HanesBrands Inc. (HBI) Earnings Call Transcript & Summary

Thanks, everyone, for joining us. It's Omar Saad from Evercore ISI here in this global softlines fashion and luxury sector. We really appreciate everyone participating in our summit on the -- from the corporate side as well as all of our clients on the line. It's an event, we've always really enjoyed doing. Unfortunately, it's virtual this year. But we really appreciate the support from the companies and the management teams we cover as well as our clients participating from all corners of the earth, so to speak. And especially the Hanesbrands, we're excited to have them here today. CEO, Gerald Evans; Interim Chief Financial Officer, Scott Lewis; as well as T. C. Robillard on the Investor Relations side. Thanks to all 3 of you for joining. We're excited to have a conversation. It's going to be kind of a fireside chat Q&A format. And if it's okay, Gerald, I'm going to jump right in.

Absolutely.

Perfect. So first of all, Gerald, congratulations on your upcoming retirement. I know you've had a long and illustrious career at Hanesbrands. I'm sure you're looking forward to doing some new things in the next chapter of your life. And I wanted to start our line of questioning along that topic. With your retiring and the recent -- the very recent announcement of the new CEO, congratulations on finding your replacement. The ex-Walmart, Chief Merchant, Steve Bratspies, I'd love to hear a little bit about your process behind the announcement of Mr. Bratspies as your successor, what do we need to know about him? How does he fit into this role? Any kind of thoughts as the outgoing CEO for him? I know there's an overlap period. Anything you want to share on this topic, Gerald, would be appreciated. Thanks.

Sure I'd be happy to, Omar. I'd say, first of all, yes, I've had a great career, 37 years in the company is a fantastic experience. And I leave a lot of great friends behind. And certainly, I am looking forward to moving on to the second part of my life that I've put on hold for so many years and enjoy things with my wife. But from the standpoint of the transition, and we -- as a company, one of the most important roles the Board has is obviously CEO succession. And I spent some time discussing with my retirement plans. And certainly, as we announced with an extended period of time for me through the end of the year available to them, we put in motion a recruiting effort using Russell Reynolds, and they went through a series of certainly looking at a number of candidates. It's a highly attractive job, and they looked through a number of candidates. And from the standpoint of what you're looking for, obviously, you're looking for somebody that's got the same kind of ethical standards -- high ethical standards, this business and this company is built on. One that values brands, one that understands the consumer and has a familiarity with the product trends and his experience in developing a business in an omni-channel kind of world. These are, obviously, all the things we've focused on over the last few years as we've positioned HBI for more consistent growth, and I've really enjoy getting to see -- to know Steve as he's been through the recruiting process and announced, and I think he's really well qualified. He's got a great background in marketing and strategy and product development through his various roles as well as work in digital, and of course, overseeing the merchandising of Walmart. So he clearly understands the products and so forth. I think he's going to be a great addition to take us through the next level as we come out of COVID. And of course, he's inheriting a very strong management team to support him as well. So I'm looking forward to working with Steve through the transition. I think things are going to be great in the years ahead.

Yes. And he's -- and pre-Walmart, he's had experience too in the brand side of the world, not just on the retailer side. I think that probably gives him 2 sets of perspectives that are relevant for Hanes. Is that -- am I correct there?

Absolutely. He was a marketer as well in his prior life and done strategy work as well. So very well-balanced background.

Got it. Cool. Now that's exciting. Congratulations to both of you. Let's talk about the COVID pandemic, this unprecedented situation, we obviously all find ourselves in. I think you guys have done a really nice job managing through it, using your competitive advantages to your advantage. Maybe give us -- to the extent you can update on the progress in the wholesale versus the digital side of your business, which was really strong in the last when you reported the first quarter results, any updates on retail? Are your stores reopened? Your business is so much more global now. Are you seeing differences between North America versus Europe versus Asia. When is kind of Hanesbrands Inc. and all its channels going to be fully reopened, if you have a sense for that?

