Kontoor Brands (KTB) Q2 2026 earnings summary

Executive summary

• Achieved an inflection point in value creation, driven by strategic initiatives including building Wrangler momentum, integrating Helly Hansen, and completing Project Genius/Jeanius.

• Revenue from continuing operations rose 19% year-over-year to $584.3 million in Q2 FY26, with Helly Hansen contributing $114 million and Wrangler growing 2%.

• Gross margin expanded 970 basis points to 56.2%, benefiting from favorable mix, cost reductions, and a $15.4 million gain on a facility sale.

• The Lee business divestiture is on track for Q4, with proceeds to fund a $400 million accelerated share repurchase and debt reduction.

• Helly Hansen integration exceeded expectations, with revenue and margin ahead of plan and strong growth in sport and workwear segments.

Financial highlights

• Q2 FY26 net revenues: $584.3 million (+19% YoY); six months: $1.2 billion (+31% YoY).

• Adjusted gross margin for Q2 was 53.8%, up 710 basis points year-over-year; reported gross margin was 56.2%.

• Adjusted EPS for the first half was $2.12, up 36% year-over-year; Q2 adjusted EPS grew 13% to $1.06.

• Adjusted operating income reached $94 million in Q2, up 19% year-over-year; adjusted EBITDA was $103.1 million.

• Inventory at quarter-end was $526 million, down 3% year-over-year.

Outlook and guidance

• Full-year revenue expected between $2.66 billion and $2.71 billion, up 12–13% year-over-year.

• Full-year adjusted gross margin outlook raised to 49.8–50%, up 330–350 basis points year-over-year.

• Adjusted operating income expected at $413–$420 million, up 15–17% year-over-year.

• Adjusted EPS expected at $5.25–$5.35, up 27–29% year-over-year.

• Over $900 million in capital returns planned for the year via share repurchases, dividends, and debt payments.