Kontoor Brands (KTB) AI Stock Analysis

• Market Cap: $3.82B
• Dividend Yield: 3.36%
• Average Volume (3M): 917.19K
• Price to Earnings (P/E): 15.0
• Beta (1Y): 1.20
• Revenue Growth: 9.90%
• EPS Growth: -12.67%
• Country: US
• Employees: 13,200
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Manufacturers
• EPS (TTM): 1.73
• Shares Outstanding: 55,254,143
• 10 Day Avg. Volume: 990,384
• 30 Day Avg. Volume: 917,187
• PEG Ratio: -2.07
• Price to Book (P/B): 6.04
• Price to Sales (P/S): 1.08
• P/FCF Ratio: 6.02
• Enterprise Value/Market Cap: 1.32
• Enterprise Value/Revenue: 1.59
• Enterprise Value/Gross Profit: 3.42
• Enterprise Value/Ebitda: 11.66
• 1Y Price Target: $96.13
• Price Target Upside: 39.18% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9
• EPS Forecast (FY): 5.96
• Revenue Forecast (FY): $3.44B

• Rating: 71 Outperform
• Price Target: $76.00 ▲(10.03% Upside)
• Action: Upgraded Date: 03/05/26
• Date: Action: Upgraded 03/05/26

Overall score reflects strong momentum and a favorable earnings outlook (growth, margin expansion, cost-savings execution), supported by reasonable valuation and dividend yield. The main offset is balance-sheet risk from elevated leverage, alongside meaningful tariff and Lee-brand headwinds highlighted in the latest call.

Positive Factors

Strong cash generation

Operating and free cash flow of roughly $456M provides durable internal financing for debt reduction, dividends, buybacks and strategic investment. Reliable cash conversion cushions apparel cyclicality and underpins management's ability to deleverage and fund growth initiatives.

Helly Hansen acquisition accretion

Helly Hansen added material scale (pro‑forma revenue > $700M) and ~ $100M cash generation in seven months while contributing to EPS. Identified synergies and improved mix diversify Kontoor beyond core denim, strengthening long-term revenue and margin profile through expanded product and channel exposure.

Project Genius cost efficiencies

Project Genius is a scalable structural program delivering >$50M in 2025 and targeting ~$100M in 2026. Recurring cost and productivity gains improve gross margin durability, offset external cost pressures, and provide reinvestment capacity to support brand building and deleveraging over multiple years.

Negative Factors

High leverage / debt-heavy structure

Total debt near $1.29B and debt-to-equity around 2.29x leave the capital structure reliant on sustained cash generation. Elevated leverage raises interest and refinancing risk, constrains flexibility for M&A or buybacks, and makes meeting the <1.5x target dependent on continued strong FCF execution.

Tariff-related gross headwind

An estimated >$100M tariff hit (160–180bps of gross margin pressure) and inventory exposed to 20% reciprocal tariffs create persistent margin risk. Trade-policy uncertainty and potential delays in exemptions mean costs could depress margins and require sustained mitigation via pricing, sourcing or savings programs.

Lee brand and wholesale softness

Lee saw a meaningful revenue decline (global -6%, international -15%) and wholesale softness in key markets. Channel and distribution disruptions imply Lee may be a multi-quarter drag on consolidated growth, requiring targeted investments and partner resets to restore volumes and margins over the medium term.

Kontoor Brands Business Overview & Revenue Model

Company Description

Kontoor Brands, Inc., a lifestyle apparel company, designs, manufactures, procures, markets, and distributes denim, apparel, and accessories under the Wrangler, Lee, and Rock & Republic brands in the United States and internationally. It operates through two segments, Wrangler and Lee. The company sells its products primarily through mass merchants, specialty stores, mid-tier and traditional department stores, company-operated stores, and online. As of January 1, 2022, it operated 80 retail stores across the Americas, Europe, the Middle East, Africa, and the Asia-Pacific regions. The company was incorporated in 2018 and is headquartered in Greensboro, North Carolina.

How the Company Makes Money

Kontoor Brands makes money primarily by selling branded apparel—especially denim products—under the Wrangler and Lee brands through a mix of wholesale and direct-to-consumer (DTC) channels. Key revenue streams include: 1) Wholesale sales: Kontoor sells products in bulk to retailers (e.g., department stores, mass merchants, specialty retailers, and other distribution partners). Revenue is recognized from shipments/sales to these customers, and performance is driven by order volumes, product mix (e.g., jeans, tops, jackets), pricing, and retail demand. 2) Direct-to-consumer (DTC) sales: Kontoor generates revenue by selling directly to end consumers via brand websites/e-commerce and company-operated retail stores where applicable. DTC typically allows the company to capture the retail margin (rather than only the wholesale margin), with results influenced by website traffic, conversion, average order value, store productivity, and fulfillment costs. 3) International and licensing/other arrangements: The company sells products outside the U.S. through a combination of owned operations and third-party distribution structures, which can include local partners depending on the market. Specific partner identities or the exact structure by country are not provided here; if required at a granular level, return null. Major factors that contribute to earnings (profitability) include brand strength and consumer demand for Wrangler and Lee, the balance between wholesale and DTC (channel mix), product pricing and promotional activity, sourcing/manufacturing costs, supply chain and logistics efficiency, and foreign currency impacts on international sales.

