Kontoor Brands (NYSE:KTB) Posts Earnings Results, Misses Expectations By $0.11 EPS

Key Points

• Kontoor Brands reported quarterly EPS of $1.06, missing estimates by $0.11, and revenue of $613.3 million also came in well below expectations. Despite that, revenue was still up 45% year over year.
• The company raised its FY 2026 EPS guidance to 6.600-6.700, suggesting management remains confident in the longer-term outlook after the quarter.
• Kontoor said it will divest the Lee brand to focus on Wrangler and Helly Hansen, while also highlighting strong momentum in Helly Hansen and plans to expand shareholder returns through a $750 million share repurchase program.

Kontoor Brands (NYSE:KTB - Get Free Report) posted its quarterly earnings results on Thursday. The company reported $1.06 earnings per share (EPS) for the quarter, missing the consensus estimate of $1.17 by ($0.11), Zacks reports. Kontoor Brands had a net margin of 8.81% and a return on equity of 55.20%. The firm had revenue of $613.32 million for the quarter, compared to analyst estimates of $784.76 million. During the same period in the prior year, the company posted $1.20 earnings per share. The business's revenue was up 45.0% on a year-over-year basis. Kontoor Brands updated its FY 2026 guidance to 6.600-6.700 EPS.

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

• Kontoor announced it will divest the Lee brand to sharpen focus on Wrangler and Helly Hansen; the company says the competitive sale process has attracted strong interest and it expects to enter an agreement later this year.
• First-quarter results were strong: adjusted EPS rose 67% to $1.06 and adjusted gross margin expanded 470 basis points to 50.6%, with Helly Hansen contributing about $0.26 per share and ~200 bps of margin accretion.
• Lee is now reported as discontinued operations, which shifts roughly $40 million of unmitigated expenses onto continuing operations in the near term, though management expects the divestiture to be “immaterial to EPS” over 12–18 months as overhead mitigation and capital deployment offset the impact.
• Management positions Helly Hansen as a growth engine — Q1 pro forma revenue rose >20% including the China JV — and plans accelerated investment in the U.S., Alps, technical outdoor and footwear to reach a mid‑teens operating margin over time.

Kontoor Brands Price Performance

Shares of Kontoor Brands stock opened at $73.47 on Friday. The firm has a market cap of $4.06 billion, a P/E ratio of 14.87 and a beta of 0.91. The firm's 50-day simple moving average is $71.26 and its 200-day simple moving average is $69.29. Kontoor Brands has a twelve month low of $53.55 and a twelve month high of $87.00. The company has a debt-to-equity ratio of 1.83, a quick ratio of 0.87 and a current ratio of 1.87.

Kontoor Brands Dividend Announcement

The firm also recently announced a quarterly dividend, which will be paid on Thursday, June 18th. Stockholders of record on Monday, June 8th will be given a dividend of $0.53 per share. This represents a $2.12 annualized dividend and a dividend yield of 2.9%. The ex-dividend date is Monday, June 8th. Kontoor Brands's payout ratio is 42.91%.

More Kontoor Brands News

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

• Positive Sentiment: Kontoor reported stronger-than-expected Q1 adjusted earnings and raised its full-year outlook, signaling improving profitability and confidence in the business. Business Wire article
• Positive Sentiment: The company said revenue rose 45% year over year, helped by strong Helly Hansen performance and Wrangler market-share gains, which suggests core brand momentum. Business Wire article
• Positive Sentiment: Management announced a planned divestiture of the Lee brand and a $750 million share repurchase program, moves that could streamline the portfolio and support shareholder returns. Business Wire article
• Neutral Sentiment: Some early coverage emphasized that quarterly revenue missed Wall Street estimates even though earnings beat expectations, which may be limiting enthusiasm. Zacks article

Wall Street Analyst Weigh In

A number of analysts have recently weighed in on KTB shares. Jefferies Financial Group started coverage on Kontoor Brands in a research report on Wednesday, February 4th. They set a "hold" rating and a $65.00 price target on the stock. UBS Group boosted their price objective on shares of Kontoor Brands from $118.00 to $131.00 and gave the company a "buy" rating in a research report on Wednesday, March 4th. Wall Street Zen lowered Kontoor Brands from a "strong-buy" rating to a "hold" rating in a report on Saturday. Barclays increased their price target on Kontoor Brands from $74.00 to $93.00 and gave the company an "overweight" rating in a report on Wednesday, March 4th. Finally, Wells Fargo & Company lifted their price target on shares of Kontoor Brands from $95.00 to $100.00 and gave the company an "overweight" rating in a research report on Wednesday, March 4th. Two equities research analysts have rated the stock with a Strong Buy rating, five have issued a Buy rating, three have assigned a Hold rating and one has given a Sell rating to the company's stock. According to data from MarketBeat.com, the company presently has a consensus rating of "Moderate Buy" and an average price target of $91.00.

Hedge Funds Weigh In On Kontoor Brands

Institutional investors have recently added to or reduced their stakes in the company. Parkside Financial Bank & Trust boosted its holdings in shares of Kontoor Brands by 12.3% in the 4th quarter. Parkside Financial Bank & Trust now owns 1,436 shares of the company's stock worth $88,000 after acquiring an additional 157 shares in the last quarter. Bank of Montreal Can increased its position in Kontoor Brands by 1.8% in the 4th quarter. Bank of Montreal Can now owns 9,297 shares of the company's stock valued at $568,000 after acquiring an additional 164 shares in the last quarter. Stifel Financial Corp increased its position in Kontoor Brands by 0.8% in the 4th quarter. Stifel Financial Corp now owns 24,710 shares of the company's stock valued at $1,510,000 after acquiring an additional 199 shares in the last quarter. Corient Private Wealth LLC raised its stake in shares of Kontoor Brands by 2.8% in the fourth quarter. Corient Private Wealth LLC now owns 10,402 shares of the company's stock worth $636,000 after acquiring an additional 280 shares during the last quarter. Finally, Transamerica Financial Advisors LLC raised its position in Kontoor Brands by 335.5% in the 4th quarter. Transamerica Financial Advisors LLC now owns 405 shares of the company's stock worth $25,000 after purchasing an additional 312 shares during the last quarter. 93.06% of the stock is owned by institutional investors.

About Kontoor Brands

Kontoor Brands, Inc is a global apparel company best known for its Wrangler and Lee denim and lifestyle brands. Established as an independent, publicly traded company in May 2019 following a spin-off from VF Corporation, Kontoor leverages a legacy that dates back to 1889 with the founding of Lee and to 1947 with the introduction of the Wrangler brand. The company focuses on designing, manufacturing and distributing premium, casual and workwear apparel, including jeans, pants, shorts, shirts, jackets and complementary accessories.

Kontoor Brands operates a diversified sales model that combines wholesale partnerships with leading retailers, distribution through e-commerce channels and select direct-to-consumer formats.