Core Points - Kontoor Brands, Inc. has declared a quarterly cash dividend of $0.53 per share, marking a 2 percent increase from the previous dividend amount [1] - The dividend will be payable on December 18, 2025, to shareholders of record as of December 8, 2025 [1] Company Overview - Kontoor Brands, Inc. is a portfolio that includes iconic lifestyle, outdoor, and workwear brands such as Wrangler®, Lee®, and Helly Hansen® [2] - The company focuses on leveraging its global platform, strategic sourcing model, and supply chain to drive brand growth and deliver long-term value [2] - Kontoor Brands is headquartered in Greensboro, NC, and employs approximately 17,000 people [3][8] Leadership Changes - Jenni Broyles and Joseph Alkire have assumed expanded roles on Kontoor's Executive Leadership Team, reflecting their proven performance and strategic leadership [7]

Group 1 - Baird analyst Jonathan Komp initiated coverage on Kontoor Brands Inc (NYSE:KTB) with an Outperform rating and a price target of $105, while shares closed at $86.27 [3] - Leerink Partners analyst Roanna Ruiz initiated coverage on Ibio Inc (NASDAQ:IBIO) with an Outperform rating and a price target of $2, with shares closing at $0.85 [3] - Morgan Stanley analyst Erin Wright initiated coverage on Option Care Health Inc (NASDAQ:OPCH) with an Overweight rating and a price target of $35, while shares closed at $27.10 [3] - Wells Fargo analyst Anthony Trainor initiated coverage on Cracker Barrel Old Country Store Inc (NASDAQ:CBRL) with an Equal-Weight rating and a price target of $42, with shares closing at $40.29 [3]

Core Points - Kontoor Brands, Inc. (NYSE: KTB) plans to release its third quarter 2025 financial results on November 3, 2025, at approximately 6:50 a.m. ET [1] - Following the results announcement, Kontoor management will host a conference call at approximately 8:30 a.m. ET to review the results [1] - The conference call will be broadcast live and accessible on the company's investor relations website, with an archived version available for those unable to listen live [1]

Core Concept - The collaboration between Wrangler and Coors Banquet introduces the Wrangler x Coors Banquet Collection, celebrating the spirit of the West through a unique co-collection of apparel and accessories [1][2]. Product Details - The collection features over twenty unique pieces, including denim vests with Coors-branded embroidery, pullover sweaters, classic Wrangler 13MWZ Cowboy Cut Jeans with limited-edition copper hardware, and graphic t-shirts [3]. - The collection will be available starting August 21, 2025, through Wrangler stores, select western retailers, and online platforms [6]. Marketing and Promotion - The collaboration includes a national advertising campaign featuring hand-painted posters created by artist Caitlin Hatch, using a custom watercolor blend made with Coors Banquet beer [4]. - Wrangler and Coors Banquet will host a series of pop-up events called the Legends of the West Tour in cities like Dallas, Nashville, and Denver, allowing fans to experience the collection firsthand [5]. Brand Legacy - Wrangler has a 75-year legacy in authentic American style, rooted in the Western lifestyle, and is committed to superior quality and timeless design [7]. - Molson Coors Beverage Company has a long history of brewing beverages that unite people, with a diverse portfolio that includes iconic beer brands and modern flavored beverages [8][9].

Company Overview - Kontoor Brands (NYSE: KTB) has experienced significant changes since the last analysis in August 2024, with a total return of 6.5% compared to 20% for the market [1] Investment Perspective - The investment approach focuses on long-only strategies, evaluating companies from an operational and buy-and-hold perspective, rather than market-driven dynamics [2] - The articles emphasize understanding the long-term earnings potential of companies and the competitive dynamics within their industries [2] Market Sentiment - The current market sentiment is relatively bullish, but the articles aim to provide a healthy dose of skepticism, indicating that only a small fraction of companies should be considered a buy at any given time [2]

