Dive Brief:
- Kontoor Brands reported revenue of $670 million in the third quarter, a 2% year-over-year increase, according to a press release Thursday.
- The company attributed the increase to growth in its global DTC and U.S. wholesale businesses. In the U.S., revenue was up 5% year over year to $530 million, while international revenue dropped 5% to $141 million.
- Q3 was the first time Kontoor’s revenue has grown this fiscal year, and the company said it expects to see growth in Q4 as well. The company projected revenue of $695 million, which would mark a 4% growth rate, per the release.
Dive Insight:
For the quarter, the Wrangler brand grew 4%, with increases in both U.S. wholesale and DTC. However, the brand’s international revenue fell 3%. Lee reported a revenue decrease of 3%, with revenue growing 1% in the U.S. but dropping 7% internationally.
Kontoor has been working to improve its profit and savings through an initiative called Project Jeanius. Last quarter, the company said it expected to generate $100 million in profit improvement and savings through the initiative, which includes optimizing its supply chain and reducing its operating capacity.
Although revenue declined at the beginning of the year, CEO Scott Baxter said that each quarter's results were stronger than expected.
“The investments in our brands continue to drive market share gains, expanded distribution, category growth and new innovation platforms,” Baxter said in the Q3 release. “Fueled by our Jeanius transformation program, momentum for the business is building, supported by increased investment capacity and capital allocation optionality that position us to deliver strong returns for stakeholders in the years ahead.”
Kontoor updated its full-year outlook for 2024. The company now expects revenue to be $2.6 billion, compared to a previous range of $2.57 billion to $2.63 billion.
Kontoor additionally said it expects to gain market share and achieve channel and category expansion growth for the year. It also said it expects expanded distribution to be “offset by conservative retailer inventory management and macroeconomic pressures on consumer spending around the globe.”
Part of Project Jeanius included naming a chief operating officer. In March, Kontoor appointed Tom Waldron to the position, overseeing Wrangler, Lee and the company’s supply chain. The company used to have separate COOs for the Wrangler and Lee brands.
Collaborations have been a key part of both the Wrangler and Lee brands’ strategy this year. Wrangler has collaborated with Pacsun, Staud and Hot Wheels, while Lee has collaborated with Heydude and Paul Smith.