Sure. Let me just go back just a little bit to remind folks of as we were going through Q1, we're very pleased with what we were seeing as we were coming through the vast majority of that quarter. Our businesses were all at or above our expectations coming through the quarter. We were particularly pleased with the progress we were seeing in our U.S. Innerwear business. We see a nice POS trend across our customers. We were seeing nice share pickup and so forth. Our innovations were working. We also like what we received in Champion around the world. It was performing very well. It was running at a high single digits kind of rate while we had targeted more of a mid- single-digit rate for that quarter. So things were going very well. And obviously within the last 2 weeks like so many businesses, we felt the full impact of the COVID shutdown around the world. But as we look at it and adjust for that impact, we were running very nicely at a constant currency rate of about 1.6%. As we came through the final 2 weeks of March, we saw things seize up. But as we came into April, we saw retailers start to open up flows on the retailers that were open, and we noted about half of our doors at that point were open. And we were seeing POS trends and shipment trends began to normalize in the channels that were open or move toward normalization in the channels that were open, which included, we were beginning to see bookings of back-to-school and so forth out of some of our mass accounts and dollar stores and so forth that were open. And I'll remind you that a fairly large portion of our businesses is in that mass channel and the dollar store channel around the world. Since that time, we've seen the markets begin to open up, particularly as we came through the end of May. We saw the European market open up at the end of May, and our retail stores are now open, for example, in Italy and Europe that were closed during April and May, most of May. We've seen Asia begin to open up as well. Japan was a little slower to open. They went through a second lockdown and in Tokyo, but we've seen that now open up as well. And the European markets, as I mentioned, are open. Our U.S. stores, we're about -- about 80% of our own stores in the U.S. are open at this point in time. We have -- our department stores are opening in the U.S. on a state-by-state basis, and we're seeing them as they come online, sequentially improve from week-to-week and month-to-month. We've been very pleased with some of our businesses that are more heavily weighted in the discount channels and so forth around the world that have been open throughout and our Innerwear business, we've actually in the basic side of things, seen a number of weeks that are actually up year-on-year from a POS standpoint as we have come through that May period and even in April. And we've seen our share gains in Innerwear continue in the latest 3 months. We've seen almost a 2-point increase in share in our basics business in the U.S. So we see there's underlying strength. If I look at our Champion business, which did have a number of its channels closed during the period, we saw a strong migration on line of that business as well. We've noted on our last call, sort of triple-digit kind of trends in our champion.com site in the U.S. We've seen very strong dot-com performance in the Australian market as well, where we're well-established from all of our brands, Innerwear and Activewear in that market. And we're seeing it reemerge now, both at retail. And Australia opened up as well at the end of the month. So we're seeing a nice resurgence in that business as well. So we're optimistic that we're seeing sequential improvement. And certainly, from the scenarios we laid out on our earnings call, our base case looked at the option -- or the opportunity to have the markets reopening by the end of May and, and we're largely on that course as we look right now.

Got it. Got it. And Gerald, would you expect the -- would you expect the really strong digital performance to moderate as more stores reopen as more parts of the country in the world reopen. I mean the digital growth rates were obviously exceptional and they won't last forever. But how do you think about how that evolves as things reopen?

Well, I think there is a consumer that's discovered the ease and the efficiency, if you will, of buying online. So I think we're going to continue to see accelerated rates going forward. And an important part of what we focused on as a company over the last few years is really getting our websites improved and our ability to support these websites as well as building business, as you know, with pure plays and the dot-com -- or sorry, and the brick and mortar dot-coms as well. And we've seen that really lift. And I think that's going to hold. Now whether it's triple-digit or double digit, I suspect we'll see some tailing off as retail opens, but I think you're going to continue to see strength there. And as we know that many of our customers are omni-channel in their purchasing, they're buying both. But I think you'll see digital remain a very important part of our mix going forward.

