having this year, we think we still have a lot of opportunity to continue to expand within the position that we have as we continue to drive our underwear strategy and reposition ourselves in sock. So, we're pretty comfortable with driving our forward as we go forward. And also focusing on margin expansion, SG&A, leverage, and making sure that we increase the profitability of our Branded group as we move into 2018.

Okay. Thank you very much.

Thank you. Our next question is from Mark Petrie with CIBC.

Hey. Good morning. Just I wonder if you could just follow-up on your comments with regards to socks and how you sort of reposition the product at higher quality and higher price points. Is that something that you are actively pursuing in terms of the underwear positioning at mass and...

Well, our underwear positioning at mass is relatively stable, but what we're doing is we're developing a lot of new products right now. So, we have different categories in underwear. So, we've launched some new products in 2017, some stretch products, for example. We're looking to expand on that as we move forward into 2018. And we did raise our prices in the beginning of the year, so we have – our price point is up a little bit in retail, which has not affected our sell-through at all. And so, we're well-positioned and we're going to continue to move one day at a time, and kind of keep building our platform basically and leverage our opportunity as we see going forward.

Okay. Thanks. And then, I wonder if you could just provide a bit more color in terms of the gross margin. That number has been reasonably volatile. How do you feel about the pricing today? And I know you don't disclose relative hedging levels. But can you give us a sense of how you expect the gross margin and sort of pricing versus cotton cost to play out Q4 into 2018?

Well, I'd just say that we've taken a price increase early in the year. So, our pricing in cotton are in bounce as we see today. So, we're fairly very comfortable with our positioning as we move into 2018.

Okay. And then I guess just so we understand, your relative cotton costs from Q3 into Q4, I understand the pricing is stable, but your relative costs, did those change or those still – I guess, are those still adding up basically?

Our costs in Q3 and Q4 are higher than Q1 and Q2. Yes, that answer is yes, slightly higher. And we've reflected – our pricing strategy will reflect the increase in cotton costs, and on the go-forward basis, everything will be balanced and in line.

Okay. Thank you very much.

Thank you. Our next question is from Martin Landry with GMP Securities.

Hi. Good morning. You mentioned on the American Apparel that you're rolling out your direct-to-consumer platform. I think you've done that in October. So, wondering where – how many countries is this available? And what's your target in terms of percentage of sales that will come from e-commerce for American Apparel.

Well, I would just say, let me just tell you a little bit about the American Apparel, because at the end of the day, we don't know how big is big, to be honest with you, with the brand. We just started off. Basically, we're on track this year to achieve our goal in the first year. But you got to understand what we've done so far and think how well we're performing with the acquisition. I mean, since we've bought the company and really just taking it back, we just bought the intellectual property and about $10 million worth inventory. And today, we've launched over 700 styles and leverage really our supply chain basically to implement and start producing all these products. I mean, there is nobody in the world that could have pulled that off basically in this timeframe that we did it. We've opened up our new distribution center in L.A., basically which is going to server as our print channel, but as well as all of our direct-to-consumer for the U.S. market. We're expanding as we going forward, because I think the thing with American Apparel is it's just not a direct-to-consumer strategy, that's what's incredible with this brand, it services both house of our distribution. So, we're expanding our distribution as we go forward into 2018 domestically, but very aggressively internationally. I mean, we have a lot of opportunity, we've opened up distributors in every single country in which we operate, have all been gravitating towards and excited about the brand. We launched our direct-to-consumer strategy in the U.S., and you can go on our website and see exactly the look and feel, and it's doing very well. We're excited about it, and we're launching our direct-to-consumer strategy in international markets as we go forward into 2018, and we're also setting up our marketplace strategy as well. So, we have different areas of opportunity for us. So, we got a pretty good runway ahead of us in terms of the brand itself, the opportunity, we're really excited about it. And this is just another way about, how we are positioning ourselves in our company to be very tactical and make good acquisitions, and basically leverage them and leverage our infrastructure to get high returns on capital for our shareholders. So, I can't tell you how big it's going be, because if I told you, I'd make you a little nervous. But at the end of the day, we think it's quite a large opportunity for the company as we go forward.

