Kontoor Brands Inc
Q2 2026 Earnings
Market Reaction
Did KTB Beat Earnings? Q2 2026 Results
Kontoor Brands delivered a mixed but ultimately encouraging second quarter, posting adjusted EPS of $1.06 from continuing operations, beating the $1.04 consensus by 2.09% and extending its streak of consensus EPS beats to five consecutive quarters, even as revenue of $584.29 million came in fractionally below the $586.95 million estimate and fell 11.2% year over year. The headline revenue decline reflected the company's ongoing portfolio reshaping around Wrangler and its newly acquired Helly Hansen business, which contributed $114.00 million to the quarter and proved a key earnings driver, with adjusted gross margin expanding 710 basis points to 53.8% on Project Jeanius benefits, favorable channel mix, and Helly Hansen's accretive profile. With the planned Lee divestiture expected to close in Q4, investor attention is squarely on Kontoor's core brands and capital return strategy, including a $400.00 million accelerated share repurchase upon closing. Management raised its full-year adjusted EPS outlook to $5.25-$5.35, while maintaining revenue guidance of $2.66-$2.71 billion and substantially lifting adjusted gross margin guidance to 49.8%-50.0%.
- Helly Hansen acquisition contributing $114 million of revenue, exceeding expectations
- Wrangler revenue growth of 2% driven by 9% increase in U.S. direct-to-consumer and 10% international growth
- Adjusted gross margin expansion of 710 basis points driven by Project Jeanius, Helly Hansen acquisition, and favorable channel/product mix and pricing
- Wrangler female, direct-to-consumer, and international categories led diversified growth
- Helly Hansen profitability improvement fueled by multi-brand platform benefits
“Our second quarter results were driven by growth from Wrangler, a stronger-than-expected contribution from Helly Hansen and robust gross margin expansion. Wrangler delivered another quarter of diversified growth led by strong performance in female, direct-to-consumer and international, coupled with exceptional profitability and cash generation. Helly Hansen delivered a better-than-expected quarter and for the first half of 2026, delivered double-digit revenue growth on a pro-forma basis and significant profitability improvement fueled in part by the benefits of our multi-brand platform.”
Kontoor Brands CEO, on the earnings call
Forward Guidance & Outlook
Kontoor raised its full-year 2026 adjusted EPS outlook to $5.25–$5.35 from $5.15–$5.25, representing 27–29% growth. Revenue guidance is maintained at $2.66–$2.71 billion, representing 12–13% growth. Adjusted gross margin guidance raised significantly to 49.8%–50.0% from 48.3%–48.5%, reflecting 330–350 bps improvement. Adjusted operating income expected at $413–$420 million, including $25 million of incremental brand-building investments. Second-half revenue expected to increase mid-single digits for both Wrangler and Helly Hansen excluding 53rd week impact. Capital expenditures approximately $30 million. Effective tax rate approximately 20%. Interest expense approximately $56 million. Average shares outstanding approximately 55.5 million, excluding future repurchases. Total cash from operations approximately $450 million. Voluntary term loan payments of $225 million expected. Net leverage ratio targeted below 1.5x by year-end. Lee divestiture on track for Q4 closing, expected to be immaterial to EPS over 12–18 months. Upon closing, company intends $400 million Accelerated Share Repurchase with remaining proceeds for voluntary debt payments. Outlook assumes 15% reciprocal tariff rate for H2 2026.
KTB YoY Financials
KTB Revenue by Segment
KTB Revenue by Geography
Figures from SEC filings and company reports. Not investment advice.