Yes. It sounds like it's holding up so far even as the stores and the physical economy reopens. In terms of some of the shifts you're seeing in the marketplace, obviously, channel shifts you alluded to, you think some of that is permanent. Other ways to think about consumer behavior changes, the casualization trend, do you think that with obviously people working from home, they're not getting as dressed up, comfort clothing, a lot of areas that fit well with your brands and your core competencies?

Yes. There's no doubt, look...

There's athleisure trend. Do you think some of the stuff is...

...still there, Omar?

Yes. Yes, please. I'd love to hear your thoughts.

It sounded like it was breaking up a bit there. Yes, from the standpoint of the trends, there's 2 good things going on. First, from a basics standpoint, in general, the consumers are buying in basics, and they're buying them online. And as I noted earlier, a lot of these are replenishable products that people wear, and they're as easy to buy online as they are at retail, and we're seeing that come through. But the casualization has clearly driven a real interest in our Champion brand. We've seen a real migration of consumers to our dot-com sites as well as our other online partners. And they're looking for sweatshirts and sweatpants and things that are very comfortable to wear. We've seen a nice trend in our Alternative Apparel line as well, which is a sustainable but comfortable product line. And I think that is with us. I think it's just further extended the casualization of fashion, which we were already seeing. And we feel good about that brand's position. It's not just a U.S. thing. We've seen the same thing if I take you to Australia and the reopening in the markets, the surge we've seen as strong as any has been the surge in Champion. And we're seeing our China stores that are open. We're seeing the traffic begin to level out in those stores. And in all cases, as we see our consumers come back, the ones that are coming back to retail, the conversion is much higher across these products. The consumers that are coming to retail, they're buying.

Fascinating. While we're on the topic of your core competencies in the manufacturing and product development side and the trends that we're seeing in the marketplace, the macro trends. Maybe can you give us an update on the mask production, your program there, the opportunity, how do you balance using that manufacturing for your core businesses, Innerwear businesses and versus the mask? How does that fit in your supply chain?

Sure. As we came through the March period and saw things begin to shut down, we did a couple of things. First of all, we shut our supply chain down quickly to address what we thought was going to be abrupt stop to demand, and we certainly didn't want to have the inventory builds and so forth. As part -- and we've avoided that. We've managed our inventories very well. As we look to opportunities, though, we saw the opportunity to work with the U.S. government first on filling up a need for mask and mask production. So we swung our production to making masks as part of a consortium of producers. And we've done that very effectively. We've -- as we noted in our call, at the end of Q1, we're going to ship over $300 million largely in the second quarter of these types of products. Early on, it was largely for the government. We did see some interest from our consumers and retailers and frankly, businesses that are reopening and we focused on an opportunity we see to bring a trusted brand, along with little innovation to a category that's been largely fragmented. From the standpoint of how we swing our production, the production is not really dissimilar to what we do in producing basic apparel. It's a cut and so kind of process, and that's one that we believe we can do at scale and further enhance margins over time. We think that there's going to be a demand ongoing for an extended period of time as it becomes part of all of our lives to wear protection when we're on the street. And as we look forward, we see that certainly as we field this government opportunity, there that was very large, that there still could be an ongoing business of some scale as we look to the years beyond, and it's one that we intend to focus on.

Do you have a time line in mind when we might see Hanes branded masks in the marketplace?

Yes, you should be seeing them really probably in June, July period, you should see them start to show up. We -- our first focus was on delivering the government items, and we're coming to the completion of that, but you'll begin to see them, and you'll begin to see them in various forms. You'll see them on some of our pure-play partners online. You'll see them pretty soon in a number of our brick-and-mortar retailers because we're beginning to ship them now. There's obviously a focus on getting those products out there as the markets reopen and will be extended as we look into back-to-school as well.

I mean it sounds like a possible important traffic driver kind of category from some of your retail partners? Will it be the similar kind of retail partners as your normal businesses?

Well, largely it will, but we have found other partners as well. Certainly, the business-to-business has become an opportunity as businesses reopen and their workers need to wear a mask. We've worked with some that have not traditionally been partners, but we are selling a number of consumer programs direct to our traditional partners as well.

