Kontoor Brands Inc. has reported robust financial results for the third quarter, with total revenue reaching $655 million, marking an impressive 8% increase. This growth was primarily fueled by the strong performance in the U.S. wholesale and Direct-to-Consumer (DTC) segments, effectively compensating for a decline in revenues from China.
The company, renowned for its ownership of Lee and Wrangler jeans, reported that third-quarter revenue in the U.S. surged to $506 million, representing a substantial 12% increase. The U.S. wholesale segment played a pivotal role in this success, registering a noteworthy 12% growth, driven by strength across various categories, distribution channels, and a notable increase in market share.
The positive momentum in U.S. wholesale was complemented by the continued strength in DTC. Kontoor Brands’ U.S. online revenue experienced an impressive 11% increase.
On the international front, the company generated $149 million in revenue, despite a slight 4% decrease. While DTC exhibited strength on the global stage, the decline in wholesale, particularly in China, resulted in a 23% decrease in revenue from the Chinese market. In contrast, the European market saw a 4% increase during the third quarter, ending in September.
Breaking down the results by brand, global revenue for the Wrangler brand reached $445 million, marking a substantial 9% increase. Similarly, the Lee brand achieved a 5% increase, with global revenue totaling $208 million.
Scott Baxter, President, Chief Executive Officer, and Chair of Kontoor Brands, expressed his satisfaction with the performance, stating, «In the third quarter, we delivered strong revenue growth and profitability that exceeded our expectations, excluding the duty charge. This reflects the broad-based strength of our business. Supported by strategic investments in our brands, we continued to experience robust growth in core U.S. wholesale, further solidifying our market share. Additionally, our DTC segment continued to excel, aligning with our growth strategy.»
Looking ahead, Kontoor Brands has adjusted its full-year revenue outlook, now expecting an approximate 1% increase, compared to the previous projection of a low-single-digit percentage increase. This demonstrates the company’s commitment to adapt and thrive in the evolving market landscape, offering a promising outlook for the future.
