Kontoor Brands Inc. (NYSE:KTB) posted stronger-than-expected fourth-quarter results on Tuesday, with adjusted earnings and revenue both beating Wall Street projections, helped significantly by the addition of Helly Hansen.
Adjusted earnings per share came in at $1.73, topping the consensus estimate of $1.65 by $0.08. Revenue rose to $1.02 billion, ahead of analyst expectations of $975.09 million and up 46% from the same period a year earlier.
Shares gained 1.67% in premarket trading following the earnings announcement.
The sharp increase in sales was largely fueled by the Helly Hansen acquisition, which accounted for 36 percentage points of the overall growth. Stripping out the impact of Helly Hansen and the benefit of a 53rd trading week, revenue advanced 2% year over year.
By brand, Wrangler delivered a 12% increase in revenue to $562 million, while Lee posted a 2% rise to $198 million. Helly Hansen generated $254 million in quarterly sales.
Profitability also improved. Adjusted gross margin expanded by 210 basis points to 46.8%, including a 180-basis-point contribution from Helly Hansen. Adjusted operating income climbed 48% to $150 million, or 14.8% of revenue, marking a 30-basis-point improvement from a year earlier.
“We had a strong finish to the year driven by better-than-expected revenue, earnings and cash generation,” said Scott Baxter, President, CEO and Chairman. “2025 was a transformational year for Kontoor, highlighted by the acquisition of Helly Hansen, strong growth in Wrangler and disciplined execution.”
Looking ahead to fiscal 2026, Kontoor issued guidance that exceeded earnings expectations. The company forecasts adjusted EPS of $6.40 to $6.50, with a midpoint of $6.45 well above the analyst consensus of $5.96. Revenue is projected between $3.40 billion and $3.45 billion, with the midpoint of $3.425 billion slightly below the $3.45 billion consensus estimate.
The outlook reflects the anticipated impact of higher tariffs on sourcing countries, with the exception of Mexico, which remains exempt under the USMCA trade agreement. For fiscal 2026, Kontoor expects adjusted gross margin in the range of 47.2% to 47.4% and adjusted operating income of $506 million to $512 million.