Got it. Got it. How many masks does your supply chain? I mean it's one of the only owned supply chains in my entire coverage universe. And certainly one of the most scaled in the world. How many masks could Hanesbrands as a company produce annually in a year or 2?

I think we'll keep sizing that to the demand, but we think there's -- it's a pretty big market, and it's one that has expanded. And as I said, it's one that's really in our wheelhouse as far as production. And I think we can produce them in pretty high quantities continuously if needed.

Okay. Yes, there's not a limiting factor in terms of the supply chain and the production side of it.

No, this is very much like when we see demand grow in our basic underwear, panties, we bring on additional sewers and so forth, it'd be very similar to that. So low capital investment and pretty quick scale up.

Got it. Okay. That's super helpful, Gerald. I want to switch to Champion. It's a really old and authentic brand that's been in the athletic space, which is obviously a very strong category, continues to be. It's in the casual side, it's in the athletic side. It touches on the streetwear trends. So really well positioned. The company has brought in the international pieces and licenses in-house. So it's more kind of consolidated in terms of the brand management. I'd really love to hear an update on the Champion brand and the strategy for the brand, the leadership team, what they're doing, what their key focus areas are. How is the e-commerce relaunch? I know digital is a key piece there. Kind of a broader strategic and management and operational update around Champion.

Sure. We couldn't be more thrilled with how Champion's evolved since we've reassembled it around the world. And we continue to focus on that. We set our $2 billion goal, and we really accomplished that last year. We also put in place a $3 billion goal over the next few years. And I think we're certainly still on course to do -- achieve those results in spite of what short-term interruptions we may have with the COVID shutdowns of retail and things like that. I think the most important reinforcement of that opportunity is when you see the consumer and the fact that the consumer, as retail shut down, did seek out the brand online and through the other channels that we're open, is the greatest example to me of the continued strength of the brand. We measure our consumer engagement around the world. We continue to see that ramp and importantly, continue to ramp among a young consumer around the world, and it truly is a global initiative. As you know, coming into the first quarter, we launched our new champion.com site that has driven that triple-digit kind of expansion we talked about. More recently, we just launched an updated site in Europe as well. And it, too, is a new look, and we're pleased with the early results of that. In Europe as well, we saw the consumer look for online options as we were forced to shut down some of our retail options during the shutdown. The Australian market, I referenced earlier, but I'll come back to it again as a market that we introduced Champion in a bigger way once we made our acquisition of Pacific Brands several years ago. And that business down there just continues to ramp at double-digit rates, very strong recovery in that business coming out of the shutdown in Australia as well. So we continue to see broad strength. We continue to believe we have an option to further build the business in the -- on the women's side of things. We think there's a kids opportunity there. We still think there's more expansion in men's, and you touched on a minute ago, the casualization only reinforces in my mind, the potential of the brand going forward.

Gerald, could you remind me, the classic iconic reverse weave sweatshirt. What it is -- what's unique about it, what you guys do versus competitors? I think it's an own manufacturer, it's pretty scaled own manufacturing piece. Just a brief description about the core component?

Sure. I mean one of the great things about Champion is being one of the originals, there's so many iconic products that were created, including the hoodie and the short -- the basic basketball short and things like that came out of Champion many years ago, but one of the great fleece items in that is what we call reverse weave. And it's just -- it's just cut and sewn in a reverse direction from a typical sweatshirt. But the core of it is a very heavy-duty product, very heavy weight really not one that is copied or can be copied by most. A lot of that is proprietary knitting capabilities and so forth. And it's one we use around the world. It's one that we're recognized for and has been in place for years and continues to thrive. It thrives in Europe. If you go to Europe, the core of our business there and our stores and so forth is that. If you go into the better channels in the United States or Australia or even Asia, it's that same core reverse weave. And it's just one of many -- if you go and look at champion.com now, you'll see coach's jackets and things like that, that are all things that were originally developed out of Champion and are part of its legacy.

