Kontoor Brands (KTB) Q1 2026 earnings summary

Executive summary

• Announced decision to divest the Lee brand to sharpen focus on higher-growth opportunities with Wrangler and Helly Hansen, aiming to maximize shareholder value and accelerate long-term growth and profitability.

• First quarter 2026 revenue from continuing operations reached $613 million, up 45% year-over-year, driven by 4% growth in Wrangler and 16% growth in Helly Hansen on a pro-forma basis.

• Portfolio transformation includes the successful acquisition and integration of Helly Hansen, with strong performance and growth prospects for both Wrangler and Helly Hansen.

• The divestiture of Lee is expected to reduce operational complexity, enable more concentrated investments, and improve returns on strategic initiatives.

• Board approved a new $750 million share repurchase program, with majority of Lee sale proceeds earmarked for buybacks.

Financial highlights

• Q1 2026 revenue from continuing operations: $613 million, up 45% year-over-year; Wrangler global revenue: $436 million (+4%); Helly Hansen global revenue: $176 million.

• Helly Hansen global revenue grew 16% year-over-year (reported), with strong performance across North America, Europe, and China JV; pro forma global revenue up over 20%.

• Adjusted gross margin expanded 470 bps to 50.6%, with Helly Hansen accretive by 200 bps.

• Adjusted operating income from continuing operations: $87 million, up 60% year-over-year; adjusted EBITDA from continuing operations: $103 million (16.9% of revenue).

• Inventory at quarter-end was $464 million; cash and cash equivalents at $56 million; net debt $1.1 billion.

Outlook and guidance

• Full-year revenue (including discontinued operations) expected at $3.41–$3.46 billion; continuing operations at $2.66–$2.71 billion.

• Full-year adjusted EPS (including discontinued operations): $6.60–$6.70; from continuing operations: $5.15–$5.25.

• Full-year adjusted gross margin from continuing operations expected at 48.3%–48.5%, up 180–200 bps year-over-year.

• Adjusted operating income from continuing operations expected at $411–$418 million.

• Cash from operations expected to approximate $450 million for the year; capital expenditures projected at $40 million.