Okay. Because I think, last quarter, you're talking about the goal of sales for this year of $50 million to $75 million. It looks like you're tracking around $33 million so far. But given all the rollout that you're doing, I mean maybe don't give us like a guidance longer-term, but is it fair to say that there is a potential for your $50 million to $75 million goal to double in sales next year?

I would say that we're on track to achieve our goals for this year, and we're definitely on track to have significant increases as we go forward into next year.

Okay. Okay. Thank you.

Thank you.

And our next question comes from Stephen MacLeod with BMO Capital Markets.

Thank you. Good morning.

Good morning.

Good morning. I just wanted to just draw down a little bit on the socks performance in the quarter. Can you talk a little bit about why demand is weaker? Is that just traffic, is there something going on – something else going on in the industry for the category that you can point to?

Well, we can't – look, I mean I can't answer why demand is lower, but the overall category is down across the board. It could be weather related. It could be just a structural change in the way people's behaviors and what they're wearing on their feet. But at the end of the day, I mean that's something that obviously could be cyclical, we just don't know. So, maybe that answers your question. But I mean we know definitely when it comes to the more formal socks and people are wearing swiftly today, a little bit more casual. I think that there's a lot more of casual socks in the department and specialty stores today, which put a little pressure on our traditional Gold Toe brand. But overall, the category seems to be trending down, maybe it hits bottom, but we'll see as we go forward.

Okay. That's helpful. And then, on the underwear side, you cited some good sales of Gildan branded men's underwear. Can you provide any numbers around where you think your share is and what you think is up sequentially or year-over-year?

Our share is up about 250 basis points from last year.

So, 11% in September, Stephen, up 250 basis points as Glenn said. So, a 20% increase in share overall.

Okay. Okay, great. And then just one final question, just on the Printwear business, obviously, some puts and takes by category. But can you talk a little bit about the weakness around basics, like what was the driver of basics being down in the quarter?

Well, look, I mean at the end of the day, it's – you can look at it in different ways is that, look, we sell – the price of a basics shirt, it sells for a lot less than a fashion shirt, right? So, the market is trending towards fashion which in theory, in Printwear is great for us, because that means that the price elasticity is there and consumers in that category are spending more money to buy the products. They're looking for better features, better garments. So, even our fashion basics, I mean really the big difference between the fashion basics and the basics is the fabrication and sometimes it's a little bit the fit. So, really, we think this is very positive for us, because overall our POS is positive, but yet we're leveraging the higher price, higher margin products, which is ultimately providing better returns as we go forward. And I think we saw this coming for a long time, and if you look at the company and that's part of our success is that we invested very long, strategic opportunities, and our whole yarn investment strategy which we set forth two, three years ago to invest $400 million in yarn, a lot of that yarn capacity was built to support which we thought was the growing area in the market, which is this fashion basics, and that's what's allowing us to get these great returns on capital. And we also combine that I think within our acquisition strategy, which I think has been very tactical. And if you look at what we've done over the last, let's say couple years, we've bought three, four great companies. We've paid very low multiples for these companies. We've got very high returns on capital with very low risk. We leveraged really our supply chain. We've driven our organic sales plan. I think that's important thing is that all these acquisitions that we've achieved are what's shaping Printwear today and allowing us to continue to have strong earnings as we move into 2018. These acquisitions have given us new product categories, new brands like American Apparel. We've added capacity like Swift. We just purchased Swift and also Alstyle. We've entered new markets and new channels of distribution. So, all – everything we're doing today with either our capital investments or our acquisition strategy really will position ourselves, we think as we move forward into the future, to continued strong earnings and growth potential and performance.

Okay. That's great. Thank you.

And thank you. Our next question comes from Derek Dley with Canaccord Genuity.

Yeah. Hi. Just following-up on that commentary on the fashion basics segment, where are you guys seeing – which channels are you guys seeing most of your shelf-space gains coming from?