It's very cool, very cool. How -- if I can, how much does it cost Hanesbrands to produce a single reverse weave strength standard sweatshirt versus if a competitor wanted to manufacture an item like that?

I don't know that I could -- that I will give you the cost, and I don't know that I could tell you. What I know that, what we've always said about our -- owning our own supply chain is we have a 15% to 20% cost advantage versus making things outside or sourcing things, and we've seen that through our own acquisitions and so forth. And given our focus on and scale over time, I suspect maybe it's a little better than that. But it's -- importantly, it's now in the consumer's mind, just something that is tied to Champion. Knocking off something and tying it to your brand is not the same as building a long legacy and having the consumer sort of equity that we have with that reverse weave product.

Agreed. Agreed. Last question on Champion, C9. You launched it with Amazon. It's kind of the controversial breakup with Target. Relaunched with Amazon. Obviously, there was demand for even the sub-brands underneath Champion. Any color on how you're thinking about that business and how the Amazon Prime customer is responding?

Yes, sure. First of all, I don't know it was a controversial breakup, businesses make a decision to go in different directions sometimes. And certainly, Target had a desire to move more toward their own private label after a 15-year kind of successful run. So we still doing a lot of business with Target. We think Target is a great customer, and they're a good partner. From the standpoint of C9, it was a very successful line. We saw the opportunity to bring it and relaunch it somewhere else. And you may recall, it was only late in March, really the first quarter that we announced our launch of that program. And so this is sort of the initial launch year for the program with Amazon, and we said it would be fairly small this year, but we believe it could ramp over time as we move forward. We're both, I think, pleased with how it's done both so far. In spite of it getting a little overshadowed, probably like many things by COVID, we're very pleased with the trends on it. Certainly, when you have a partner, there's no bigger partner from a consumer REIT standpoint than Amazon is, if you're going to work online. And so we're very pleased with how it's going. And we're very pleased with the initial response to the product. So I think it's going to do well.

Yes. Sorry, I didn't -- controversial. I guess it's controversial when a big retailer leaves the brand, that mother brand is as hot as it's ever been. I guess that's where I saw the controversy. But along those lines, we've seen Target do really well among the mass market retailers, especially in the softlines segment. They continue to be a leader there. And obviously, an important customer for your Hanesbrands. But we've seen them do -- expand their breadth a little bit with other iconic brands like Levi's, Champion, that Target customer is an attractive customer, is it something -- is it the kind of channel you may consider for a brand like Champion, especially since Target is -- seems to attract a more premium customer over time?

Yes. I don't know what could happen down the road. But what I would say is we focus very diligently on keeping Champion elevated and driving the business, and we still think there's a good amount of business to be had around the world and the channels we operate in. And so from a Champion standpoint, I think we're very comfortable in how we're driving at this point in time and the expansion that's there. As you noted, we continue to -- as I noted, we do continue to do well with our basics and our Innerwear categories across many retailers. And as I noted, our basics has shown as weeks of POS that are very strong, and a lot of that's in the mass channel. So we have a business to build there as well, and we'll continue to build that across our mass partners. And Hanes is a sizable brand in its own right, that also is performing well, and I should add back to your casualwear question earlier, we're seeing quite an appeal for Hanes T-shirts and sweatshirts and things as we see consumers buy online as well because, again, it's that trusted name that's comfortable to wear, fits-you-well position.

Got it. Let's shift a little bit to the financial side. On the expenses, we're not sure how long the consumer -- pressure on consumer spending is going to last. Obviously, things are reopening. There could be a second wave and other fits and starts in the economy. How are you thinking about the expense lines coming out of the crisis? Where are you maintaining investment? Where are you pulling back? Are you starting to put -- turn marketing back on or thinking about turning it back on again?