Financial Data and Key Metrics Changes - Global revenue increased by 8%, with a 4% contribution from Helly Hansen [22] - Adjusted earnings per share (EPS) was $1.21, a 23% increase compared to the prior year, while adjusted EPS excluding Helly Hansen was $1.33, a 36% increase [28][29] - Adjusted gross margin expanded by 120 basis points to 46.4% due to Project Genius benefits and lower input costs [27] Business Line Data and Key Metrics Changes - Wrangler's global revenue increased by 7%, with a 9% increase in the U.S. driven by 16% growth in direct-to-consumer (DTC) and 8% growth in wholesale [23] - Lee's global revenue decreased by 6%, with a 5% decline in the U.S. driven by wholesale declines, partially offset by 9% growth in digital [24][25] - Helly Hansen's global revenue in June was $29 million, exceeding expectations of $20 million to $25 million [26] Market Data and Key Metrics Changes - Wrangler's international revenue decreased by 6%, driven by a 6% decrease in wholesale [23] - Lee's international revenue also decreased by 6%, with declines in wholesale offsetting low single-digit growth in DTC [25] - The U.S. market showed strong performance with mid-single-digit growth in POS trends in the second quarter [23] Company Strategy and Development Direction - The company is focused on accelerating growth through geographic, category, and channel expansion, particularly with Helly Hansen [39] - The value creation framework is built on four pillars: accelerate growth, double Helly's operating margins, increase capital allocation optionality, and establish Kontoor as the employer of choice [12] - The company plans to hold an Investor Day in 2026 to share strategic vision and financial model improvements [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the 2025 plan, citing significant momentum in Wrangler and a positive outlook for Lee and Helly Hansen [20][41] - The operating environment remains uncertain, but the company is executing at a high level and sees opportunities for shareholder value creation [21][42] - The company anticipates a full-year revenue range of $3.09 billion to $3.12 billion, representing growth of 19% to 20% [35] Other Important Information - Inventory increased by 40% to $686 million, with a focus on improving working capital and inventory turnover [30] - The company declared a regular quarterly cash dividend of $0.52 per share [33] - The company is managing tariff impacts through production transfers and pricing strategies, with an estimated $15 million impact on operating profit in 2025 [34][75] Q&A Session Summary Question: What is the EBIT contribution from Helly Hansen this fiscal year? - The EBIT contribution is expected to be around $50 million, with a revenue run rate of approximately $680 million [44] Question: Can you elaborate on the cadence for the second half revenue growth? - The revenue outlook for the third quarter is approximately $855 million, with a significant contribution from Helly Hansen expected in the fourth quarter [56] Question: What actions are being taken in APAC for Lee's distribution? - The company is working to strengthen its retail partnerships and improve inventory positions in China, with a focus on sustainable growth [60][62] Question: What is the expected impact of tariffs on the business? - The anticipated net impact to operating profit in 2025 is approximately $15 million, with ongoing efforts to mitigate this through pricing and production adjustments [34][74] Question: How is the company planning to invest in marketing for Helly Hansen? - Significant marketing investments are planned for both Wrangler and Helly Hansen, with a focus on digital and direct-to-consumer strategies [95][100]

