Avery Dennison (AVY) 24 Apr 242024 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by. [Operator Instructions]

Welcome to Avery Dennison's Earnings Conference Call for the First Quarter ended on March 30, 2024. This call is being recorded and will be available for replay after 4:00 p.m. Eastern Time today and until midnight, Eastern Time, May 1. please international (XXX) callers. replay, (XXX) or the for XXX-XXXX access dial XXX-XXXX X X To The ID conference number is XXXXXXX.

I'd over to President turn the Avery ahead, to Investor Vice go and of now Dennison's Finance Please sir. John like Eble, Relations. call

Mandeep. are throughout today's accompanying Please schedules reconciled GAAP defined, references qualified be discussion, measures non-GAAP A-X that measures. of on statements financial and today's non-GAAP The note the to that you, we'll making Thank release. current about make results. reflect to performance earnings we financial in subject you A-X use predictive certain included earnings we'll financial statement are today's We that views remind release. to statements that harbor the These and our our forward-looking statements estimates safe from and future

Stander, call and Greg Chief today Officer; and President Deon Senior Financial Officer. the Executive are Lovins, Chief Vice and President On

now call I'll the turn to Deon. over

a In We delivered margins, delivered in Thanks, growth, prior free off in We're strong to significantly compared expectations. slightly to John, year again significantly segments, both and we volume start generated cash quarter, to Intelligent and year. significant hello, above and Labels. sequential earnings flow first up our strong the grew growth with everyone. expanded earnings the

the sequential improved as customer up our normalize. a again basis to to Materials quarter. in managed Label was Volume expectations in margin on through port expansion compared volume moderated inventory as Finnish destocking significant expected. Europe its both teams demonstrated the strike, Group and continued year volume North resulted order in once particularly above and in as pull the in subsided downstream delivering resilience, growth slight quarter forward which as strong, prior volumes and now inventory America concluded was significantly destocking

volume mid-single was strength in market particular in strong China up the digits and was the region ASEAN with and Overall, quarter. India emerging

imports categories despite continuing demand. by expanded strong to Solutions and driven apparel below Group top-line growth, margins, high-value delivered be

apparel and import expect has volumes midyear. to trend normalize we near-term show America, of apparel started remain retailers slight in brands and the their signs North to to plans, While cautious continue industry improvement in sourcing

very with Enterprise-wide high non-apparel to recover. Intelligent our Overall, strong, solutions logistics due industry apparel to food logistics address transparency such the categories and volumes, in the while categories, like with waste, challenges, In quarter, increasingly efficiency, Labels grew were of is to in strength ability as below began customers. the large teens parcel particular in lower help to volume. quarter, and consumer mid- while labor volume domestic expectations connection resonating

points significant pilots Key our broader and and are adoption. rollout compelling customers proof for for delivering value segment

as leadership invest and the to capture physical significant grow at industry, the digital. further size overall position opportunity we the to the of advancing continue the our of intersection We ahead

to rebound apparel, we are new roughly platform As we in Labels continue our in adoption see targeting in in XXXX. categories Intelligent XX% and deliver a growth to

business Stepping to growing with for strong. markets catalysts exposed the of growth. and diverse fundamentals clear our long-term underlying back, are We're

primary our competitive scale advantages innovation. and in businesses leaders industry with the are We clear in

most through value our help of positioned range confident wide GDP-plus long over execute along to us are the complex enable our ability strategies that the key of growth We and a will quartile with dynamic we over physical a to business and superior and team's in creation strategies, to generate remain top of balance serve. in returns that we industries have some set been the continue to address term. environments across connect of long We problems our clear uniquely term a to digital and the cycles, success have to the

growth full addressing want focus at in year quarter commitment we our our entire to strong earnings excellence environment and strong unique on hand. a to reaffirm XXXX. in still continued to team their In for the I and challenges resilience, uncertain delivered a thank deliver summary, guidance

And with that, I'll hand over to the call Greg.