Yes, sure. And so from the onset of the health crisis, we were very focused on preserving our financial position, liquidity position and cash. We acted very quickly once the pandemic began to scale globally and began to step back and just -- not just the expense side, we actually took a number of actions as we managed through the crisis from a working capital perspective. As Gerald mentioned, we quickly took action to shut down our manufacturing network, which helped us manage the inventory level. Again, we saw good -- really strong cash flows in the first quarter help manage our inventories now, which were actually down 12% or over $270 million compared to the previous year. We also, from a payable standpoint, have been working very closely with our vendors on extended terms. We've been actively working with them and our key suppliers to allow on commitments as we move forward, as we brought the supply chain back up. On the receivables side, we've been working very closely, had a lot of dialogue -- ongoing constant dialogue with our customers there to manage receivable outstanding balances and also collaborate on future purchases as we again emerged and have store reopenings and back-to-school period coming up, have been working very closely with them. Switching to the cost reductions that you're talking about. And as we mentioned in our first quarter call, we identified over $200 million of cost reductions, which was across all areas and across all businesses. Now those cost reductions were primarily in the second quarter, mostly related to employee-related actions like furloughs and salary reductions, also identified areas like what our discretionary spending areas like marketing and media. We had significant reductions in that area. And to the point we were talking about earlier with digital media, we continue to invest in digital media through this period. We found that's a very effective and productive way to reaching out and communicating to our consumers the value of our brands and product offerings. So we anticipate that continuing and that mix as we move forward is something we'll have to kind of revisit because clearly, there's a lot of opportunity there from a digital media and online perspective. Also in spending, we just didn't focus on discretionary spending. We looked at contractual committed spending and focused on reducing or just at least delaying cash payments in those areas like rent and royalties taking advantage of governmental incentives across the country and also in other businesses like Australia and Europe. So we identified a number of opportunities of reducing costs, again, primarily again focused in on the second quarter. I mean we can extend, depending on the duration and scope of the pandemic. So as it emerges, we can extend the number of cost reductions that we have as we need to. Again, as businesses come back online and sales are brought back up and market reopens, we can again extend the cost reductions as we need to. And as we think about this moving forward, I mean, as we are managing through the crisis, it kind of makes you rethink different areas like some of the spending, travel, like, for example, taking advantage of technology and tools and a good example is this conference, is to make you think a little differently about how you spend your cost and saving on cash there. And I mentioned digital media again, we're going to continue to focus on effective use of our media and marketing spending going forward.

Great. That's super helpful color. I'd like to -- we got a lot of questions on our side about the channel shift from wholesale to DTC to digital and more e-commerce and wholesale.com, so to speak. That's a channel that has a lot of controversy. There's obviously more bankruptcies that have happened as a result of the pandemic. Inventory reductions and more store closures in some of your wholesale partnerships. Where -- how big of a drag is the wholesale channel from those types of issues going to be -- has been recently and going to be looking out over the next couple of years? How should we think about the opportunity to maintain the profitability and revenues in that channel if there's more bankruptcies and store closures?

Yes. I think certainly, the door closures have been a headwind for us for several years from the standpoint of the transition, and we had certainly focused on building our online business from consumer direct and general, more stores in certain countries, particularly internationally and online in this country, including the brick-and-mortar dot-coms as well as the pure plays. It feels like -- and you always say this, and you always wonder if this truly is the case, but it feels like this has been a good thing. It's taken some of the questionable retailers and certainly, their stores, and it's taken them out or adjusted them. So Sears was a couple of years ago, that one came off. And at a minimum, we're going to see Penney's come out of this thing with fewer doors and so forth. And as we look at the other department stores, my guess is that some of these doors are never reopened. But what we also see is that the dot-com sites of those brick-and-mortar department stores are increasingly representing a large portion of their total sales for our business. So I think our focus has insulated us heavily from the potential of future impact. So you never say never, but I would say that I think that I really do feel that the worst of it is behind us. And if there's a good thing to come out of this pandemic is that it forced out some of the remaining bad doors and retailers that could have been a problem going forward.

