NYSE$KTB
Kontoor Brands Inc. · Q3 2020 earnings
Q3 2020 earnings · · Investor relations
Briefing
Reported strong results driven by strategic actions, enhancing the operating model for sustainable long-term growth.
Kontoor Brands reported a 9% decrease in revenue to $583 million for Q3 2020, but adjusted EPS increased by 40% compared to the prior year. Strong cash generation supported additional debt repayments and the reinstatement of a quarterly dividend.
- Q3 reported revenue declined 9% year-over-year to $583 million.
- Q3 reported EPS was $1.05; adjusted EPS increased 40% year-over-year to $1.33.
- Q3 reported gross margin increased 410 bps to 44.2%; adjusted gross margin increased 240 bps to 43.3%.
- Strong cash generation supported $100 million in discretionary debt repayments.
Headline financials
Revenue & EPS history
Kontoor Brands · Revenue · Quarterly
$583M
Revenue by segment
Kontoor Brands · $561M total across 2 segments · Q3 2020
- Wrangler$347M-5.5%61.9%
- Lee$214M-7.8%38.1%
Forward guidance
The company expects continued sequential improvement in Q4 2020 revenue compared to Q3 2020, with revenue anticipated to be flat to down modestly. Full-year 2020 Adjusted EPS is anticipated to be in the range of $2.25 to $2.35.
Tailwinds
- The Company continues to take the necessary, proactive steps to accommodate a prolonged COVID-19 operating environment.
- Revenue in the fourth quarter of 2020 is expected to show continued sequential improvement from third quarter 2020 results, with revenue anticipated to be flat to down modestly.
- Adjusted gross margin in the fourth quarter of 2020 is anticipated to be above the 40.9 percent achieved in the prior year, reflecting continued benefits from ongoing restructuring and quality-of-sales initiatives, as well as higher anticipated growth in more accretive channels such as Digital and improving mix within international.
- Full-year 2020 Adjusted EPS is anticipated to be in the range of $2.25 to $2.35.
- Strong cash generation is expected to support continued aggressive debt paydown, which is anticipated to be at least $100 million during the fourth quarter.
Headwinds
- Impacts from the COVID-19 pandemic and macroeconomic factors remain uncertain.
- Revenue in the fourth quarter of 2020 is expected to show continued sequential improvement from third quarter 2020 results, with revenue anticipated to be flat to down modestly.
- Fourth quarter adjusted SG&A is expected to increase year-over-year, driven by strategic decisions to amplify investments in demand creation and DTC in support of both the fourth quarter and long-term revenue.
- The Company continues to take the necessary, proactive steps to accommodate a prolonged COVID-19 operating environment.
- Impacts from the COVID-19 pandemic and macroeconomic factors remain uncertain.
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 Q3 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
| 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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