Kontoor Brands Financial Statement Overview

Summary

Solid earnings and cash generation (operating cash flow and free cash flow around $456M; healthy EBITDA margin), but balance-sheet risk is a meaningful drag as leverage increased and remains debt-heavy (debt-to-equity ~2.29x).

Income Statement

Revenue has recovered well over time, including an 11.3% increase in the latest annual period versus the prior year, but sales were essentially flat in 2023–2024 before re-accelerating. Profitability is solid overall (net margin ~7.2% in the latest year), though it has softened from 2024 (~9.4%). Operating profitability is harder to fully assess in the latest year due to missing gross profit and operating margin fields, but the EBITDA margin remains healthy at ~10.7%.

Balance Sheet

Leverage has increased meaningfully in the latest annual period: total debt rose to ~$1.29B while equity is ~$0.56B, pushing debt-to-equity to ~2.29x (up from ~1.98x in 2024). Total assets also increased, but the capital structure remains debt-heavy versus equity, which raises financial risk. Return on equity is high (~40% latest year), but that strength is partly amplified by leverage rather than purely operating efficiency.

Cash Flow

Cash generation is a clear strength: operating cash flow rose to ~$456M and free cash flow also ~$456M in the latest annual period, with a very large free-cash-flow growth rate reported. Free cash flow is strong relative to earnings (about equal to net income in the latest year), indicating solid cash conversion. A watch item is that cash flow coverage metrics are not consistently high across periods (e.g., notably weak in 2022), suggesting potential variability in working capital or cash timing.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.15B	2.61B	2.61B	2.63B	2.48B
Gross Profit	1.47B	1.16B	1.09B	1.13B	1.11B
EBITDA	493.80M	384.88M	350.35M	391.18M	320.10M
Net Income	227.45M	245.80M	230.99M	245.49M	195.42M
Balance Sheet
Total Assets	2.58B	1.65B	1.65B	1.58B	1.53B
Cash, Cash Equivalents and Short-Term Investments	108.44M	334.07M	215.05M	59.18M	185.32M
Total Debt	1.29B	791.16M	841.68M	851.30M	848.75M
Total Liabilities	2.02B	1.25B	1.27B	1.33B	1.38B
Stockholders Equity	564.87M	400.06M	371.91M	250.76M	148.14M
Cash Flow
Free Cash Flow	566.72M	346.11M	319.17M	55.19M	246.99M
Operating Cash Flow	587.77M	368.23M	356.55M	83.58M	283.86M
Investing Cash Flow	-898.76M	-22.26M	-39.14M	-30.12M	-39.37M
Financing Cash Flow	246.80M	-240.35M	-155.70M	-170.91M	-304.07M

Kontoor Brands Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 69.07
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KTB, the sentiment is Positive. The current price of 69.07 is below the 20-day moving average (MA) of 69.30, above the 50-day MA of 64.71, and below the 200-day MA of 69.16, indicating a neutral trend. The MACD of 0.86 indicates Positive momentum. The RSI at 52.31 is Neutral, neither overbought nor oversold. The STOCH value of 23.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KTB.

Kontoor Brands Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KTB	71 Outperform	$3.82B	15.01	45.05%	3.36%	9.90%	-12.67%
RL	69 Neutral	$20.69B	15.13	34.74%	0.93%	12.32%	29.40%
COLM	68 Neutral	$2.88B	17.00	10.53%	2.18%	2.76%	-7.83%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
VFC	53 Neutral	$6.41B	6.01	14.79%	1.95%	-3.12%	―

Kontoor Brands Corporate Events

Kontoor Brands Declares Quarterly Dividend, Continues Investor Returns

On February 12, 2026, Kontoor Brands’ board approved an Executive Severance Plan that provides tiered severance benefits, including base salary continuation, subsidized COBRA coverage and a pro rated annual bonus, to eligible executives who experience a qualifying termination outside a change-in-control context. The plan, covering named executive officers and other senior leaders, sets longer benefit periods for the CEO and executive vice presidents and applies only when specific conditions are met, such as termination without cause or resignation for defined good reason.

The severance framework formalizes protections for top management while imposing eligibility requirements like participation agreements, continued performance through the job-end date and adherence to restrictive covenants, and it excludes executives offered comparable roles or those violating plan terms. On February 13, 2026, the board also declared a regular quarterly cash dividend of $0.53 per share, payable March 20, 2026 to shareholders of record on March 10, 2026, underscoring the company’s continued capital return to investors.

The most recent analyst rating on (KTB) stock is a Hold with a $65.00 price target. To see the full list of analyst forecasts on Kontoor Brands stock, see the KTB Stock Forecast page.