NYSE$KTB

Kontoor Brands Inc. · Q2 2022 earnings

Q2 2022 earnings · · Investor relations

Briefing

Kontoor Brands reported strong revenue and adjusted earnings growth, driven by strength in the U.S. market, despite macroeconomic challenges.

Kontoor Brands reported a 25% increase in revenue and a GAAP EPS of $1.09 for Q2 2022. The company is updating its full-year outlook to reflect retailer inventory rebalancing, the ongoing COVID-19 pandemic, and inflationary pressures.

  • Q2 2022 revenue increased 25 percent on a reported basis and 27 percent in constant currency compared to Q2 2021.
  • Q2 2022 GAAP EPS was $1.09 compared to Q2 2021 GAAP EPS of $0.40.
  • U.S. revenue increased 40 percent over last year, driven by strength in both the Wrangler and Lee brands.
  • The company repurchased $40 million in common stock during the second quarter.

Headline financials

Total Revenue

$614M

Previous: $491M+25.0%
EPS (adj)

$1.09

Previous: $0.70+55.7%
Capital Expenditures

-$7M

Previous: -$3.32M-110.7%
Free Cash Flow

$55M

Previous: $20.3M+170.7%
Net Income

$62M

Previous: $23.6M+162.3%
Operating Income

$88.7M

Previous: $35.2M+152.3%
Gross Profit

$267M

Previous: $226M+18.1%
Cash & Equivalents

$145M

Previous: $176M-17.3%
Total Assets

$1.54B

Previous: $1.52B+1.7%
Stock-Based Comp

$6.74M

No prior period

Revenue & EPS history

Kontoor Brands · Revenue · Quarterly

$614M

Q2 2022+25%vs Q2 2021
Beat estimate in 10 of 15 quarters(67%)
ActualEstimate

Revenue by segment

Kontoor Brands · $611M total across 2 segments · Q2 2022

  • Wrangler
    $418M+34.3%
  • Lee
    $193M+9.7%

Forward guidance

The Company is taking a more conservative approach to its assumptions for the balance of the year and updating its 2022 outlook.

Tailwinds

  • Benefits from continued structural mix shifts to accretive channels such as Digital.
  • Ongoing cost saving initiatives.
  • Strategic pricing are anticipated to help offset these higher costs.
  • Tighter expense control on non-strategic and discretionary items.
  • Investments will continue to be made in the Company’s brands and capabilities, including demand creation, Digital, and International expansion.

Headwinds

  • Impacts from retailer inventory rebalancing.
  • Ongoing COVID-19 pandemic.
  • Inflation
  • Other macroeconomic factors.
  • Higher incremental inflationary pressures on input costs and adverse mix due to COVID lockdowns in China to weigh on gross margin.

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 Q2 2022

Historical avgQ2 2022

+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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