Kontoor Brands has reported flat sales for the first quarter amid the mixed performance of its Wrangler and Lee labels.
The company’s revenue for the quarter ended March 29 was $623 million, down 1 per cent on a reported basis and flat in constant currency. The 2 per cent decline in wholesales sales was partially by a 5 per cent increase in direct-to-consumer sales.
Wrangler saw a 3 per cent uplift in revenue, while Lee recorded a per cent decline, primarily driven by lower wholesales numbers.
By region, the company’s US revenue was flat while international revenue fell 7 per cent (down 3 per cent in constant currency). Specifically, sales were down 18 per cent in non-US Americas, 4 per cent in Europe and 3 per cent in Asia.
On the bottom line, adjusted operating income rose 4 per cent to $96 million.
Kontoor has updated its full-year outlook to reflect the acquisition of Canadian outdoor workwear brand Helly Hansen, which it expects to complete late this month.
The company anticipates revenue growth of approximately 17 to 19 per cent, including a 16 per cent benefit from Helly Hansen.
Excluding the impact of the new label, revenue is expected to increase about 1-2 per cent, compared to the prior outlook of 1-3 per cent.
Based on recently enacted tariff policy changes, Kontoor expects an estimated $50 million unmitigated impact to full-year operating income.
The company plans to begin offsetting this impact in the third quarter through targeted price increases, sourcing and production optimization, inventory management, and supplier partnerships. It expects to substantially offset the impact over 12 to 18 months.