Hello, earnings share compared X% from up by up to $X.XX, In productivity. adjusted we year, benefits prior per Deon. first volume and sequentially delivered quarter, of everybody. Thanks, driven XX% the and higher

related and with to to margin compared Compared to up EBITDA the quarter, Adjusted XXX prior was X% dollars adjusted ex basis were offset sequentially. up sales year, and prior basis by EBITDA on volume XX.X% partially at in strong as points prior was compared currency year. an organic X% higher X% reductions. XX% up year up deflation price

million in $XX the strong million $XXX free prior flow generated year. up first to quarter, cash compared We of

And to our debt at balance X.Xx. ratio EBITDA end sheet remains net adjusted strong quarter with of a

strategy, to combination execute million continuing allocation the acquisitions capital dividends. including the our while continue quarter, In in share and and growth we to of disciplined to shareholders. $XX investing to through return organic first cash shareholders repurchases returned We

an Group on reductions to and to basis growth, the sales year, mix. volume ex up by price offset by for double-digit Turning related currency were deflation segment prior X% Materials the first low organic partially driven and compared quarter. results

quarter in in than up more was label was cycle. also expected. was XXXX customer mid-single America Europe destocking at as and volume digits. low up quarter, as the as significantly, organic trends Looking digits Volume point XX%, materials low inventory up and strong destocking sequentially, double mid-teens downstream QX the versus prior was year up subsided in the sequentially North the

Reflectives as Graphics and Tapes digits volume India up with year, strong in strength digits. down America regions categories and Compared and particular delivered were mid-single with up Emerging in Asia Performance prior and mid-single Latin mid-teens. to Medical ASEAN both well, and growth sales

adjusted the a year, up from costs. to quarter, driven higher partially of points EBITDA by benefits higher delivered price volume the employee-related strong X first XX.X% compared deflation-related prior productivity, Group impact margin percentage in margin Materials from on by offset reductions, and

costs, deflation in Regarding sequentially material saw expected. raw we as quarter first globally, modest the

particular. began raw we see in categories, to the material cost quarter, Europe, certain in part of Towards the increase latter in paper

sequentially the second are product such, the and addressing of inflation quarter anticipate increases in pricing As cost a through modest actions. combination and reengineering we

wage annual we Group in pricing employee Given will and the Materials timing slightly increases, of moderate QX. these our expect actions margins

Group. enterprise-wide year. now solutions Intelligent and with low Labels strong and up an to Solutions mid- XX% double base sequentially logistics teens, quarter, were high low apparel and X% Shifting digits on both with ex categories, up to and with growth solutions sales basis, digits. In high-value organic were to single Sales non-apparel up currency compared up up particularly prior and categories, general in retail, the

and benefits of and basis higher Solutions XX volume, was Group XX.X% year from to offset compared costs by higher partially up productivity points EBITDA investments. prior employee-related margin driven adjusted by

payouts Margins XXXX. productivity seasonality in by compensation We improvement employee costs, and second sequential margin and down driven including anticipate apparel driven were additional initiatives. sequentially, incentive following quarter, by volume and lower higher accruals the logistics higher for higher

our for outlook shifting Now XXXX. to

anticipate than we year, label ongoing from similar drivers are productivity out volumes reflecting earnings our all apparel programs significant to the be you outlook in of and as increase new which $X.XX operational up $X to our growth earnings of will continue at track: of XXXX, the Intelligent in For And performance, normalization volumes adjusted a share midpoint, of the range on as headwind includes currency size continue normalization recall, the offset $X.XX, year, a to from and growth actions. apparel translation. more per XX% to in mid-year, roll the Labels early key in the rebounds X by

on sales We've previously our focusing X% materials. we basis to changes the organic points key guidance of previous assumptions In presentation due our XX particular, than our anticipated. growth, the and outlined contributing supplemental higher in January, roughly factors our outlook pricing additional higher to than XX on Slide from largely slightly estimate

single-digit for to deflation the offset partially related growth, volume expect year. reductions high by continue We price

currency now We more expect year, headwind restructuring previous operating incremental $X modestly translation outlook million. from a in the we million And from income actions of of for $XX roughly savings up our favorable. anticipate than from of

benefit in improvement forward. business. of the out will the to underlying down in earlier, $X.XX we EPS mentioned pull we QX. slightly roughly continue expect due that was customer will pull-forward estimate be And QX EPS to We the QX, Overall, from and Deon anticipate come customer of QX

be in second apparel continue volumes than We normalizing expect the midyear. year to the with industry stronger half half first will the of earnings

continue strengthen our we results normalize. advance markets our summary, and as In to initiatives we our growth

and strong expect a ability disciplined to for profitable to a strategies variety allocation. and capital we exceptional in long-term continue XXXX our environments, of growth in confident rebound deliver value through We throughout continue our remain to

will now call open We for questions. your up the

the from George Our of America. Instructions] of line question first comes Bank [Operator from Staphos

