NYSE$KTB
Kontoor Brands Inc. · Q2 2023 earnings
Q2 2023 earnings · · Investor relations
Briefing
Delivered second quarter results largely consistent with expectations, with U.S. POS continuing to outpace shipments.
Kontoor Brands reported flat revenue of $616 million for Q2 2023 compared to Q2 2022. The company reaffirmed its 2023 outlook excluding restructuring charges. Strength in DTC and International was tempered by decreases in U.S. wholesale.
- Q2 2023 revenue was $616 million, flat compared to Q2 2022.
- Reported EPS was $0.64, and adjusted EPS was $0.77, including a one-time discrete tax charge of $0.09.
- Gross margin decreased by 290 basis points to 40.6 percent on a reported basis.
- Inventory increased 17 percent over Q2 2022, sequentially improving from a 52 percent year-over-year increase in Q1 2023.
Headline financials
Revenue & EPS history
Kontoor Brands · Revenue · Quarterly
$616M
Revenue by segment
Kontoor Brands · $613M total across 2 segments · Q2 2023
- Wrangler$425M+1.8%69.4%
- Lee$188M-2.6%30.6%
Forward guidance
The Company is reaffirming its prior outlook for FY’23 provided on May 4, 2023 with select updates to quarterly cadence.
Tailwinds
- Revenue is expected to increase at a low-single digit percentage over 2022, consistent with the prior outlook, with second half performance now anticipated to be above first half growth.
- Adjusted gross margin is expected to be in the range of 43.5 percent to 44.0 percent, increasing 40 to 90 basis points compared to gross margin of 43.1 percent in 2022, consistent with prior outlook excluding restructuring charges in Q2’23.
- Adjusted SG&A is expected to increase at a mid-single digit percentage compared to adjusted SG&A in 2022, consistent with prior outlook excluding restructuring charges in Q2’23.
- Adjusted EPS is expected to be in the range of $4.55 to $4.75, consistent with prior outlook excluding $0.13 associated with restructuring charges in Q2’23.
- Capital Expenditures are expected to be in the range of $35 million to $40 million, primarily to support IT projects, growth in owned retail stores, manufacturing and distribution investments.
Headwinds
- During the fourth quarter of 2023, the Company assumes macro consumer demand conditions will be more challenged in the U.S.
- The Company expects year-over-year EPS growth to be most pronounced in Q4’23.
- The Company expects an effective tax rate of 20 percent to 21 percent.
- Interest expense is expected to be in the range of $33 million to $38 million.
- Other Expense is expected to be in the range of $5 million to $10 million.
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 2023
+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
| Quarter | Report date | Reaction (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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