Kontoor Brands (NYSE:KTB) Announces Quarterly Earnings Results, Beats Estimates By $0.16 EPS

Key Points

• Kontoor Brands reported adjusted EPS of $1.50, beating the $1.34 consensus estimate and rising from $1.44 a year earlier.
• Revenue was $685.35 million, below the $694.18 million estimate; reported revenue fell 19.7% year over year, while continuing-operations revenue increased 3%.
• Management raised its full-year adjusted EPS outlook to $5.40 and plans $450 million in fourth-quarter share repurchases following the Lee sale.

Kontoor Brands (NYSE:KTB - Get Free Report) posted its quarterly earnings data on Thursday. The company reported $1.50 earnings per share for the quarter, topping the consensus estimate of $1.34 by $0.16, FiscalAI reports. Kontoor Brands had a net margin of 8.21% and a return on equity of 59.71%. The firm had revenue of $685.35 million during the quarter, compared to analysts' expectations of $694.18 million. During the same quarter in the previous year, the company posted $1.44 EPS. Kontoor Brands's revenue was down 19.7% on a year-over-year basis.

Here are the key takeaways from Kontoor Brands' conference call:

• Third-quarter continuing-operations revenue rose 3% to $685 million, while adjusted gross margin expanded 230 basis points to 48.1% and adjusted EPS increased 40% to $1.50. Kontoor raised its full-year outlook to adjusted EPS of $5.40, up 31%, and gross margin of 50.0%–50.2%.
• Wrangler’s U.S. men’s-bottoms POS softened to 1% growth in September, and retail partners’ inventories were down at a high-single-digit rate. The company expects Wrangler revenue to grow about 1% in Q4, assuming continued cautious retailer inventory management and no improvement in POS trends.
• Helly Hansen revenue grew 3% in the quarter, and year-to-date revenue was up 8% on a reported pro forma basis, ahead of Kontoor’s acquisition plan. Management expects Q4 growth of about 5% and said its 2027 plans remain in line with the brand’s longer-term growth strategy.
• Kontoor closed the Lee sale for $698 million in net proceeds and plans $450 million of Q4 share repurchases, including a $400 million accelerated program, plus $280 million in voluntary debt payments. The company expects to return about $1 billion of capital this year through buybacks, dividends, and debt reduction.
• Management set a 2027 adjusted EPS floor of $6.60, representing more than 20% growth, and expects cash from operations of at least $325 million. The outlook includes elevated one-time costs and about $30 million of incremental full-year tariff expense; Kontoor expects cash flow to exceed $400 million beyond 2027.

Kontoor Brands Stock Performance

KTB stock traded down $2.59 during trading hours on Thursday, hitting $79.37. 1,714,439 shares of the stock were exchanged, compared to its average volume of 767,495. Kontoor Brands has a 12 month low of $56.19 and a 12 month high of $88.96. The firm has a market capitalization of $4.34 billion, a P/E ratio of 13.18 and a beta of 0.85. The company has a 50-day simple moving average of $70.49 and a two-hundred day simple moving average of $72.86. The company has a current ratio of 1.83, a quick ratio of 0.99 and a debt-to-equity ratio of 1.82.

Kontoor Brands Increases Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Friday, December 18th. Stockholders of record on Tuesday, December 8th will be issued a dividend of $0.54 per share. This is a boost from Kontoor Brands's previous quarterly dividend of $0.53. This represents a $2.16 dividend on an annualized basis and a dividend yield of 2.7%. The ex-dividend date is Tuesday, December 8th. Kontoor Brands's dividend payout ratio is presently 44.26%.

Insider Buying and Selling at Kontoor Brands

In other Kontoor Brands news, EVP Thomas L. Doerr, Jr. sold 7,660 shares of the firm's stock in a transaction that occurred on Thursday, August 13th. The shares were sold at an average price of $83.43, for a total value of $639,073.80. Following the sale, the executive vice president owned 25,063 shares in the company, valued at $2,091,006.09. This trade represents a 23.41% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is available at this link. Also, CEO Scott H. Baxter sold 184,403 shares of Kontoor Brands stock in a transaction that occurred on Thursday, August 13th. The stock was sold at an average price of $83.40, for a total transaction of $15,379,210.20. Following the sale, the chief executive officer owned 261,786 shares in the company, valued at approximately $21,832,952.40. This represents a 41.33% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Corporate insiders own 1.80% of the company's stock.

Analyst Upgrades and Downgrades

Several equities research analysts have recently commented on KTB shares. UBS Group lifted their target price on Kontoor Brands from $131.00 to $136.00 and gave the company a "buy" rating in a research note on Thursday, August 13th. Jefferies Financial Group raised Kontoor Brands from a "hold" rating to a "buy" rating and upped their price target for the company from $82.00 to $89.00 in a research note on Wednesday, October 14th. Barclays raised their price target on Kontoor Brands from $96.00 to $99.00 and gave the company an "overweight" rating in a report on Thursday, August 13th. JPMorgan Chase & Co. lifted their price objective on Kontoor Brands from $90.00 to $105.00 and gave the stock an "overweight" rating in a research report on Tuesday, August 4th. Finally, Wells Fargo & Company boosted their price objective on Kontoor Brands from $100.00 to $110.00 and gave the stock an "overweight" rating in a report on Wednesday, August 12th. Seven investment analysts have rated the stock with a Buy rating, four have given a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat, Kontoor Brands currently has a consensus rating of "Moderate Buy" and a consensus price target of $96.56.

More Kontoor Brands News

Here are the key news stories impacting Kontoor Brands this week:

• Positive Sentiment: Q3 earnings were $1.50 per share, above the $1.34 consensus estimate and up from $1.44 a year earlier. Zacks earnings report
• Positive Sentiment: Kontoor raised its 2026 earnings outlook and expects to repurchase $450 million of shares after completing the Lee divestiture. Management also cited growth at Wrangler and Helly Hansen and gross-margin expansion. Kontoor Brands third-quarter results and outlook
• Negative Sentiment: Revenue was $685.3 million, below analysts’ $694.2 million estimate, and down 19.7% from a year earlier. The sales shortfall and steep year-over-year decline may temper enthusiasm for the earnings beat and outlook upgrade. Q3 revenue compared with estimates

About Kontoor Brands

Kontoor Brands, Inc NYSE: KTB is a global lifestyle apparel company focused on denim and casualwear. Its portfolio includes the Wrangler and Lee brands, as well as Rock & Republic, offering jeans, shirts, jackets, tops, bottoms, accessories and related products for men, women and children.

The company sells its products through wholesale customers, including department stores, specialty retailers and mass merchants, as well as through company-operated stores and e-commerce channels. Kontoor serves consumers in North America and international markets, with products distributed across multiple regions worldwide.

Kontoor Brands became an independent publicly traded company in 2019 following its separation from VF Corporation.

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