XX% guidance remind of thing XQ? you're if else sales prior margins called anything reverse modest Label. couple guiding things quick saying shipments you the first they Is will year. in behind parcel in there that you As start for XX% only that growth us one IL or -- what's for Can There always, approximately current to going you for question think the This a I are quarter. out solid organic the on? plus. to quarter, you're you with slower quarter? that's and there And in said expected you first on hope were -- any IL? expected as Intelligent were relatedly, solutions, headwinds little Is just a think for then for XQ. I into bit are adjustment I than Or your that could, Guys,

thanks question. George, the for

the that did see very on volumes see driving ahead we've relates continues we slightly the also it well to of logistics out, as prevention apparel our in to as moment. parcel of well. strong where because largely business at continue As apparel we than did lower Inditex, programs in And lower be been IL new guidance, anticipated shipments. IL -- loss And base growth but some to our we rolling that's some we're including

recovery As we in still to the second key see half a of apparel IL forward, well. as driver of we growth the be the look business our

significant and that well. the our in of to we're are the us. and programs can outside that believe opportunity be trials going these in everybody There to and flight the drive to George, industries you from of as in ahead rollout of addition, We are know continue fundamentally are growth. of episodic, those, apparel I'll that conversion some of XX% continuation as ahead our that opportunities And growth to the remind they in quarter-to-quarter. lies of and rollout pilots on nascent deliver strength switch and And can invest still stage. the all of

on decrease the impact second having little of some your question more apparel to and apparel in overall, a seasonality or did versus we QX. margins to QX now George, Solutions sequentially, logistics a due with largely expect Yes. seasonality

expected. of quarter-over-quarter. look So we what was as increases cost also And part employee we had some we that see

things like talked included temporary but included items I think as year tightening, it these actions, also we've that, that about savings last volume-related comp. such belt incentive cost

And That in our -- lower our the us that our just given compensation year, fact expected a results was incentive than versus was a we initial our came expectations. last bit given well. quite where bit sequential that as a headwind for or target,

Solutions think expect look increase forward I we earlier, to to Now do margins we to commented QX, I quarter-over-quarter.

the drive well. further productivity QX that is of that And Some to QX to is from QX. to there volume. starts as impacted That to the benefit business seasonality due continuing

So improvement the we Solutions would through we some expect margins year. move in as sequential

from line Our from Panjabi the comes of next question Ghansham Baird.

XXXX. seen that? what apparel was Materials, like as to decades. and perhaps significant And on market a this assumption if evolution first be missed the what about the quarter if second confidence how called it first would with I we the the multiple already quarter by back this one you seems you've to it And us sorry in half that middle you the I think year? just impact the of supports associated insight I'm biggest give out, of and the on quite the specific more guess the then but normalization bit of that into off, pricing should which Can

apparel So recovery, the I'll let question. Ghansham, on and Materials the Greg handle

seeing the in of a factors recovery, couple play. On we're apparel

quarter our we saw rates, pretty to yet in significantly all apparel XXXX been the levels. Europe, apparel that some last And in particularly import clear we've America. in improvement but in slight is North in think what below continue imports particularly along America, North I not be

many quarter. feel hadn't comfortable That where the to that spoken into having board. inventory -- the that they until at across know also they're case up having we the are customers their our first volumes now got the very been place of generally We

as imports combination And I some know that recover underpin as uncertainty apparel by speak the believe, of weighing with tend come where think of back the in that customers, And uncertain we to we seeing apparel fact conversations midyear, slowly the normalize. the their and we'll as their is all well seeing sentiment are. of the starting that while environment we would that into fact are they're sourcing, see we inventory some still in our near-term certainly that volumes to levels

on Overall, volume by our quarter. Ghansham, in Yes. when in by as offset offset X double your up And -- was second we low factors. And quarter. the question, talked partially at was Materials about, look digits that we the

prices was those high to of the more of in destocking last lower business, our single per unit. which that or some digits One price, with down of mid- generally year, as place base down digits then versus that was in mix quarter as also -- single well low less took

sequential headwind. We're the year, that deflation starting on quarter, second price Now our from followed starting in pricing see piece, kind that. of year-over-year and of a last biggest QX the really some really to is the perspective

biggest I be will well. QX. doing pricing we And the think in inflation remarks, targeted second sequential to in see of quarter mentioned I as we actions some with year-over-year that the some that are the pricing earlier prepared as headwind So deal

sequentially pricing to bit a to from QX expect we up QX. So go

the Our of McNulty next comes line John Markets. Capital BMO from from question

Group I unpack. lot wanted the margin, seems it looks to to record Materials dig because it there's like like was a a into which

or think had Europe. you've normalized back to in of You the made you're about. levels kind cost lot to a a of pull cuts, bit same At look, of levels getting more time, volume forward

help about the we level 'XX think through and us of as go of you to forward? sustainability So look can margin I this guess kind

