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Millennial Demand and Brand Collabs Propel Kontoor to Lift 2025 Forecast
Yahoo Financeยท 2025-11-03 18:09
Core Insights - Kontoor Brands is raising its full year outlook due to stronger revenue and earnings growth, enhanced cash generation, and benefits from Project Jeanius, which aims to transform its global operating model and optimize its supply chain [1] Revenue Outlook - Revenue is now expected to be at the high end of the previous outlook range of $3.09 to $3.12 billion, indicating a growth of approximately 19 to 20 percent compared to the prior year [1] Operational Strategy - The forecast includes a 30 percent reciprocal tariff on China and a 20 percent reciprocal tariff on other sourcing countries, except Mexico, and the company plans to offset tariff impacts through price increases, supply chain optimization, and inventory management over a 12-to-18-month period [3] Pricing Strategy - Pricing adjustments have been implemented as part of a comprehensive strategy to mitigate tariff impacts, with changes effective mid-June for direct-to-consumer and in July for wholesale [4] Revenue Performance - Q3 2025 revenue reached $853 million, reflecting a 27 percent increase compared to the prior year [4] - Wrangler brand revenue increased by 2 percent to $471 million, contributing to broad-based growth and market share gains [5] Market Share Gains - Wrangler's U.S. revenue grew by 1 percent, driven by an 11 percent increase in direct-to-consumer sales, while U.S. wholesale remained flat due to shipment timing shifts [6] - Wrangler's international revenue increased by 6 percent, supported by a 5 percent rise in wholesale and a 12 percent increase in direct-to-consumer [6] - Q3 marks Wrangler's 14th consecutive quarter of market share gains, with the core men's and women's bottoms business gaining 80 basis points of market share [7]