Kontoor Brands (KTB) Q3 2025 earnings summary

Executive summary

• Q3 2025 revenue rose 27% year-over-year to $853.2 million, driven by the Helly Hansen acquisition, which contributed up to $193 million in revenue.

• Adjusted gross margin expanded 80 bps to 45.8%, while reported gross margin declined 340 bps to 41.3% due to restructuring, tariffs, and higher product costs.

• Adjusted EPS was $1.44, up 5% year-over-year, but GAAP net income fell 48% to $36.9 million due to higher restructuring, integration, and tariff costs.

• Wrangler achieved its 14th consecutive quarter of market share gains, while Lee's revenue declined due to China actions but showed digital growth and brand realignment progress.

• Helly Hansen integration is progressing, with broad-based growth and a robust order book for 2026.

Financial highlights

• Global revenue increased 27% year-over-year, with Helly Hansen contributing up to $193 million in Q3.

• Adjusted SG&A expense was $269 million; flat year-over-year excluding Helly Hansen.

• Adjusted EPS was $1.44, up 5% year-over-year and $0.09 above prior outlook.

• Inventory at quarter-end was $765 million; net debt was $1.34 billion with a net leverage ratio of 4.2x.

• Board declared a quarterly dividend of $0.53 per share, a 2% increase.

Outlook and guidance

• Full-year 2025 revenue expected at the high end of $3.09–$3.12 billion, up 19–20% year-over-year.

• Helly Hansen to contribute ~$460 million to full-year revenue.

• Adjusted gross margin outlook raised to 46.4%, up 130 bps year-over-year.

• Adjusted EPS now expected at $5.50, up 12% year-over-year.

• Cash from operations expected to reach $400 million; $185 million voluntary term loan payment planned in Q4.