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

Kontoor Brands (NYSE:KTB) announced its earnings results on Thursday. The company reported $1.50 earnings per share (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 firm had revenue of $685.35 million during the quarter, compared to analysts’ expectations of $694.18 million. During the same quarter in the prior year, the business earned $1.44 earnings per share. The company’s 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 Performance

KTB traded down $2.59 on Thursday, hitting $79.37. 1,714,439 shares of the stock traded hands, compared to its average volume of 767,495. Kontoor Brands has a 52 week low of $56.19 and a 52 week high of $88.96. The company has a current ratio of 1.83, a quick ratio of 0.99 and a debt-to-equity ratio of 1.82. The firm has a market capitalization of $4.34 billion, a PE ratio of 16.57 and a beta of 0.85. The business has a fifty day moving average price of $70.49 and a two-hundred day moving average price of $72.86.

Kontoor Brands Increases Dividend

The company also recently declared a quarterly dividend, which will be paid on Friday, December 18th. Investors of record on Tuesday, December 8th will be paid a dividend of $0.54 per share. This is a positive change from Kontoor Brands’s previous quarterly dividend of $0.53. This represents a $2.16 annualized dividend and a yield of 2.7%. The ex-dividend date is Tuesday, December 8th. Kontoor Brands’s dividend payout ratio is presently 44.26%.

Analyst Upgrades and Downgrades

A number of research firms have recently commented on KTB. Wells Fargo & Company lifted their price target on shares of Kontoor Brands from $100.00 to $110.00 and gave the company an “overweight” rating in a research report on Wednesday, August 12th. Zacks Research upgraded shares of Kontoor Brands from a “strong sell” rating to a “hold” rating in a research note on Thursday, July 9th. Barclays lifted their target price on shares of Kontoor Brands from $96.00 to $99.00 and gave the stock an “overweight” rating in a report on Thursday, August 13th. UBS Group increased their target price on Kontoor Brands from $131.00 to $136.00 and gave the company a “buy” rating in a research note on Thursday, August 13th. Finally, BTIG Research reaffirmed a “buy” rating and issued a $105.00 target price on shares of Kontoor Brands in a report on Tuesday, September 15th. Seven equities research analysts have rated the stock with a Buy rating, four have given a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat.com, the company currently has a consensus rating of “Moderate Buy” and an average price target of $96.56.

Insider Buying and Selling

In other Kontoor Brands news, EVP Thomas Doerr, Jr. sold 7,660 shares of the firm’s stock in a transaction that occurred on Thursday, August 13th. The stock was sold at an average price of $83.43, for a total value of $639,073.80. Following the completion of the sale, the executive vice president owned 25,063 shares in the company, valued at approximately $2,091,006.09. This trade represents a 23.41% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, CEO Scott Baxter sold 184,403 shares of Kontoor Brands stock in a transaction that occurred on Thursday, August 13th. The stock was sold at an average price of $83.40, for a total value of $15,379,210.20. Following the sale, the chief executive officer directly owned 261,786 shares in the company, valued at $21,832,952.40. The trade was a 41.33% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. 1.80% of the stock is currently owned by company insiders.

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

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.