NYSE$KTB
Kontoor Brands Inc. · Q3 2023 earnings
Q3 2023 earnings · · Investor relations
Briefing
Kontoor Brands reported strong revenue growth and profitability, driven by U.S. wholesale and DTC strength, but gross margin was impacted by duty expense and inventory management actions.
Kontoor Brands reported an 8% increase in revenue to $655 million for Q3 2023. EPS was $1.05, including a $0.17 charge from duty expense. Excluding the duty charge, EPS was $1.22, a 10% increase compared to the prior year. The company is updating its full year outlook to reflect these results and anticipated challenges.
- Q3 2023 revenue increased 8% (7% in constant currency) compared to Q3 2022.
- Q3 2023 EPS was $1.05, including an unanticipated $0.17 charge from duty expense related to prior periods.
- Inventory decreased 11% compared to Q3 2022.
- FY 2023 revenue is now expected to increase approximately 1% compared to FY 2022.
Headline financials
Revenue & EPS history
Kontoor Brands · Revenue · Quarterly
$655M
Revenue by segment
Kontoor Brands · $653M total across 2 segments · Q3 2023
- Wrangler$445M+9.5%68.1%
- Lee$208M+5.1%31.9%
Forward guidance
Kontoor Brands is updating its 2023 outlook, expecting revenue to increase approximately 1% compared to 2022. Adjusted gross margin is expected to approximate 42.5%, and adjusted EPS is expected to approximate $4.35.
Tailwinds
- Ongoing market share gains
- Strength from DTC
- Approximately 300 basis points of gross margin expansion in Q4 2023
- Geographic and DTC mix as well as lower input costs to drive significant gross margin expansion in 2024
- Accelerated earnings growth and continued normalization of inventory to result in increased cash generation in 2024
Headwinds
- Challenging macroeconomic and consumer demand conditions in the U.S.
- China market more fully reopening.
- Adjusted gross margin is expected to approximate 42.5 percent compared to the prior outlook of 43.5 percent to 44.0 percent.
- Adjusted SG&A is now expected to increase at a low-single digit percentage compared to adjusted SG&A in 2022, which compares to a mid-single digit increase in the prior outlook.
- Adjusted EPS is now expected to approximate $4.35, including an unanticipated $0.15 charge for duty expense related to prior periods.
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 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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