Kontoor Brands, Inc. (NYSE:KTB) reported third-quarter earnings that surpassed expectations on Monday, as strong execution and an expanded brand portfolio helped offset a modest revenue miss. The company also raised its full-year outlook, citing continued momentum across key categories.
The parent of Wrangler, Lee, and Helly Hansen posted adjusted earnings of $1.44 per share, topping analyst estimates of $1.36. Revenue totaled $853 million, slightly below the consensus estimate of $855.6 million, with management noting that a two-point shift in shipment timing from Q3 to Q4 impacted the topline.
Adjusted gross margin rose 80 basis points year-over-year to 45.8%, supported by Project Jeanius cost efficiencies, a favorable product mix, and strategic pricing actions.
“Our third quarter results exceeded expectations driven by the strength of our expanded brand portfolio, gross margin expansion, and operational execution,” said Scott Baxter, President, CEO, and Chairman of Kontoor’s Board. “While a shift in the timing of shipments impacted revenue growth, Wrangler drove another quarter of broad-based growth and market share gains.”
By brand, Wrangler’s global revenue grew 2% to $471 million, Lee declined 8% to $187 million, and Helly Hansen, acquired earlier this year, contributed $193 million.
Looking ahead, Kontoor raised its full-year EPS guidance to approximately $5.50, up from its prior $5.45 forecast and above the analyst consensus. The company now expects revenue at the high end of its $3.09–$3.12 billion range, representing 19–20% year-over-year growth.
Kontoor also continued to strengthen its balance sheet, making a $25 million voluntary term loan repayment in Q3 and planning an additional $185 million payment in Q4, underscoring its strong cash generation and financial discipline.