Well, basically, the channels we defined it as basically basic, which was 60% in the market, and the fashion and performance was roughly the other 40%. So, that 40% part is growing at a much quicker rate. The unit volume is basically just shifting and it's – well, unit volume is going up in general. But the shift is – the growth that's coming in unit volume is coming in from the fashion side, but it's also compounded by higher selling prices and higher margins. So, that's actually a double whammy for us in terms of helping drive earnings as we go forward.

Okay. Great. In terms of that fashion basics and the performance basics market, what channel specifically within those segments are you guys growing in the fastest in that?

Well, it's all going to the Printwear segment. So, the segment services souvenir, rock concerts, restaurants, I mean it's just basically the – it's just a switch in the overall market where people are willing to trade up and spend a little bit more money for a better quality product basically on higher prices.

Okay. And have you seen that 60/40 split, is that, I mean, was that something like 70/30 two years ago or where did that come from?

Well, I would say, five years ago, it was 100% all basic, right, I mean so that's what happens. So, over time this thing has gravitated. And we still have – not the same type of share we have in the basics side, where we have a dominant position. But the capital investments we're making in our brand strategy, our objective is just to align ourselves to have a larger market share in that segment and there's lots of opportunity for growth as we go forward, not just in the U.S., but also in our international markets.

And in the international markets in Europe, fashion basics and performance wear makes up a greater component of the overall margin, is that correct?

Yeah. Fashion is a little bit bigger in Europe than it is, yeah, the split's the other way around; it's probably 60% fashion and 40% basics. So, there we've been sort of competing in the smaller side of the market and now with all these products we have, we're leveraging American Apparel there next year. We've opened up distribution in almost all of our countries in Europe. We're bringing our Comfort Colors brand to the European market, because we've now added up enough capacity, because one of our major capacity expansions this year was in our garment dye area in Honduras, so we can support international sales. So, these are all products, we're bringing our Anvil product, which is doing very well, both domestically and we're going to be leveraging that in the international market. So, we have a whole brand portfolio of fashion products that we'll continue to grow both markets as we go forward.

Okay. Great. Thank you very much.

Thank you.

And our next question comes from Vishal Shreedhar with National Bank.

Hi. Thanks for taking my questions. Just on the licensed brands, I was hoping you could give us some perspective there. Is management pleased with the performance of those contracts? And how should we think about when those contracts expire? What I'm trying to do is to gauge and see if there's any likelihood that these contracts will go away like the private label business did, and if there is any risk to sales from that standpoint.

No. I mean, look, we're growing that category. I think that, in general, there's a lot of opportunity for growth. And one of our capacity expansion opportunities right now, particularly in Rio Nance 6 is to build that plant to be a fashion open with factory, okay? So, we're in the process of building up Rio Nance 6. It's going to be starting in the second quarter of next year. It's going to be the largest plant of its type in the region. It's probably going to have a greater capacity than the whole region itself, just to give you an idea. And these lifestyle brands in which we service, basically I'm looking to gravitate and bring products closer to this hemisphere, so they can respond to their consumer. So, we think we're – again, we're making an investment to support them, but also to support our own fashion basics – fashion business itself by again investing in the proper capital investments to support future sales. So, Rio Nance 6 is going to be a big plus for us to continue driving that segment as we go forward in the future.

Okay. So, it's unlikely that you'll divest some of those brands on a net basis. That business will continue to grow?

No. We're growing that business.

Okay. And I was just hoping you could give us an update on online, maybe percentage of that business that is online of your business in aggregate.

Online? Well, online is doing well. Look, we have a small base right now, so we're going to continue to drive our online strategy. What I said in one of my calls previously, the key thing for us to building our online strategy is actually from the distribution capacity perspective, because to ship online, you really need to be able to ship to the piece. And what we've done in California basically by building our DTC distribution strategy is actually putting in that skill set. So, now what our plan is – as we go forward is to continue looking at ways to leverage that, not just with American Apparel, but also looking how we're going to leverage that with all of other brands which we probably, truthfully have underperformed in that area. That's actually an area of opportunity for the company. It represents both – consolidated it's around 5% of our overall revenues today in Branded, but that's an area where we're probably underperforming the market. And – but what we need to do is we need to make the investment in both, obviously, our systems as well as our distribution capacity to be able to grow it, and that's going to be our plan as we move forward into 2018.

