Kontoor(KTB)

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Kontoor(KTB) - 2023 Q3 - Quarterly Report
2023-11-08 21:04
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission file number: 001-38854 KONTOOR BRANDS, INC. (Exact name of registrant as specified in its charter) North Carolina 83-2680248 (State o ...
Kontoor(KTB) - 2023 Q3 - Earnings Call Transcript
2023-11-02 18:51
Kontoor Brands, Inc. (NYSE:KTB) Q3 2023 Earnings Conference Call November 2, 2023 8:30 AM ET Company Participants Eric Tracy - VP, Corporate Finance and IR Scott Baxter - President, CEO and Chair Joe Alkire - CFO Conference Call Participants Mauricio Serna - UBS Bob Drbul - Guggenheim Brooke Roach - Goldman Sachs Will Gaertner - Wells Fargo Peter McGoldrick - Stifel Paul Kearney - Barclays Operator Greetings and welcome to the Kontoor Brands' Third Quarter 2023 Earnings Conference Call. At this time, all pa ...
Kontoor(KTB) - 2023 Q2 - Earnings Call Transcript
2023-08-03 18:58
Eric Tracy - VP, Corporate Finance and IR Scott Baxter - President, CEO and Chair Rustin Welton - CFO Bob Drbul - Guggenheim Will Gaertner - Wells Fargo Jim Duffy - Stifel Mauricio Serna - UBS Brooke Roach - Goldman Sachs Paul Kearney - Barclays Kontoor Brands, Inc. (NYSE:KTB) Q2 2023 Earnings Conference Call August 3, 2023 8:30 AM ET Conference Call Participants Company Participants Operator And then just following up on gross margin, again, like it seems like it's inflecting positive or the way you're tal ...
Kontoor(KTB) - 2022 Q4 - Annual Report
2023-03-01 20:43
Revenue Performance - Net revenues increased by 6% to $2.6 billion in fiscal 2022, driven by growth in U.S. Wholesale and Direct-to-Consumer channels, despite a 2% unfavorable impact from foreign currency[181] - U.S. Wholesale revenues rose by 11%, accounting for 72% of total revenues, while Non-U.S. Wholesale revenues decreased by 8% due to a 7% unfavorable impact from foreign currency and COVID-19 restrictions in APAC[181] - Revenues in the Americas region increased by 13%, with a 12% increase in the U.S. Wholesale channel and growth in owned e-commerce sites[194] - Global revenues for the Lee brand decreased by 1%, with a 3% unfavorable impact from foreign currency[196] - Revenues in the APAC region decreased by 31%, driven by a decline in the India business and a 4% unfavorable impact from foreign currency[194] Profitability Metrics - Gross margin decreased by 160 basis points to 43.1%, primarily due to increased product and ocean freight costs from inflationary pressures and higher provisions for inventory losses[181] - Operating margin decreased to 13.8% from 14.5% in 2021, primarily due to increased product and ocean freight costs[196] - Total reportable segment profit increased by 4.7% to $442.2 million in 2022[200] - Net income increased by 26% to $245.5 million, reflecting improved business results[181] Strategic Initiatives - The company is focused on a multi-year strategic vision "Catalyzing Growth," which includes expanding its core U.S. Wholesale business and geographic expansion, particularly in China[178] - The company incurred $13.7 million in severance and employee-related benefits due to the relocation of its European headquarters to Geneva, Switzerland[178] Expenses and Cost Management - Selling, general and administrative expenses as a percentage of revenues decreased to 29.6% from 33.3%, attributed to lower ERP implementation costs and reduced retail store expenses[181] - Cash provided by operating activities decreased by $200.3 million to $83.6 million in 2022 compared to 2021[218] Shareholder Returns - The Company paid $103.7 million in dividends to shareholders during 2022[212] - The Company repurchased 1.5 million shares for $62.5 million under the share repurchase program during 2022[211] Financial Position and Liquidity - As of December 2022, the Company had $487.9 million available borrowing capacity under the Amended Revolving Credit Facility[210] - As of December 2022, the Company had $59.2 million in cash and cash equivalents, with ongoing monitoring of credit ratings of financial institutions[252] Taxation and Deferred Tax Assets - The