Yes. Thanks, John.

year-over-year is a the even driver you really, called lot increase. look out and the of buckets, volume think I So the of when sequentially, big margin you

destocking So us improvement very had we behind year-over-year, And we obviously, that QX talked we is back as had now. well some in it's significant. as an about still sequentially,

Materials The other thing that the productivity. been significantly doing has business is driving

just some of is ongoing team as actions restructuring that as productivity well got So large drive. the to we've initiatives ELS type continuing

significant they're a productivity So in margin the expansion largely and volume comp those initiatives talked I incentive headwind driving that about inflation minute really are offsetting ago. wage and

teams driving really good the doing a been job that. have So

forward, EBITDA set getting think the look I in about we we XXXX talked We back Materials margins When around targets I for that about quarter, our that cycle ends in XX% level. XXXX. last talked

quarter that target delivered back in clearly, we we've as gotten the last is our well. And here on and to year to Now half that as first the pretty focus in deliver close of continuing long-term that stated.

us And business really, or continue to future always, for been drivers margins, capital our balancing this as Materials well. those focus to drive businesses, EVA EVA has growth, time, going we're balancing into for business time. line and incremental a the a to driver And a all balancing growth our the over top in all EVA it's deliver in on our long efficiency, big our as

years historically our normalized where a limited they the perspective, we that quarter the clear been have more They're in that ended that the third from in visibility Europe own destocking out roughly end more CPG last the had thought now of there with the last X.X And are just more me the quarter we in inventory there. has we're market as U.S. of of customers been conversation end play let were. of And much add in volumes confidence year than John, fourth expanded. sort their very and And to year. demand seeing over seeing were it

the still normalized relatively the being also And macro in put more fact the I low, Europe. in in to and starting volumes. we States United volumes see to of context underpinned retail continue both that so we're that also see

so the caution And that also well. continued some as speaks think I in there just confident outlook normalization, our to there forward being still while out is

next of from Our Pettinari the from question Anthony line comes Citigroup.

Bryan actually It's in for Anthony. Burgmeier sitting

price? caught in up of you can second type how you Avery believe a half quarter. of has takes paper a handled remind of net it to the on of Just the the year? and cited how on I do get know Europe, costs And order kind finished costs us the Or now rising with maybe bit headwind next you in inflation the typically margin in long patterns just past? resolved, paper this strikes you Can normalize

Thanks Yes. Bryan.

'XX, we've expect least. at traditionally, narrowed 'XX to a So talked amount. when a bit the frame smaller it months about to quarter about were a pricing we we time sequential of And had taking to from inflation inflation, we and to the seeing we back gap much quarter, from start implement sequential in some that that stick each pretty that time X see significant

just of we're the over inflation to QX. part see starting think I back sequential this

So couple would place to part mid- get we of in some in that months point late the a take it expect in to QX. to of

in don't So that us. far materials raw in Materials of see aren't markets, we visibility overall, our front our on

on right So QX. focused really in what seeing we're now we're

we not now, a of this have to don't but perspective at right much lot past happen from a material QX raw past too that, point. So visibility expecting

followed And when that now I'd significant inflation Bryan, one saw to the and thing. is by port concluded. into then related this then ended and strike, in period particular Europe that here, 'XX all over add That's which in has 'XX the in unlike good deflation, Finnish and we is

see ripple very we approach. some to. think we're our those But effects still be the pricing to I alluded tend as as market has through, leader, come to of going Greg in disciplined

those we're balance unwind managing of as respond sure see with the custodians industry the the tend and when tend and health deflation, that industry, the of well. increases. to make tend as the And we to to well inflation, we we when productivity to so price And we both see appropriately

line from question Jeff Zekauskas from of the comes JPMorgan. Our next

was I XX I your description of in at And organic the Solutions. looked at in looking your Slide percentages. your growth

XX%, X.X%. XX%, another something up you get at then and And if XX%, your high-value low X% digits, categories. double are Intelligent if And base growing so up that's that's from Labels growing is categories

flat? and simply sequentially? something follow shrink? that's know, then your X%. percentages, Did they some did Solutions, don't secondly, like high-value Labels they you is if organic be, Is grow looks Or the So I it your close included And to acquisition there it else? revenues should categories? growth Intelligent Were your maybe

Yes. Thanks, Jeff.