Thank you.

And thank you. Our next question comes from Andrew Burns with D.A. Davidson. Andrew S. Burns - D. A. Davidson & Co.: Good morning. Two longer term oriented questions for you. First on manufacturing automation, it's still increasingly a focus point in the apparel industry. Could you talk about your view on the potential to automate portions of cut and sew process? What investments or technologies are you looking at? Is there a significant opportunity to reduce the labor component of cut and sew over time? Thanks.

Okay. Well, I mean you're talking about the robotic article that's been flying around The Wall Street Journal. Look, at the end of the day, there's no company in the apparel space that's making capital investments like Gildan has done and runs a supply chain as effective and efficient as ours. So, look, we'll continue to invest in capital where we think we can get the returns, and we're also going to make sure that we invest in the technology and be ahead of the curve in any type of new technology that would revolutionize this market. So, I can assure you that we will be the first and foremost to be able to drive any type of new advances in technology. It's still long way away when you read some of those articles. We have a very good pulse on what it takes to produce and develop this type of technology. There are ways to and machines available to, in the interim that we're working on, and especially as we move into more open with fabric and side-seam garments and other things to reduce our cost structure. So, we have a lot of technology which, again, we'll share at our Investor Conference in February next year or early-March, and we're looking forward to explain to you where we're going. But at the end of the day, the capital investments that we made have positioned us to have a unique supply chain that will allow us to continue driving top line sales. Doing acquisitions has been something that's been very effective to us. I mean, we launched 700 styles with American Apparel basically, effectively put into our supply chain in a very short period of time. So, I think we're well-positioned, and I think one thing investors should have is confidence that we are going to continue to make an investment in the state-of-the-art manufacturing in this hemisphere and the world. Andrew S. Burns - D. A. Davidson & Co.: Good color. Thank you. And clearly the retail channel is going through a period of profound change in sales migrate online. I was wondering how you think about the Printwear business model evolving over the coming years. To what extent you think you'll be able to find more pockets of the screenprint business or you will be able to leverage e-commerce and increase the direct to screenprinter transaction versus...

Listen, the world is changing, and at the end of the day, our Printwear business, our Branded business and e-commerce business is becoming one market. I mean to give you an example, if you go on Amazon and you Google, Comfort Colors, there's 7,000 hits on Comfort Colors today. We don't sell Comfort Colors. I mean, it's all resellers who are selling the product. So, this is becoming a big diversion of these marketplaces and what's growing a lot of our Printwear business is e-commerce. To be honest with you, it is e-commerce, I mean because our products are being sold everywhere. Another area of opportunity, for example, historically if you want to buy a t-shirt, because your daughter is having a birthday party and you want to get some shirts printed, today, you can click a picture, send it online and have a company supply your product printed and delivered to you in a very short period of time. Those types of occurrence didn't happen four, five years ago, because of lead times and structural changes. So, e-commerce has changed the Printwear business and is growing the Printwear business. And the whole universe is becoming one whole market basically and that's what really I think the effect of e-commerce. Another way I'm looking at it is, maybe years back, we had a consumer that shop at Dollar General and we had a consumer that shop at Macy's. Today, you can go online and shop anywhere you want. So, again, the consumer basically and the overall market experiences is changing. And one thing that we're looking is how do we adapt to that change, and as we go forward, we're looking at ways to better service the overall market and make sure that we're taking advantage in all of our channels of distribution, and making the changes as this market realigns itself on a go-forward basis. Andrew S. Burns - D. A. Davidson & Co.: Great. Thanks and good luck.

Thank you.

Our next question comes from Jim Duffy with Stifel. James Vincent Duffy - Stifel, Nicolaus & Co., Inc.: Thank you. Good morning.

Good morning James Vincent Duffy - Stifel, Nicolaus & Co., Inc.: Two lines of question for me. First on SG&A, Rhod, all signs point to top line trends remaining difficult. How are you balancing SG&A management against investment in the brands and the business? And then related to that, you spoke to leverage opportunities in 2018, what type of revenue trends would you need to see to deliver on that and still make healthy levels of investment in the business?