Got it. Okay. Let's hope you're right. That would be fantastic. Do you think there's going to be a significant promotional environment? I mean your categories are pretty basic and pretty core, but do you expect that you'll be dealing with a very promotional environment at least for the coming near-term quarters with everything that's just happened?

I'll tell you, I don't. Actually, from our standpoint, we were very careful in the amount of inventory that we carried out. And if anything, have been frugal with that inventory as we looked to some of the channels reopening, and we're going to basically make and deliver inventory at the pace that they book. And so from the -- and I think that many of our branded partners -- our branded competitors have done the same thing. If I go to a category like Activewear, I think there's been a really thoughtful approach that what you didn't sell in spring of this year, you've tightened your line and you keep that in your line as you look to the spring of next year. And when you have that thought process, you prevent some of the glut of inventory that would drive a promotional -- over-promotional kind of approach to the market. As we see bookings and plannings, we see a very logical approach to the business. We see great caution in some of the channels that are just opening now from the standpoint of how they apply their cash and how they spend it even on weekly flyers or weekly catalogs and those kind of things. So I see some -- a very rational approach right now from what I'm seeing for the reopening of the markets and how they'll promote accordingly. Now when I speak of it, I'm really speaking of the channels in which we compete. So it's more of the mass and the department store in the mid-tier. I know there's chatter about the specialty channels, but we're not as -- we're certainly not competing in that channel.

Got it. That's really interesting, Gerald. Just a couple of minutes left. I'd love to ask my last question around digital, technology, the investments you're making and want to make. What are your key kind of opportunities or areas -- launch that matter that relate to digital and technology. Is it just pure -- yes. Go ahead, Gerald.

Yes. Sorry. There was a little break up there, too. I didn't mean to talk over you...

No, no, no worries. I was going to ask -- is the key opportunity, just pure e-commerce? Is it -- is there opportunity for loyalty program? How do you use data and AI to make better decisions? Is there an opportunity for loyalty? Is omni-channel even relevant? Or you just access omni-channel through Walmart and Target and your partners are you using omni-channel?

No, those are all great questions. From the standpoint of, we viewed all that in a bucket, it really was, we launched it roughly a decade ago, now a digitization strategy for the whole company to really leapfrog this company forward. You may remember, we were created through a bunch of pieces of businesses over time, and our focus was on simplifying things. And over that period of time, just to give you an example, we've reduced our core applications by about 87% to get us to a streamlined set of systems to allow us to not only handle more data but do it more efficiently and so forth across the total business. And so selling online and those things are kind of obvious, but there was things underneath this we wanted to get to first. And we actually went out and we have a staff of over 30 engineers and data scientists that we've hired over time that have allowed us to really begin to think through this process, streamline them and put this digitization strategy in place. And it plays into our cybersecurity. We're using AI now to tumble billions of pieces of data a day, looking for anomalies that people just can't do. We -- our financial closings used to be weeks and they're down to days now as well as our forecasting as we let machines do what people were doing with spreadsheets and so forth. And yes, of course, then we've moved into improving our websites. And several years ago, we focused on the fact that this consumer moves back and forth. And if we're going to do this effectively, we need to understand this consumer and their -- the way they behave from the standpoint of learning, particularly the new consumer. We know they're coming to our websites, first, to look at our brands and learn data. And I think our maidenform.com is a perfect example of that. When we opened that site up, it was -- we were very focused on. We knew there was a younger consumer interested in the brand, but it had to look like them, and they were going to come to that website and look at the products there. And we've seen that triple-digit kind of pace online, but we've also seen the influence back on the brick-and-mortar purchaser as well. So we see it that way across the board. And we see when we work with a brick-and-mortar retailer. For example, if we work with a Kohls.com, that, that has influenced back on our sales, and Kohl's as well. So we've been very thoughtful about really working across the business to improve our ability to react quicker as well as reach that consumer and communicate the way they want to learn.

Great update. That brings us to the end of our time. Gerald, Scott, T.C., thank you so much. Best wishes for the rest of 2020. Talk to you soon. Thanks, everybody.

Thank you.

Thank you.