After solid start to quarter, Kontoor Brands updates annual forecasts

The US apparel company Kontoor Brands Inc. kept its revenue largely stable in the first quarter of fiscal year 2025. However, negative special effects weighed on profits.

In addition to the current figures, the parent company of denim brands Wrangler and Lee also presented updated annual forecasts on Tuesday. These now also take into account the financial impact of the planned takeover of outdoor outfitter Helly Hansen. According to the current status, the acquisition should be completed this month.

One-off charges depress profit

In the period from January to March, group revenue amounted to 622.9 million dollars. This was a one percent decrease compared to the same quarter last year and fell short of analysts’ expectations. Adjusted for exchange rate changes, revenues remained practically constant. Wrangler brand sales rose three percent to 420 million dollars, while the Lee label suffered a nine percent decline to 200 million dollars.

Restructuring costs and expenses related to the Helly Hansen takeover caused operating profit to fall by 13 percent to 73.3 million dollars. Adjusted for special effects, however, it rose by four percent to 96.1 million dollars.

The reported net result shrank by 28 percent to 42.9 million dollars. The adjusted earnings per share, adjusted for special effects, reached 1.20 dollars. This grew by three percent compared to the same period last year and exceeded market expectations.

New forecasts also take into account the expected revenue and earnings contributions from Helly Hansen

The company also presented new annual forecasts, which for the first time include the expected revenue and profit contributions from Helly Hansen. According to this, management now expects revenue growth of 17 to 19 percent to 3.06 to 3.09 billion dollars for 2025. Helly Hansen is expected to contribute approximately 425 million dollars to this after the takeover, which is expected to be completed by the end of May.

The target corridor for operating profit, adjusted for special effects, is now between 437 to 445 million dollars, which would mean an increase of 15 to 17 percent compared to the previous year. Adjusted earnings per share, adjusted for special effects, are expected to grow by 10 to 12 percent to 5.40 to 5.50 dollars.