So, I'll throw out this comment on SG&A, and then I'll let Glenn talk about revenue trends. I mean, I think if you look at SG&A, we're being very focused on our SG&A, right? We're managing it well. I think if you look at the – some of the changes in SG&A and some increases that we've seen, a lot of that's related to acquisitions as we're driving American Apparel. James Vincent Duffy - Stifel, Nicolaus & Co., Inc.: Sure.

We are being very focused on digital marketing and the shift of our SG&A, and how we spend to support our business overall. So, I think we're very comfortable with the trend in our SG&A. Well, we've always been very focused, we're going to remain very focused to make sure we're spending and focusing that SG&A in the growth areas of our business.

And maybe I'll just comment, look, at the end of the day, we continue to be very bullish on our – obviously, as we go forward. Obviously, we're growing up a big base, but we basically have our Printwear market which is going to continue to drive based on our leadership position, as the market grows itself. We're going to continue to expand in our fashion basics and performance area. We're going to expand internationally. We're going to leverage all of our acquisitions, which is Comfort Colors, Alstyle, and obviously American Apparel, and we're going to leverage our overall leader position in Printwear. In Branded, we're definitely – look, we have work to do, there's no question. We're not happy with our results as we speak today. We're going to continue to look at ways to grow the top line in that business as we go forward. We're securing new programs as we speak into 2018. And we're very committed to making sure that we drive our brand strategy, as well as we drive the overall performance of the company. And we're also still very excited also about our expansion in our GLB business and with our global lifestyle brand. So, we have areas of growth in all these four categories of growth. So, we're very excited about how we drive and leverage our SG&A, and drive top line sales as we move into 2018. James Vincent Duffy - Stifel, Nicolaus & Co., Inc.: Okay. Glenn, the marketing budget as it relates to Branded, have you seen any changes there? Are you continuing to make investments? Have you pulled back some as volumes diversify across brands? Can you speak about what are you doing with marketing?

We're continuing to spend. I mean, our spending is up in advertising. We're committed to continue driving our brand strategy. Our awareness is basically continuing to grow. We had a big increase in our awareness in the brand this year. We're looking at different ways to spend our money, obviously, as the market changes into digital and other areas. But look, we're committed to continue spending and we're getting results, because our shares continue to grow and we're excited about where our positioning. James Vincent Duffy - Stifel, Nicolaus & Co., Inc.: Great. And then lastly, Rhod, tax rate has quite helped in the quarter. Can you speak for a moment about some of the mix variables influencing tax rate and the outlook for that going – looking forward?

Yeah. I mean, if you look at the tax rate for the quarter, our effective tax rate was around 2%, and if you look at for the full year, we were calling our tax rate around 5% now, I would say, it's closer to 4%. And really what's driving that, Jim, is to shift in what we're seeing in the mix of profitability between our Printwear business and our Branded Apparel business. As our Branded Apparel business is we're adjusting our forecast for Branded Apparel, we're able to effectively lower our overall tax rate. And so, that's what's driving us down from – what was 5% for the full year to 4% now. And in the quarter, we effectively saw that impact and we did some true up for that prior quarters as well. So, I think our tax rate is coming in well for the year. James Vincent Duffy - Stifel, Nicolaus & Co., Inc.: That's very good. Thank you, guys.

And thank you. Our next question comes from Sabahat Khan with RBC Capital Markets.

Hi. Thanks. Just one quick follow-up on the socks category, it is a large market share for you guys, but what would you say is the overall growth of that category in retail, including brick and mortar and e-commerce, just generally?

The overall category is flat to slightly down, and it's been down for the last couple years actually. So, it hasn't had any signs of growth, it's been flat to down-ish over the last couple of years.

And would you say that -

That's the overall market, but it's been also down much more in department and specialty stores relative to our mass and online. Those areas are growing still, but offset by department and specialty.

