Kontoor Brands (NYSE:KTB) Announces Earnings Results, Beats Estimates By $0.38 EPS

Key Points

• Kontoor Brands beat earnings expectations, reporting $1.55 EPS versus the $1.17 consensus estimate. However, quarterly revenue came in at $613.32 million, well below analyst expectations of $784.76 million.
• The company is divesting the Lee brand to focus more on Wrangler and Helly Hansen. Management said the sale process is attracting strong interest and expects an agreement later this year.
• Operational performance improved sharply, with adjusted EPS up 67% to $1.06 and adjusted gross margin expanding 470 basis points to 50.6%. Kontoor also raised its FY 2026 guidance to 6.60-6.70 EPS.

Kontoor Brands (NYSE:KTB - Get Free Report) announced its quarterly earnings data on Thursday. The company reported $1.55 earnings per share for the quarter, topping analysts' consensus estimates of $1.17 by $0.38, Briefing.com reports. Kontoor Brands had a return on equity of 62.02% and a net margin of 7.22%.The firm had revenue of $613.32 million for the quarter, compared to analyst estimates of $784.76 million. During the same quarter in the prior year, the company posted $1.20 earnings per share. Kontoor Brands's quarterly 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 NYSE:KTB traded down $4.60 on Friday, hitting $73.47. The company had a trading volume of 884,099 shares, compared to its average volume of 805,296. The company has a current ratio of 1.82, a quick ratio of 0.87 and a debt-to-equity ratio of 2.01. Kontoor Brands has a 52-week low of $53.55 and a 52-week high of $87.00. The business has a 50 day moving average of $71.26 and a 200 day moving average of $69.29. The company has a market cap of $4.06 billion, a PE ratio of 18.14 and a beta of 0.91.

Kontoor Brands Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, June 18th. Stockholders of record on Monday, June 8th will be given a $0.53 dividend. 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 dividend payout ratio is currently 42.91%.

Institutional Trading of Kontoor Brands

Several institutional investors and hedge funds have recently made changes to their positions in the stock. T. Rowe Price Investment Management Inc. lifted its position in shares of Kontoor Brands by 23.4% in the fourth quarter. T. Rowe Price Investment Management Inc. now owns 1,136,443 shares of the company's stock valued at $69,426,000 after acquiring an additional 215,621 shares in the last quarter. Corient Private Wealth LLC lifted its position 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 valued at $636,000 after acquiring an additional 280 shares in the last quarter. Mercer Global Advisors Inc. ADV purchased a new stake in shares of Kontoor Brands in the fourth quarter valued at $216,000. State of Tennessee Department of Treasury lifted its position in shares of Kontoor Brands by 6.2% in the fourth quarter. State of Tennessee Department of Treasury now owns 29,164 shares of the company's stock valued at $1,742,000 after acquiring an additional 1,707 shares in the last quarter. Finally, EP Wealth Advisors LLC purchased a new stake in shares of Kontoor Brands in the fourth quarter valued at $273,000. 93.06% of the stock is currently owned by hedge funds and other institutional investors.

Analyst Ratings Changes

KTB has been the topic of a number of research analyst reports. Wall Street Zen upgraded Kontoor Brands from a "buy" rating to a "strong-buy" rating in a research report on Saturday, April 18th. Zacks Research upgraded Kontoor Brands from a "hold" rating to a "strong-buy" rating in a research report on Thursday, April 16th. Stifel Nicolaus boosted their target price on Kontoor Brands from $75.00 to $80.00 and gave the stock a "hold" rating in a research report on Tuesday, March 3rd. The Goldman Sachs Group boosted their target price on Kontoor Brands from $84.00 to $95.00 and gave the stock a "buy" rating in a research report on Wednesday, March 4th. Finally, Jefferies Financial Group initiated coverage on Kontoor Brands in a research report on Wednesday, February 4th. They set a "hold" rating and a $65.00 target price on the stock. Two equities research analysts have rated the stock with a Strong Buy rating, five have assigned a Buy rating, three have assigned a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat, Kontoor Brands presently has a consensus rating of "Moderate Buy" and an average target price of $91.00.

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.

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