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Revenue from continuing operations increased 3 per cent year on year (YoY) to $685 million in the third quarter (Q3) ended October 3, 2026. Reported operating income more than doubled to $77 million, while adjusted operating income rose 6 per cent to $101 million and adjusted operating margin improved 40 basis points (bps) to 14.7 per cent.<\/p>\n
Kontoor Brands raised its FY26 adjusted EPS outlook to $5.40 after Q3 revenue rose 3 per cent to $685 million and adjusted EPS increased 40 per cent to $1.50.
\nAdjusted gross margin expanded 230 basis points to 48.1 per cent, supported by Project Jeanius, pricing and favourable business mix.
\nFollowing the Lee divestiture, the US apparel group expects adjusted EPS of at least $6.60 in 2027.<\/p>\n
Kontoor reported a net loss from continuing operations of $34 million and diluted loss per share of $0.62, reflecting a non-cash tax charge tied to the migration of Helly Hansen intellectual property. Adjusted diluted earnings per share (EPS) rose 40 per cent to $1.50, Kontoor Brands said in its financial release.<\/p>\n
\u201cOur third quarter results were driven by growth in both Wrangler and Helly Hansen, strong earnings and gross margin expansion,\u201d said Scott Baxter, chief executive officer and chairman of the board, Kontoor Brands<\/em><\/strong>.<\/p>\n \u201cKontoor enters its next chapter as a more focused company anchored around two iconic brands with stronger growth profiles that position us well for the future,\u201d added Baxter.<\/p>\n Wrangler global revenue increased 3 per cent to $485 million. US revenue rose 2 per cent, supported by a 7 per cent increase in direct-to-consumer (DTC) sales and a 2 per cent gain in wholesale revenue. International Wrangler revenue grew 6 per cent, as DTC sales rose 25 per cent and wholesale increased 4 per cent.<\/p>\n Helly Hansen global revenue also rose 3 per cent to $191 million. Its sport business generated revenue of $147 million, up 2 per cent, while workwear revenue increased 5 per cent to $44 million. Total US revenue increased 2 per cent to $463 million, while international revenue rose 4 per cent to $222 million.<\/p>\n Reported gross margin expanded 830 bps to 48.3 per cent. Adjusted gross margin increased 230 bps to 48.1 per cent, benefiting from Project Jeanius, favourable business mix and pricing, net of product-cost changes.<\/p>\n Reported selling, general and administrative expenses rose to $254 million, or 37.1 per cent of revenue. Adjusted expenses increased to $229 million, or 33.4 per cent of revenue, reflecting costs previously allocated to Lee as well as higher investments in DTC, demand creation and technology. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) increased to $118 million from $107 million.<\/p>\n Kontoor ended the quarter with $56 million in cash and cash equivalents and $1.1 billion in long-term debt. Inventory declined 6 per cent YoY to $570 million, primarily due to lower Helly Hansen inventory.<\/p>\n The company lifted its FY26 adjusted EPS forecast to $5.40 from its previous range of $5.25-$5.35, representing growth of approximately 31 per cent. Revenue is expected to be about $2.68 billion, up approximately 12 per cent YoY, while adjusted gross margin is forecast at 50.0-50.2 per cent, an improvement of 350-370 bps.<\/p>\n Kontoor expects adjusted operating income of approximately $400 million, up about 12 per cent, capital expenditure of roughly $25 million and cash from operations of around $325 million. It also expects to make voluntary term-loan payments of $280 million in Q4 and reduce its net leverage ratio below 1.5 times by year-end.<\/p>\n Following the completed sale of Lee, which generated $698 million in net proceeds, Kontoor expects to repurchase $450 million of common stock in Q4, including $400 million through an accelerated share repurchase programme. For 2027, it expects adjusted EPS of at least $6.60, representing growth of more than 20 per cent, and cash from operations of at least $325 million.<\/p>\n
<\/p>\n Fibre2Fashion News Desk (MS)<\/p>\n
\n <\/p><\/div>\n\tWrangler and Helly Hansen deliver growth<\/h3>\n
\tMargins strengthen despite higher investment<\/h3>\n
\tFY26 earnings outlook raised, 2027 EPS seen above $6.60<\/h3>\n