effective income tax rate for 2022 was 23.1%, up from 20.1% in 2021, influenced by a net discrete tax expense related to deferred tax valuation allowances[186] - The Company has $25.7 million of gross deferred income tax assets related to operating loss carryforwards, with $23.0 million in valuation allowances against those assets[247] - The Company is subject to income taxes in over 50 jurisdictions, with potential changes in tax rates impacting its financial position[244] Market and Currency Risks - Approximately 21% of the Company's net revenues in 2022 were generated in international markets, exposing it to foreign currency exchange rate risks[255] - The company hedges up to 80% of its foreign currency exposures using foreign exchange forward contracts for periods of up to 20 months[257] - A hypothetical 10% change in foreign currency exchange rates at the end of 2022 would result in a change in fair value of hedging contracts of approximately $23.7 million[258] - The company is exposed to market risks for the pricing of cotton, synthetics, and other materials, and negotiates prices in advance when possible to manage these risks[260] Risk Management - The company does not engage in off-balance sheet financial arrangements that could materially affect its financial condition[226] - The company has established counterparty credit guidelines and only enters into derivative transactions with financial institutions that have 'A minus/A3' investment grade credit ratings or better[259] - The company is self-insured for a significant portion of its employee medical and workers' compensation exposures, while purchasing coverage from highly-rated commercial carriers for other risks[251] - The company actively manages its net foreign currency market exposures and may enter into derivative contracts to hedge certain foreign currency accounts payable and receivable transactions[256] Impairment Testing - Management evaluates estimates and assumptions related to impairment testing of long-lived assets, which could lead to material impairments if actual results differ from estimates[234] - The Company utilizes both income-based and market-based valuation methods for goodwill impairment testing, assessing future cash flows and market multiples[238] - The Company has not made material changes in the methodology used to evaluate impairment of property, plant, and equipment during 2022[234]
Kontoor(KTB) - 2022 Q4 - Earnings Call Transcript
2023-02-28 20:07
Kontoor Brands, Inc. (NYSE:KTB) Q4 2022 Earnings Conference Call February 28, 2023 8:30 AM ET Company Participants Eric Tracy - Vice President, Corporate Finance & Investor Relations Scott Baxter - President, Chief Executive Officer & Chair Tom Waldron - Co-Chief Operating Officer & Global Brand President, Wrangler Chris Waldeck - Co-Chief Operating Officer & Global Brand President, Lee Rustin Welton - Chief Financial Officer Conference Call Participants Jay Sole - UBS Bob Drbul - Guggenheim Will Gardner - ...
Kontoor(KTB) - 2022 Q3 - Earnings Call Transcript
2022-11-03 17:00
Kontoor Brands, Inc. (NYSE:KTB) Q3 2022 Earnings Conference Call November 3, 2022 8:30 AM ET Company Participants Eric Tracy - Vice President, Corporate Finance and Investor Relations Scott Baxter - Chair and Chief Executive Officer Rustin Welton - Chief Financial Officer Conference Call Participants Bob Drbul - Guggenheim Securities Mauricio Serna - UBS Will Gardner - Wells Fargo Brooke Roach - Goldman Sachs Paul Kearney - Barclays Operator Greeting and welcome to the Kontoor BrandsÂ' Third Quarter 2022 Ea ...
Kontoor(KTB) - 2022 Q3 - Earnings Call Presentation
2022-11-03 14:55
November 3, 2022 INSPIRING CONFIDENCE, EVERY DAY Kontoor Brands Reports Third Quarter 2022 Results; Updates Outlook for Full Year 2022 Q3'22 revenue of $607 million decreased 7 percent (5 percent in constant currency) compared to Q3'21 Q3'22 reported EPS of $0.90, adjusted EPS of $1.11 compared to Q3'21 reported EPS of $1.07, adjusted EPS of $1.28 2022 revenue is now expected to increase approximately 4 percent (6 percent in constant currency) compared to 2021 and prior guidance of increasing approximately ...