So I that Labels categories it's chart XX% on that in Solutions think your the shows point, around to total Intelligent and includes high-value of segment.

There look up large it a large single said, when digits you growth in overall So in the And base as is is at categories high-value currency piece X growth which kind of to addition low acquisitions that, the in We on of significantly in of business portion or in space. there portion we as is a the ex the well. that. quarter. year. -- are part high-value External year-over-year our acquisitions segment did that Embellishment category our that's last

Jeff, in apparel the QX terms for And overall second and logistics. dollar apparel watermark revenue it your QX. QX for lower sequentially IL Recall is as was both business, question, And a high an is were. quarter logistics a lower Enterprise than to from our sequentially

Spector from line Our from next of question comes the Josh UBS.

of a the in quarter. wanted So bit the second cadence dig earnings more into I to on little

maybe forward. that I lower if I called are what the of drive frankly, Materials out something if down that like else look guess the would and at pull all you're seasonality sequentially. $X.XX. that's normal I to here? you I history, factors $X.XX $X.XX say sequentially So the guess offset Greg, modestly, would other be typically, up margins

Yes.

we the been the we base inflation little to has unique ago, XXXX. destocking QX, from we with volume mentioned generally, Year, apparel bit that benefit we Lunar our At and destocking I that Josh, seasonality like as from expect Asia in we from about, to the little So as benefit talked from minutes pretty cover few seasonality in But XXXX New the a said, same of impact the quarter, talked a inland takes QX. then business you we lot have in and bit, get in ] QX some few would saw little XXXX that. in us I a years about seasonality had a sequential point, of moving as just a a of last [ QX first to

kicks our on in inflation year. also generally each And annual X April wage for us

from sequential we implementing as perspective be that's a we'll QX but well. headwind So cost QX. when cover to productivity that, And a is obviously initiatives it impact a to sequential look

pull up Without our then sequentially and be said, again, without brings as I forward, business, down. that kind would that. underlying it the of So pull forward

comes the Loop Capital Our next from of line Kapsch question Chris from Markets.

efforts strategically level it's beyond to paradigm conversations a into is Based given of a little your bear value say, apparel recent on shipping and sidebar straightforward vertical the like opportunity. Label And brings had pricing my cost-plus our with and use example. adoption about focused logistics, to a So be for but sort might addressing of program the value bit that we've conference, just question Intelligent labels, a on in selling expands RFID techniques solution sort this, more at other we case a that more of verticals. application item the -- beyond that talked to capture more traditional, or

to stock value for help with outs wondering proposition brings of that shrink help or sales. or like in just something that a or or case inventory to use replenishment I'm terms to So accuracy prevent

going? approaching going potential this is selling if for this persist that as new cases And forward? wondering How could margins that potential that terms these Just sort growth proposition? use in the of value paradigm is of of that something change business with more

help the I adjacent think Xx an just order of opportunity question. magnitude, potential growth or the is relative X only for XX Logistics or such still Yes, of to physical why those some RFID these I'll scale the of capability of we the billion had I management And data the and Chris, digital food segments billion. capabilities and both an connect categories. opportunity the nascency units our we business are at there apparel science conviction our well, and as of so XX is have is we're to before, other in said apparel than around the sort we just penetrated. that all discussion of around material in by is the of so larger where XX in opportunities our And well. as see Chris, have And reasons we total. in remind, Thanks, one leveraging the

as adoption And look manifest we're see as that that benefits when forward gives broader this. you the think we've now believe markets us segment the to there in these look confidence segments, are investing that be And we know been to we and adopt, slowly are in start starting will at as to ubiquitous those well. that also we

think that building bear a those is one approach the we've scale on is been opportunities. to we've these we're is that we've Chris, in of bring into of which able the to the as the taken, looked for what solution I total segments while, differentiation

a we're in of customers the easier the of of clearly, of differentiated we're large pilots some the rollouts have the right come our is trials providing recover, premium now. and to of us and that some the that bear regard. doing we're is more that actually but that value it in we're for And of the small seeing opportunity scale also to value And to more able

as play science our years larger at concept infancy, in but is we broader technology, it a its think forward, will think future sensing part I we I move of come. as including solution having a hardware, to material move forward the in the sell, software,

the Our comes of next line Michael question Roxland from Securities. Truist from

Piccini Nico on is Mike for This today.

