Kontoor: Q3 Earnings Snapshot

Kontoor Brands Reports Third Quarter 2022 Results

"We are encouraged by our progress in the third quarter, delivering strong top-line growth and improving profitability despite ongoing macro challenges," said Scott Baxter, Kontoor Brands' Chief Executive Officer. "Our focus on operational excellence and disciplined execution is enabling us to navigate the current environment while continuing to invest in our strategic initiatives."

Key Financial Highlights

• Net revenue increased 6% to $674 million, driven by growth in both the Wrangler® and Lee® brands.
• Gross profit increased 9% to $290 million, resulting in a gross margin expansion of 120 basis points to 43.0%.
• Adjusted operating income increased 15% to $102 million.
• Adjusted net income increased 14% to $72 million, or $0.42 per diluted share.
• Diluted EPS was $0.41, compared to $0.36 in the prior year period.

Segment Performance

Wrangler® Brand

• Net revenue increased 9% to $409 million.
• Gross profit increased 12% to $175 million.
• Adjusted operating income increased 19% to $69 million.

Lee® Brand

• Net revenue increased 2% to $265 million.
• Gross profit increased 4% to $115 million.
• Adjusted operating income increased 8% to $33 million.

Outlook

For the full year 2022, Kontoor Brands expects:

• Net revenue growth of approximately 4-5%.
• Gross margin expansion of approximately 50-75 basis points.
• Adjusted operating income growth of approximately 8-10%.
• Adjusted net income growth of approximately 9-11%.

"As we enter the holiday season, we are well-positioned to deliver on our commitments," said Baxter. "We remain confident in our long-term strategy and believe that we are on track to achieve our financial targets."

Kontoor Brands, Inc. is a global lifestyle apparel company, designing, manufacturing, sourcing, and marketing a portfolio of iconic brands including Wrangler®, Lee®, EVERLAST®, Rock & Republic®, and SPIEWAK®. Kontoor Brands' purpose is to create apparel that empowers people to express themselves and connect with others. Kontoor Brands sells its products in wholesale and retail channels across more than 100 countries.