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

Kontoor Brands (NYSE:KTB) posted its quarterly earnings data on Thursday. The company reported $1.50 EPS for the quarter, topping analysts’ consensus estimates of $1.34 by $0.16, FiscalAI reports. Kontoor Brands had a return on equity of 59.71% and a net margin of 8.21%. The company had revenue of $685.35 million for the quarter, compared to analyst estimates of $694.18 million. During the same period in the previous year, the firm earned $1.44 earnings per share. The firm’s quarterly 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 Down 3.2%

Kontoor Brands stock traded down $2.59 during mid-day trading on Thursday, reaching $79.37. The stock had a trading volume of 1,714,439 shares, compared to its average volume of 767,495. The firm has a market capitalization of $4.34 billion, a PE ratio of 13.18 and a beta of 0.85. Kontoor Brands has a fifty-two week low of $56.19 and a fifty-two week high of $88.96. The stock’s 50-day simple moving average is $70.49 and its 200-day simple moving average is $72.86. The company has a debt-to-equity ratio of 1.82, a quick ratio of 0.99 and a current ratio of 1.83.

Kontoor Brands Increases Dividend

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

Insider Buying and Selling at Kontoor Brands

In other Kontoor Brands news, EVP Thomas Doerr, Jr. sold 7,660 shares of the firm’s stock in a transaction 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 transaction, the executive vice president directly owned 25,063 shares of the company’s stock, valued at approximately $2,091,006.09. This trade represents a 23.41% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, CEO Scott Baxter sold 184,403 shares of Kontoor Brands stock in a transaction dated Thursday, August 13th. The shares were sold at an average price of $83.40, for a total transaction of $15,379,210.20. Following the transaction, the chief executive officer owned 261,786 shares of the company’s stock, valued at $21,832,952.40. This represents a 41.33% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Corporate insiders own 1.80% of the company’s stock.

Key Stories Impacting Kontoor Brands

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

Analyst Ratings Changes

A number of brokerages have recently issued reports on KTB. Wells Fargo & Company boosted their price target on shares of Kontoor Brands from $100.00 to $110.00 and gave the stock an “overweight” rating in a research report on Wednesday, August 12th. UBS Group increased their price objective on shares of Kontoor Brands from $131.00 to $136.00 and gave the stock a “buy” rating in a research report on Thursday, August 13th. Jefferies Financial Group raised shares of Kontoor Brands from a “hold” rating to a “buy” rating and lifted their target price for the stock from $82.00 to $89.00 in a research note on Wednesday, October 14th. JPMorgan Chase & Co. upped their price target on shares of Kontoor Brands from $90.00 to $105.00 and gave the company an “overweight” rating in a research report on Tuesday, August 4th. Finally, BTIG Research reaffirmed a “buy” rating and set a $105.00 price objective on shares of Kontoor Brands in a research report on Tuesday, September 15th. Seven analysts have rated the stock with a Buy rating, four have assigned a Hold rating and one has given a Sell rating to the company. According to data from MarketBeat, the company presently has an average rating of “Moderate Buy” and a consensus price target of $96.56.

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.