-- delve and change that this deployment quarter-to-quarter. tentative timing You just for benefit can first a year? touched kind I but might believe, that industries on through, looks hoping But of these large like company that could Recognizing in other the IL what you're programs of there's deployments that the cadence a think half. this you a us logistics there Could working still more. any year? are XXXX, give you call far it the on we I so IL in maybe pilot today, read

we Nico, seeing basically have, the the current or that of are the an that year programs is expansion. the rollout all we're unfold way in forecast

confidence that have continue do will they We that. to

department to, those may X X there quarters Now switched categories. is always Where and particularly things that terms changes than have our the And we we adoption that in are at effort of drive trials, we and in see when moment. trying planned be currently focused broader or logistics, pilots food the on anticipating. that quicker adoption and helps industry move to that, more we're

across took compelling new segments I in it that visible those customers going case a benefits started back these is of the we and overall, think sure know if I some benefits X X be but very getting step to or industry. are is the making to that down

as of episodic. And see that's lumpy typically when be history the apparel. be can those resonate. we well seen adoption as very start we've to They can And in that context,

the technology and we look case proven. apparel case. And new as rollout both remain -- technology in the these the that so because between that's parallel is validate other segments not business we is the over one prove now difference time, know and have the we segments the the to That at doesn't original

time. and and in And to companies across moment, pilots in of full so range in we're doing trials the broader a logistics make rollout bringing we're to benefits that working broader the that there, them we hard, we're a at discussions food companies sure range the we're and the are can of see having clearly including

of from of America. Our the George line Staphos from next Bank question comes

just them in ask it sequence over then backlog clear I'll turn the and to to everybody else.

much resume couple you're paper of your now, it's still if to on assume not improved just affirm in experience over, on still not access going a time clear ability of supply they're couple sure again little there what ago. done but that know could the nature resume, you've but are your you've to sort a this strikes, give I if you of you whether to in need ultimately a versus to, make political So more the I ago, around color years and position. for years Finnish recognizing from they the that bit chains strikes good of that and they're

politics, vantage in a it label from but is America parcel the across been the it's come effect Has in being that like on seem Secondly, bit a bit cooler year? shipments like factor of a in see your weather of point that you had weather later your consumption any larger and North terms little there's does in local, regions back lot might a of weather.

just helpful couple it you've it's I that back that internal assume assume indicators. some because that where of thing. gotten means that's slide we show and should had I good normal, a quarters but see your lastly, over we're of then And deck, we've normal, the this in didn't to back last to you

George. then I'll deal one. the and last Greg take the can Thanks, with first

is time it the As doesn't that forward, preclude yes, that well, resolution it Finnish strike, to the as relates but fact moving that in it's the may current as is, change resolved, George.

we I chain that fairly significant we the supply thing dramatically. when specifically broadened deepened went chain think on the our since We've experience One, the through and we X saw we've is elements. lent last constraints. supply have

the multi-supplier period single of just seen we source, more this multiregional during sources materials no source. no have regional longer one reasons of but and why Our raw are interruption they are ourselves. And

because that In we as service well. world actually put resilience excellence supply chain fact, our the into our across this improved have we

both understand converters perspective that various and into consumption how to and the inventory really also think as end and be to deeply from trying customers we've likely is relates a is process CPGs, our the our data a across levels where second I to well. thing retail lent

do what helps our own as and we in greater give that chain that think us well. supply confidence in how we I manage

relates uncertain. certainly and lower -- are now We I shipments. slightly as that think how domestic are parcel think the moment, local shipments parcel public I And U.S. parcel shipments to and retail remains as I parcel be GDP knowledge saw well. by U.S. think it anticipation to that I is still well. that's that largely at think going And our characterized goes

Thanks, Yes. Deon.

back slide, to us about, George, normal. I point, business your materials We internal I the is behind we've the we've getting talked think said. indicator on destocking think to our mean as as is So Yes.

provide we're a couple of in business why that direction minutes the getting as didn't about there as least. right to talked there. in are ago, also back Deon in at And indicators heading those apparel, given or really normal I to we we of think need part So well, that

that continue back kind feel of We confident to by more there. normalized midyear, levels we're to

back So course getting as more a to year. here just we as move of normalized the said, you through the we're state

this now there back further at the call to I remarks. any no Stander, closing you are Mr. for questions turn time. will

joining for environment the while position our the we our remain deliver extremely And all term. growth over ability dynamic, Thank today. returns Thank confident Good day. GDP-plus quartile remain and all. the and and call top you longer you does you to in our to prospects

for your that gentlemen, does please and conclude Ladies disconnect for conference and today. you the call We participation your lines. ask you thank that