Financial Data and Key Metrics Changes - Global revenue increased by 8%, with a 4% contribution from Helly Hansen [20][21] - Adjusted earnings per share (EPS) was $1.21, a 23% increase compared to the prior year [26] - Adjusted gross margin expanded by 120 basis points to 46.4% [25] Business Line Data and Key Metrics Changes - Wrangler's global revenue increased by 7%, with a 9% increase in the U.S. driven by 16% growth in direct-to-consumer (DTC) [21][12] - Lee's global revenue decreased by 6%, with a 5% decline in U.S. wholesale partially offset by 9% growth in digital [22][23] - Helly Hansen's revenue for June was $29 million, exceeding expectations [24] Market Data and Key Metrics Changes - Wrangler's international revenue decreased by 6%, driven by a 6% decrease in wholesale [21] - Lee's international revenue also decreased by 6%, with low single-digit growth in DTC [23] - The U.S. market showed strong performance, particularly in the digital segment [15][21] Company Strategy and Development Direction - The company is focused on accelerating growth through geographic, category, and channel expansion, particularly for Helly Hansen [37][38] - The value creation framework is built on four pillars: accelerate growth, double operating margins, increase capital allocation optionality, and establish Kontoor as an employer of choice [11] - The company plans to hold an Investor Day in 2026 to share strategic vision and financial model improvements [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the 2025 objectives, citing strong momentum entering the second half of the year [39][40] - The operating environment remains uncertain, but the company is executing at a high level with meaningful opportunities to create shareholder value [19][39] - Tariff impacts are expected to be mitigated over a 12 to 18-month period, with proactive measures in place [32][65] Other Important Information - Inventory increased by 40% to $686 million, with a focus on improving working capital and inventory turnover [27] - The company declared a regular quarterly cash dividend of $0.52 per share [31] - A voluntary debt repayment of $25 million was made during the quarter [29] Q&A Session Summary Question: What is the EBIT contribution from Helly Hansen this fiscal year? - The expected EBIT contribution is around $50 million, with a revenue run rate of approximately $680 million [42][43] Question: Can you elaborate on the cadence for second half revenue growth? - The revenue outlook for Q3 is approximately $855 million, with growth driven by a 53rd week and Helly Hansen's contribution [51][53] Question: What are the initiatives to mitigate tariff impacts? - The company is implementing pricing increases, transferring production within the global supply chain, and enhancing supplier partnerships [62][65] Question: What is the Helly Hansen revenue contribution for Q3? - The expected revenue contribution from Helly Hansen for Q3 is around $175 million [106] Question: How is the Wrangler business performing in terms of inventory management? - Wrangler's business is thriving, with strong demand and effective inventory management strategies in place [73][75]

Revenue Performance - Revenue for Q2 2025 was $658 million, an increase of 8% compared to the prior year, with a 4% increase excluding Helly Hansen's contribution[5] - The full year 2025 revenue outlook is now between $3.09 billion and $3.12 billion, reflecting a growth of approximately 19% to 20%[18] - The company anticipates third quarter revenue of approximately $855 million, representing an increase of about 28% compared to the prior year[19] - Net revenues for Q2 2025 were $658,259,000, an increase of 8% compared to $606,898,000 in Q2 2024[35] - Total revenues for the three months ended June 2025 were $658,259,000, representing an 8% increase compared to $606,898,000 in the same period of 2024[55] Profitability Metrics - Adjusted gross margin for Q2 2025 was 46.4%, up 120 basis points year-over-year, benefiting from the Helly Hansen acquisition[5] - Adjusted operating income for Q2 2025 was $100 million, a 25% increase compared to the prior year, with a 32% increase when excluding Helly Hansen[5] - Adjusted EPS for Q2 2025 was $1.21, representing a 23% increase year-over-year, and $1.33 when excluding Helly Hansen, a 36% increase[5] - Adjusted gross margin for the full year 2025 is expected to be approximately 46.1%, an increase of 100 basis points compared to the prior year[19] - Adjusted operating income for the full year 2025 is projected to be around $443 million, a 16% increase compared to the prior year[21] - EBITDA for Q2 2025 was reported at $118,753,000, compared to $82,247,000 in Q2 2024[48] Segment Performance - Wrangler segment revenues grew by 7% to $461,279,000, while Lee segment revenues decreased by 6% to $165,627,000 in Q2 2025[42] - Segment profit for Wrangler increased by 22% to $108,091,000, while Lee reported a profit decrease of 7% to $12,417,000 in Q2 2025[42] - Total reportable segment revenues for the first half of 2025 were $1,273,724,000, reflecting a 3% increase from $1,233,481,000 in the same period of 2024[42] - Direct-to-consumer revenues for the three months ended June 2025 were $87,130,000, reflecting a growth from $72,791,000 in the same period of 2024[55] Cash Flow and Assets - Cash flow from operations is now expected to exceed $375 million, an increase from the previous outlook of exceeding $350 million[22] - Cash provided by operating activities for the first half of 2025 was $103,308,000, down from $152,671,000 in the first half of 2024[40] - Total assets as of June 2025 were $2,717,905,000, up from $1,612,439,000 in June 2024[38] - Cash and cash equivalents decreased to $107,482,000 in June 2025 from $334,066,000 in December 2024[38] - Total invested capital as of June 2025 was $1,919,075,000, significantly higher than $951,134,000 in June 2024[58] Expenses and Debt - The company reported a 15% increase in selling, general and administrative expenses for Q2 2025, totaling $226,300,000 compared to $196,117,000 in Q2 2024[35] - Interest expense rose by 30% to $13,485,000 in Q2 2025 from $10,382,000 in Q2 2024[35] - Long-term debt increased to $1,366,510,000 in June 2025 from $740,315,000 in December 2024[38] - Corporate and other expenses decreased by 78% to $6,360,000 in Q2 2025 compared to $28,378,000 in Q2 2024[42] Other Financial Metrics - The company experienced a significant increase in other income, reporting $29,761,000 in Q2 2025 compared to a loss of $3,021,000 in Q2 2024, marking an increase of 1085%[35] - Adjusted return on invested capital (ROIC) for the trailing twelve months ended June 2025 was 22.0%, down from 27.6% in the previous year[58] - The effective income tax rate adjusted for acquisition and integration-related costs was 20% for the trailing twelve months ended June 2025[58] - The contribution from Helly Hansen for June 2025 was $29,232,000, with organic net revenues at $629,027,000[48] - Restructuring and transformation costs for the three months ended June 2025 totaled $45.4 million, with a tax impact of $1.6 million[61] - Acquisition and integration-related benefits included $33.0 million from foreign currency exchange contracts related to the Helly Hansen acquisition[62] - The company reported a net income of $251,277,000 for the trailing twelve months ended June 2025, compared to $239,578,000 in 2024[58]