Okay. And then just in the share buyback increase that you announced this morning, any commentary on how much of that you'd look to execute on by the end of the year and how much of a share buyback is reflected in your new guidance for EPS?

Yeah. If you look at where we are from a share buyback perspective, what we've effectively reflected in our guidance for the full year is the completion of our current program, which is the 5% buyback program. So, we go above that, as we go forward, we have the flexibility. We've announced the increase from 5% to 7% that will give us some upside.

Not material for this year though. (46:52)

...for 2018.

Moving into 2018.

All right. Thank you.

And thank you. Our next question comes from Tal Woolley with Eight Capital.

Hi. Good morning. I just wanted to ask a couple of questions on inventory. It looks like year-over-year inventories are flat, I'm assuming there is a bit of build for American Apparel. So, that means probably brought down your core inventory positions a bit, which is great. Can you talk a little bit more about how much room there might be to go on that process going forward?

So, you're right, Tal. If you look at the inventories, I think we're very pleased with the way it – we'd be performing from an inventory perspective. We did see the built for American Apparel. We've seen also the impact of higher cotton costs rolling through inventories as well. So, I think we're very pleased with the way we performed from an inventory perspective. I think if you look at how we see inventories playing out through the end of the year, we continue to see good performance as well. And I think if you look at overall working capital, I mean we're very focused on effectively being very efficient with our working capital. We need working capital to support the business. We need it to support the Printwear business. We need it to support the Branded Apparel. But one of the key areas of focus that we have is making sure that we continue to be very efficient with our overall working capital, not only our inventories, our receivables, and we continue to drive the total working capital down. If we look on a go-forward basis, we see opportunities to do that, particularly as we move through the end of the year, and then really into 2018. So, really strong focus on total working capital is one of our – the key ways we're managing the overall capital in the business. But we need to – that being said, we do need to support our Printwear business and we do need to support our Branded Apparel business.

And then, we don't want to knee-jerk ourselves in terms of bring it down too fast or trying to keep it the level of dollars constant and our sales growing forward is probably the way you look at it over the next couple years, I would say.

Okay. And then, if you look at the Branded Apparel business, if we consider your different clientele there, your mass accounts, sporting goods, department stores, if you take into account their store level and warehouse inventories, do they hold different levels?

They hold different levels for sure. The destocking wasn't a one particular customer, that was basically across the board. The total decline in general wasn't that large, but it just adds up a little bit every – a little bit here, a little bit here, because we sell in so many different channels of distribution. So, it's just a function of conservativeness and obviously, retailers worrying about their own state of their business in today's environment.

Okay. And then just lastly, on trade agreements, obviously there's a lot of chatter about what's going on with NAFTA, and I certainly have no idea about exactly what will go on there. But I know CAFTA is sort of the primary trade agreement that you rely on. Is there any concern or risk factors for the business related to any changes in NAFTA?

Well, for us – look, we don't need to use our Mexican facility to service the U.S., because of the nature of our business model. Because from Mexico, we can service Canada, we can service Europe, we can service Central America and South America. So, we have a lot of opportunity basically – and the Mexican market itself, don't forget Mexico, which is the primary market where a lot of those products are going. So, I don't think it's going to affect us one way or the other. So, if you look – I mean, the answer to your question, do I think it's – from an apparel's perspective, the U.S. has a positive surplus going into Mexico, because of all the yarns and things that people are shipping into the market. So, I think that they're in good balance. So, it depends on what the fight is going to be, and is it just the auto industry or is it the apparel industry? So, I'm not overly concerned, to be honest with you.

Okay. That's great. Thanks very much.

And thank you. Our next question comes from Keith Howlett with Desjardins Securities.

Yes. I had a question on the fashion basics and performance wear segment in U.S. Printwear. Do you think that you're growing in line with the market or ahead or behind of the growth in those segments?

