Kontoor Brands’ earnings increased due to continued sales growth, particularly in the US

Kontoor Brands announced Thursday a 2 percent increase in revenue to $670 million, driven by growth in global direct-to-consumer and U.S. wholesale, offset by a decline in international wholesale revenue.

The U.S. denim supplier said Wrangler revenue rose 4 percent to $464 million, with Wrangler US up 5 percent, driven by a 10 percent increase in direct-to-consumer and a 5 percent increase in wholesale. Wrangler’s international revenue fell 3 percent, driven by a decline in wholesale partially balanced by growth in direct-to-consumer.

Lee Brands, meanwhile, had revenue of $202 million, down 3 percent from last year. Lee US revenue increased 1 percent due to growth in the wholesale channel offset by a decline in direct-to-consumer. Lee International revenue declined 7 percent due to declines in wholesale and brick-and-mortar retail, partially offset by growth in digital.

For the quarter ended Sept. 30, the Greensboro, North Carolina-based company’s net income rose 19 percent to $70.5 million.

“Our third quarter results exceeded expectations driven by strong execution and business fundamentals,” said Scott Baxter, Chairman, Chief Executive Officer and President of Contour Brands.

“Investment in our brands continues to drive market share growth, expanded distribution, category growth and new innovation platforms. Driven by our genius transformation programme, there is growing momentum for the business, supported by increased investment potential and capital allocation optionality that positions us to deliver strong returns for stakeholders in the years to come.

Looking ahead, the company lifted its guidance for the full year. Annual revenues are now expected to be $2.60 billion, up from $2.57 to $2.63 billion in the previous outlook.

“We are raising our full-year outlook due to better-than-expected third quarter results, strong profitability and cash generation,” Baxter said.

“Our business is positioned to strengthen in the fourth quarter, as demonstrated by accelerating revenue growth, gross margin expansion, strong operating income growth and further inventory reductions. We will continue to manage the business conservatively in light of the uncertain environment, but remain confident in our ability to deliver strong returns for the remainder of the year and into 2025.