Kontoor Brands saw third-quarter sales beat expectations, prompting the retailer to adjust its FY23 outlook.

The company behind the Lee and Wrangler brands booked net revenue of $654.5 million in the three months to September 30, up 8 per cent from the previous year.

Revenue rose 12 per cent to $506 million in the US but fell 4 per cent to $149 million in the international markets.

Wrangler brand revenue increased 9 per cent to $445 million while Lee brand revenue jumped 5 per cent to $208 million.

Net income climbed 17 per cent to $59.5 million as gross margin fell to 41.5 per cent.

“Supported by strategic investments in our brands, US point-of-sale strength continued, driving further market share gains in core US wholesale. And we delivered another solid quarter in DTC, a critical growth pillar of our diversified, accretive growth strategy,” said Scott Baxter, president, CEO, and chair at Kontoor Brands.

“We are prudently managing our inventory and are focused on reducing inventory levels further as we establish an even stronger foundation for next year,” said Baxter, noting that Kontoor Brands continues to anticipate a challenging macro-environment.

“Beginning with the fourth quarter, we expect gross margin expansion to drive accelerated earnings growth into 2024.”

The company now forecasts a 1 per cent increase in revenue for the full year.