NYSE$KTB

Kontoor Brands Inc. · Q1 2020 earnings

Q1 2020 earnings · · Investor relations

Briefing

Kontoor Brands' Q1 2020 earnings were significantly impacted by COVID-19, with revenue declining by 22 percent, but digital sales increased 10 percent.

Kontoor Brands reported a 22% decrease in revenue to $504 million due to COVID-19 impacts, with a GAAP EPS of $(0.05) and adjusted EPS of $0.27. The company took actions to strengthen financial flexibility, including amending its credit facility and temporarily suspending dividends.

  • COVID-19 had a significant impact on Q1 2020 revenue and profit.
  • Q1 2020 reported revenue was $504 million.
  • Q1 2020 GAAP EPS was $(0.05), with adjusted EPS at $0.27.
  • Digital sales increased 10 percent, including a 41 percent increase in U.S. digital wholesale, despite wholesale revenue decline due to customer door closures.

Headline financials

Total Revenue

$504M

Previous: $648M-22.2%
EPS (adj)

$0.27

Previous: $0.27+0.0%
Capital Expenditures

-$10.4M

Previous: -$5.3M-96.7%
Free Cash Flow

-$13.1M

Previous: $10.1M-229.9%
Net Income

-$2.71M

Previous: $15.4M-117.6%
Operating Income

-$164K

Previous: $25.2M-100.7%
Gross Profit

$191M

Previous: $247M-22.9%
Cash & Equivalents

$479M

Previous: $103M+365.7%
Total Assets

$1.9B

Previous: $2.39B-20.3%
Stock-Based Comp

$2.47M

Previous: $7.69M-67.9%

Revenue & EPS history

Kontoor Brands · Revenue · Quarterly

$504M

Q1 2020-22.2%vs Q1 2019
Beat estimate in 9 of 10 quarters(90%)
ActualEstimate

Revenue by segment

Kontoor Brands · $486M total across 2 segments · Q1 2020

  • Wrangler
    $303M-18.1%
  • Lee
    $183M-24.2%

Forward guidance

Kontoor Brands withdrew its 2020 guidance due to the uncertainty and significant business impacts caused by COVID-19 but provided additional perspective and assumptions.

Tailwinds

  • Key retail partners remain well positioned to navigate this environment.
  • New programs and distribution gains are expected for the second half of 2020.
  • Iconic brands offer consumers a distinct value proposition.
  • Cost savings efforts are in place.
  • Scaled, agile supply chain positions Kontoor well in the marketplace.

Headwinds

  • Uncertainty of COVID-19 remains.
  • Negative impacts on revenue, operating income, and EPS are anticipated to be most pronounced in the second quarter of 2020.
  • Prolonged economic downturn is predicted.
  • Company is not guiding on the impact of COVID-19 in the second half of 2020.
  • The company continues to take the necessary, proactive steps to accommodate a prolonged COVID-19 environment.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 19 quarterly earnings reports · overlaid with Q1 2020

Historical avgQ1 2020

+1.3%

Avg return

Earnings day

+1.4%

Avg return

5 days after

+4.6%

Avg return

30 days after

58%

19 / 33 earnings

Positive

+18.6%

Q4 2025

Best reaction

-17.3%

Q4 2017

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-2.4%-1.9%+21.2%
Q4 2025+18.6%+17.7%+6.5%
Q3 2025-9.4%-10.8%-3.3%
Q2 2025+12.4%+24.0%+41.5%
Q1 2025+1.5%+8.0%+7.3%
Q4 2024-13.5%+0.5%-25.7%
Q3 2024+6.6%+10.7%+19.9%
Q2 2024-1.5%-2.2%+6.7%
Q1 2024+5.6%+9.0%+18.0%
Q4 2023-6.8%-7.8%-5.0%
Q3 2023+6.3%+9.7%+19.2%
Q2 2023+16.6%+16.3%+13.7%
Q1 2023-7.9%-9.8%-9.4%
Q4 2022+18.5%+21.7%+9.1%
Q3 2022+10.8%+9.6%+30.7%
Q2 2022+2.1%-1.0%-3.0%
Q1 2022+2.9%+0.0%-2.2%
Q4 2021-3.0%-12.7%-16.5%
Q3 2021+1.5%+5.4%-5.2%
Q2 2021-0.7%-2.0%-6.4%
Q1 2021+0.9%-0.7%-1.3%
Q3 2020+5.3%+14.4%+38.2%
Q2 2020-2.1%+4.0%+13.7%
Q1 2020-8.1%-20.8%+16.2%
Q4 2017-17.3%-18.0%-37.1%
Q4 2019-3.3%-6.6%-60.1%
Q3 2018+1.0%-0.3%+8.5%
Q3 2019-5.8%-5.7%+0.6%
Q2 2018-4.7%+0.8%+11.6%
Q2 2019+16.0%+9.1%+21.5%
Q1 2019+0.5%-4.6%+7.7%
Q4 2018+0.5%-4.6%+7.7%
Q1 2018+0.5%-4.6%+7.7%

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