I think we're starting to grow faster than the market right now. We're taking market share. In fact, we know we've taken market share this year. And we're doing it just because of we have more brands that we're selling today. We have fashion basics in the Gildan brand. We have Anvil, Comfort Colors, and now American Apparel. So, we have a lot of investment in brands that are servicing that segment. We're launching a brand new brand next year, which we think is going to be something that will really take the market by storm. So, we have other things that are coming up the pike. So, we're pretty comfortable that we're going to continue to take share in the category and we're well-positioned. And so, we've made the investments in order for us to be able to be well-positioned by investing significant capital in yarn spinning, and as we leverage our Rio Nance 6 facility, that's only going to allow us to encourage more sales, more styles, and a bigger opportunity.

And then, with respect to American Apparel, do you anticipate that Printwear – or screenprinters are going to buy on your online site or is it all supposed to be consumers?

No. Online is strictly consumers and the printers are buying via our distributors, basically the traditional way, we bring our products to market. So, we have really two separate markets. And American Apparel itself had serviced both these markets in the past, prior to us acquiring the company.

And just on your lifestyle apparel manufacturing business, the major brands have been struggling in the U.S. market, I guess maybe. Does that directly impact your business with them or was that business sort of flat year-over-year?

No. Look, I think we're well-positioned. I mean these brands sell lots of products, they sell shoes, they sell all kinds of products, right? So, where we're positioned, I think we're very comfortable that we had a good growth in that area this year, and we're very bullish about the future in the categories in which we're servicing.

Thank you.

And thank you. Our next question comes from Brian Morrison with TD Securities.

Good morning. Just a couple of follow-up questions, Rhod, in the Printwear side, you said international sales up 20% in the quarter. Can you just provide us some color on the annual run rate of this business? I presume it's around $250 million or so. And really where the key areas of strength are this quarter, is it being driven by Asian market penetration?

Yeah. If you look at the Printwear business, it's $250 million, a little bit above that I would say for the business overall from an international perspective. And when you look at the different markets around the world, Asia doing very, very well, it's very strong, but we also saw strength in Europe. Actually, I said in my comments, we saw strength in all of the regions, but we're very pleased with Asia, we're very pleased with the Europe and good strength elsewhere.

Okay. And then just really a simplified question, with the shift towards higher price, higher margin fashion basics and performance, can you just remind us – I don't believe all of your textile facilities can service this segment, I'm sure that Anvil and Rio Nance 5 and 6 can. But can you just remind us what facilities can and how much of your capacity when RN 6 come online can service this segment?

Well, most of our plants are pretty diversified, I mean, in terms of being able to service the market. We can adjust some of the equipments in terms of netting to be able to support that type of product category, which we've been doing up until now. So, right now, up until now we've been producing in Rio Nance 5 and Rio Nance 1. So, basically in Mexico, we haven't spread out everywhere, but the difference is that our core styles of fashion basics is a single 30s T-shirt, which is the staple of that segment, but what has happened with Rio Nance 6 is that it's going to allow us to bring new fabrications to market, and that's the fundamental different. So, when you're making 2 million products, you need to have size – small size, medium size, large or extra large, so you have to develop that in five, six machines versus when you cut and sew and create size, it seems to make open with fabric, you'll have to develop one product, one machine and one development, which allows you to be much more flexible and also allows you to make smaller runs more efficiently, because the volume in some of these styles is not their relative. So, it will help us to support even better working capital initiatives at the same time as we look at putting some of the products through Rio Nance 6 than maybe through Rio Nance 5. So, Rio Nance 6 is actually going to be very accretive to our supply chain, because we've been producing these fashion styles in our core plants, and a lot of that product will be shipped into Rio Nance 6, which will allow us to reduce our costs in our core plants and actually give us more flexibility from a working capital perspective as we build Rio Nance 6. So, we think we're well-positioned and be a win-win as we go forward.

Thanks, Glenn.

And thank you. We now have a question from Stephen MacLeod with BMO Capital Markets.

All my questions have been answered. Thank you.

Thank you.

And thank you. We have no further questions in queue. I will now turn the call back over to Sophie Argiriou for closing remarks.

Thank you, everyone. Once again, we'd like to thank you for your interest and for participating on the call. This concludes the call, and we look forward to speaking to you soon. Have a great day.

And thank you. Ladies and gentlemen, this concludes today's conference. We thank you for participating. You may now disconnect.