Kontoor Brands Reports 2025 Third Quarter Results; Raises

Kontoor Brands Delivers Strong Third Quarter 2025 Results and Raises Full-Year Outlook

GREENSBORO, Kontoor Brands, Inc. (NYSE: KTB), a global lifestyle apparel company that owns Wrangler®, Lee®, and Helly Hansen®, today announced strong financial results for the third quarter ended September 27, 2025, exceeding expectations across key performance metrics.

Our third quarter results surpassed expectations, driven by the strength of our expanded brand portfolio, margin improvement, and operational execution, said Scott Baxter, President, Chief Executive Officer, and Chairman of the Board. “Despite timing shifts in shipments, Wrangler delivered another quarter of broad-based growth and share gains, Helly Hansen exceeded revenue and profitability expectations, and Lee successfully launched its first brand equity campaign in years. With strong year-to-date results and greater visibility ahead, we are raising our full-year outlook and remain on track to deliver a record year.

Third Quarter 2025 Results

Revenue:
Total revenue reached $853 million, a 27% increase year-over-year, including a 2-point impact from shipment timing shifts from Q3 to Q4.

Wrangler®: Global revenue was $471 million, up 2% from last year. U.S. revenue rose 1%, led by an 11% increase in direct-to-consumer, while wholesale was flat due to shipment timing. International revenue grew 6%, supported by higher wholesale and a 12% increase in direct-to-consumer.
Lee®: Global revenue totaled $187 million, down 8% year-over-year, including a $7 million impact from proactive inventory management actions in China. U.S. revenue decreased 9%, reflecting an 11% drop in wholesale offset by 15% growth in digital. International revenue decreased 5%, with wholesale down 7% but brick-and-mortar sales up 8%.
Helly Hansen®: Global revenue was $193 million, including $143 million from Sport, $42 million from Workwear, and $7 million from Musto. U.S. revenue reached $40 million, while international revenue totaled $153 million.

Margins and Profitability

Gross Margin: Reported gross margin was 41.3%, down 340 basis points, while adjusted gross margin increased 80 basis points to 45.8%, including a 60-basis-point impact from Helly Hansen. Excluding Helly Hansen, adjusted gross margin expanded 140 basis points, driven by Project Jeanius initiatives, favorable channel and product mix, and strategic pricing actions.
SG&A: Selling, General & Administrative expenses were $288 million on a reported basis (33.8% of revenue) and $269 million on an adjusted basis (31.5% of revenue). Excluding Helly Hansen, adjusted SG&A remained consistent at $195 million, reflecting lower freight and distribution costs.
Operating Income: Reported operating income was $64 million; adjusted operating income was $122 million, up 14% year-over-year. Adjusted operating margin was 14.3%, down 160 basis points, while excluding Helly Hansen, it rose 100 basis points to 16.9%.
Earnings per Share (EPS): Reported EPS was $0.66; adjusted EPS was $1.44, up 5%, including a $0.03 contribution from Helly Hansen.

Balance Sheet and Liquidity

Kontoor ended the quarter with $82 million in cash and $1.34 billion in long-term debt, after a $25 million voluntary debt repayment. The company had no borrowings under its revolving credit facility and $494 million available for future use.

Inventory stood at $765 million, including Helly Hansen. Excluding the acquisition, inventory was $560 million, up 21% due to Project Jeanius-related supply chain transformations, earlier receipts from improved lead times, and tariff impacts. Inventory is expected to decline to approximately $645 million by the end of Q4, a reduction of about $120 million.

Kontoor’s Board of Directors declared a quarterly dividend of $0.53 per share, a 2% increase, payable on December 18, 2025, to shareholders of record as of December 8, 2025. The company returned $29 million to shareholders during the quarter and has $215 million remaining under its authorized share repurchase program.

Updated Full-Year 2025 Outlook

Given its strong year-to-date performance, Kontoor raised its full-year 2025 guidance, reflecting higher revenue, profitability, and cash generation.

We are raising our outlook to reflect our accelerating growth, operational discipline, and the scaling benefits of Project Jeanius,” said Baxter. “While the environment remains dynamic, our strategy and execution are positioning us to continue delivering strong value creation for shareholders.

Updated 2025 Outlook Highlights:

Revenue: Expected at the high end of the prior range ($3.09–$3.12 billion), up 19–20% year-over-year.
Helly Hansen: Forecast contribution of $460 million in revenue. Excluding Helly Hansen, organic growth is expected to be around 2%.
Q4 Revenue: Projected at $970–$980 million, up 39–40%, including a 4-point benefit from a 53rd week.
Adjusted Gross Margin: Expected at 46.4%, up 130 basis points year-over-year.
Adjusted SG&A: Anticipated to rise 24%, consistent with prior guidance.
Adjusted Operating Income: Forecast at $449 million, up 18% from the prior year.
Adjusted EPS: Expected to be $5.50, up 12% year-over-year, with Helly Hansen contributing $0.20.
Q4 Adjusted EPS: Estimated at $1.64 vs. $1.38 in the prior year.
Cash Flow from Operations: Expected to be approximately $400 million, up from the prior outlook of $375 million.
Capital Expenditures: Around $25 million.
Effective Tax Rate: Approximately 21%.

Kontoor continues to manage the impact of increased tariffs through targeted pricing, optimized sourcing, supplier partnerships, and inventory management. The company expects to substantially offset tariff effects within 12–18 months.

Webcast Information

Kontoor Brands will host its Q3 2025 earnings conference call at 8:30 a.m. ET on November 3, 2025. The webcast can be accessed at https://www.kontoorbrands.com/investors, where a replay will also be available.

About Kontoor Brands

Kontoor Brands, Inc. (NYSE: KTB) is the parent company of three of the world’s most iconic lifestyle, outdoor, and workwear brands — Wrangler®, Lee®, and Helly Hansen®. The company leverages its global platform, strategic sourcing model, and advanced supply chain to drive sustainable growth and long-term shareholder value.

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