Kontoor(KTB) - 2022 Q2 - Earnings Call Transcript
2022-08-04 18:25
Kontoor Brands, Inc. (NYSE:KTB) Q2 2022 Earnings Conference Call August 4, 2022 8:30 AM ET Company Participants Eric Tracy - Vice President, Corporate Finance and Investor Relations Scott Baxter - Chair and Chief Executive Officer Rustin Welton - Chief Financial Officer Conference Call Participants Mauricio Serna - UBS Bob Drbul - Guggenheim Securities Paul Kearney - Barclays Brooke Roach - Goldman Sachs Will Gardner - Wells Fargo Operator Good day, ladies and gentlemen and welcome to the Kontoor BrandsÂ' Q ...
Kontoor(KTB) - 2022 Q1 - Earnings Call Transcript
2022-05-05 18:54
Financial Data and Key Metrics Changes - Global revenue increased by 5% compared to the previous year, driven by strong performance across brands and categories [11][34] - Earnings per share (EPS) was $1.40, slightly down from $1.43 in the same period last year on an adjusted basis [45] - Gross margin decreased by 140 basis points compared to the adjusted gross margin last year, impacted by inflationary pressures and elevated transitory costs [41][44] Business Line Data and Key Metrics Changes - Wrangler brand revenue increased by 4%, with significant growth in western and workwear categories [37] - Lee brand revenue increased by 7%, with U.S. revenue up by 9% driven by demand at wholesale and digital channels [39] - The core denim long bottoms business was up 8%, while workwear increased nearly 40% and T-shirts were up over 70% [13] Market Data and Key Metrics Changes - U.S. revenue increased by 4%, while international revenue grew by 9%, with EMEA showing a 19% increase [34][36] - In China, revenue was up 3% reported and 1% in constant currency despite COVID lockdowns [16] - European revenue increased by 19%, driven by strength in digital and direct-to-consumer channels [15] Company Strategy and Development Direction - The company is focusing on diversifying distribution channels and expanding into new categories such as outdoor and workwear [12][13] - Investments in digital platforms are reshaping the business model, with significant growth in digital sales [12][18] - The company plans to amplify investments in critical growth enablers such as digitization, demand creation, and talent [17][29] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing macroeconomic challenges, including inflation and supply chain disruptions, but expressed confidence in the company's strategies [8][9] - The company raised its full-year revenue guidance to approximately 10% growth, reflecting strong brand momentum despite challenges in China and EMEA [53][56] - Management emphasized the importance of controlling internal factors, such as product development and demand creation, to navigate the current environment [64] Other Important Information - The company repurchased $23 million in common stock during the quarter, with approximately $100 million remaining under the share repurchase authorization [48] - First quarter inventories increased by 24% compared to last year, as the company chased demand [46] - The company has generated over $600 million in operating cash flow since the start of 2020, allowing for debt reduction and shareholder returns [32] Q&A Session Summary Question: Can you elaborate on the confidence to raise full-year guidance given macro uncertainty? - Management attributed confidence to strong momentum from the previous year and structural changes made within the company, positioning it well for current consumer trends [61][62] Question: How many Lee stores are in China and what is the expectation for demand normalization? - Management indicated that the business in China is healthy, with strong brand presence in Tier 1 cities and optimism for future growth as conditions normalize [74][76] Question: What is the outlook for European performance and any changes in expectations? - Management noted strong first-quarter performance in Europe but anticipated some pressure in Q2 due to timing shifts related to ERP implementation [108] Question: Can you discuss the drivers of sequential improvement in gross margin? - Management highlighted structural margin enhancements and strategic pricing as key drivers, while also acknowledging transitory costs impacting margins [90][92]
Kontoor(KTB) - 2021 Q4 - Earnings Call Transcript
2022-03-01 18:24
Kontoor Brands, Inc. (NYSE:KTB) Q4 2021 Earnings Conference Call March 1, 2021 8:30 AM ET Company Participants Eric Tracy – Vice President-Corporate Finance and Investor Relations Scott Baxter – President, Chief Executive Officer and Chair of the Board Tom Waldron – Global Brand President-Wrangler Chris Waldeck – Global Brand President of Lee Rustin Welton – Chief Financial Officer Conference Call Participants Jay Sole – UBS Brooke Roach – Goldman Sachs Adrienne Yih – Barclays Sam Poser – Williams Trading O ...