Core Insights - Kontoor Brands (NYSE: KTB) is an under-the-radar company that lacks media attention and participation in recent market rallies [1] Company Analysis - The company is characterized by strong fundamentals and sustainable competitive advantages, making it a potential long-term investment opportunity [1] - The investment approach emphasizes patience, focusing on acquiring great businesses without overpaying [1]

Core Viewpoint - Kontoor Brands (KTB) is anticipated to report a year-over-year decline in earnings despite an increase in revenues for the quarter ended June 2025, with the actual results being a significant factor influencing its near-term stock price [1][2]. Earnings Expectations - The upcoming earnings report is expected to be released on August 7, with a consensus EPS estimate of $0.86, reflecting a year-over-year decrease of 12.2%. Revenues are projected to be $627.5 million, which is a 3.4% increase from the previous year [3][2]. Estimate Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, indicating that analysts have not significantly altered their initial estimates during this period [4]. Earnings Surprise Prediction - The Zacks Earnings ESP (Expected Surprise Prediction) model compares the Most Accurate Estimate to the Zacks Consensus Estimate, suggesting that recent analyst revisions may provide more accurate predictions for earnings [8][7]. Earnings ESP and Zacks Rank - For Kontoor, the Most Accurate Estimate aligns with the Zacks Consensus Estimate, resulting in an Earnings ESP of 0%. The stock currently holds a Zacks Rank of 4, making it challenging to predict an earnings beat [12]. Historical Performance - In the last reported quarter, Kontoor exceeded the expected earnings of $1.16 per share by delivering $1.20, resulting in a surprise of +3.45%. The company has beaten consensus EPS estimates in the last four quarters [13][14]. Market Reaction Factors - An earnings beat or miss may not solely dictate stock price movements, as other factors can influence investor sentiment. Stocks may decline despite an earnings beat or rise despite a miss due to unforeseen catalysts [15]. Investment Considerations - While Kontoor does not appear to be a strong candidate for an earnings beat, investors should consider additional factors before making investment decisions related to this stock ahead of its earnings release [17].