Kontoor Brands (KTB) AI Stock Analysis

• Market Cap: $4.70B
• Dividend Yield: 2.41%
• Average Volume (3M): 598.08K
• Price to Earnings (P/E): 18.8
• Beta (1Y): 1.10
• Revenue Growth: 3.47%
• EPS Growth: 5.86%
• Country: US
• Employees: 13,200
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Manufacturers
• EPS (TTM): 1.21
• Shares Outstanding: 55,574,234
• 10 Day Avg. Volume: 488,703
• 30 Day Avg. Volume: 598,078
• PEG Ratio: 2.74
• Price to Book (P/B): 11.83
• Price to Sales (P/S): 1.81
• P/FCF Ratio: 13.67
• Enterprise Value/Market Cap: 1.09
• Enterprise Value/Revenue: 1.93
• Enterprise Value/Gross Profit: 4.23
• Enterprise Value/Ebitda: 12.63
• 1Y Price Target: $94.57
• Price Target Upside: 9.62% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7

• Rating: 71 Outperform
• Price Target: $87.00 ▲(0.85% Upside)

Kontoor Brands' overall stock score is driven by strong earnings performance and successful integration of Helly Hansen, which boosts revenue and EPS. While financial performance is solid, high debt levels and declining cash flow growth are risks. Technical indicators suggest a positive trend, and the valuation is fair, providing a balanced investment opportunity.

Positive Factors

Revenue Growth

Kontoor Brands' strong revenue growth, particularly from Wrangler and Helly Hansen, indicates robust market demand and successful brand integration, supporting long-term expansion.

Leadership Changes

Strategic leadership changes aim to enhance global operations and brand management, positioning Kontoor Brands for sustained growth and competitive advantage.

Market Share Gains

Consistent market share gains for Wrangler demonstrate strong brand positioning and consumer loyalty, reinforcing Kontoor Brands' competitive edge in the apparel market.

Negative Factors

High Leverage

Significant leverage poses a risk to financial stability, potentially limiting Kontoor Brands' ability to invest in growth opportunities and manage economic downturns.

Declining Free Cash Flow

Decreasing free cash flow growth may hinder Kontoor Brands' capacity to fund operations and strategic initiatives, impacting long-term financial health.

Tariff Impact

Tariff impacts could pressure margins and profitability, challenging Kontoor Brands' ability to maintain competitive pricing and operational efficiency.

Kontoor Brands Business Overview & Revenue Model

Company Description

Kontoor Brands, Inc. is a global leader in lifestyle apparel, primarily focused on the denim and casual wear sectors. Established as a spin-off from VF Corporation, Kontoor Brands operates through its iconic brands, including Wrangler and Lee, which are known for their quality denim products. The company designs, markets, and sells a wide range of clothing and accessories, catering to diverse consumer segments worldwide.

How the Company Makes Money

Kontoor Brands generates revenue through the direct sale of its apparel products, primarily denim jeans, tops, and outerwear, across multiple distribution channels including wholesale, retail, and e-commerce. The company sells its products to a wide range of retailers, both department stores and specialty shops, and also operates its own branded retail stores and online platforms. Key revenue streams include seasonal collections, collaborations with other brands and designers, and licensing agreements. Kontoor Brands benefits from strategic partnerships with various retailers and online platforms, enhancing its market reach and driving sales. Additionally, the company capitalizes on brand loyalty and a strong heritage in denim to maintain a competitive edge in the apparel market.

Kontoor Brands Financial Statement Overview

Summary

Kontoor Brands shows solid profitability with healthy margins and a strong return on equity. However, high debt levels and declining free cash flow growth present potential risks. The company needs to focus on managing its leverage and improving cash flow generation to sustain long-term growth and financial stability.

Income Statement

Kontoor Brands shows a solid performance in its income statement with a consistent gross profit margin around 45% and a stable net profit margin of approximately 9%. The TTM revenue growth rate is positive at 1.93%, indicating a steady increase in sales. EBIT and EBITDA margins are healthy, reflecting efficient operational management. However, the revenue growth rate has slowed compared to previous years, which could be a concern if it continues.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 3.07 in the TTM period, indicating significant leverage, which poses a risk if not managed properly. Return on equity is strong at 54.50%, suggesting effective use of equity to generate profits. The equity ratio is relatively low, reflecting a reliance on debt financing. Overall, while profitability is high, the high leverage is a potential risk factor.

Cash Flow

Cash flow analysis shows a decline in free cash flow growth by 18.98% in the TTM period, which is concerning. However, the operating cash flow to net income ratio is reasonable at 0.70, indicating that the company is generating sufficient cash from operations. The free cash flow to net income ratio is close to 1, suggesting that most of the net income is being converted into free cash flow. The decline in free cash flow growth needs to be monitored closely.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2019	Dec 2018
Income Statement
Total Revenue	2.65B	2.61B	2.61B	2.63B	2.55B	2.76B
Gross Profit	1.21B	1.16B	1.09B	1.13B	1.00B	1.11B
EBITDA	403.95M	342.29M	350.35M	407.48M	256.25M	384.46M
Net Income	251.28M	245.80M	230.99M	245.49M	96.65M	263.07M
Balance Sheet
Total Assets	2.72B	1.65B	1.65B	1.58B	1.52B	2.46B
Cash, Cash Equivalents and Short-Term Investments	107.48M	334.07M	215.05M	59.18M	106.81M	96.78M
Total Debt	1.53B	791.16M	841.68M	851.30M	1.00B	272.33M
Total Liabilities	2.22B	1.25B	1.27B	1.33B	1.45B	735.01M
Stockholders Equity	498.35M	400.06M	371.91M	250.76M	69.26M	1.72B
Cash Flow
Free Cash Flow	299.28M	346.11M	319.17M	55.19M	740.30M	-119.00M
Operating Cash Flow	318.87M	368.23M	356.55M	83.58M	777.79M	-96.30M
Investing Cash Flow	-866.25M	-22.26M	-39.14M	-30.12M	483.95M	11.33M
Financing Cash Flow	452.98M	-240.35M	-155.70M	-170.91M	-1.25B	106.33M

Kontoor Brands Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 86.27
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 86.27 is above the 20-day moving average (MA) of 80.57, above the 50-day MA of 77.55, and above the 200-day MA of 71.05, indicating a bullish trend. The MACD of 1.32 indicates Negative momentum. The RSI at 63.06 is Neutral, neither overbought nor oversold. The STOCH value of 88.95 is Negative, 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
RL	77 Outperform	$19.30B	25.42	32.55%	1.08%	9.61%	21.14%
KTB	71 Outperform	$4.70B	18.85	58.07%	2.41%	3.47%	5.86%
COLM	67 Neutral	$2.79B	12.98	12.93%	2.36%	0.81%	4.86%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
HBI	55 Neutral	$2.43B	15.45	154.00%	―	-27.88%	―
VFC	51 Neutral	$5.54B	65.24	7.83%	2.54%	-7.41%	―

Kontoor Brands Corporate Events

Kontoor Brands Announces Executive Transition Agreement

On July 29, 2025, Kontoor Brands announced that Thomas E. Waldron stepped down from his position as Executive Vice President and Chief Operating Officer. He will remain with the company in a non-executive role until September 30, 2025, to ensure a smooth transition. Under a Separation Agreement signed on August 31, 2025, Waldron will receive $1,350,000 over eighteen months, along with other benefits such as eligibility for performance-based incentives and healthcare coverage under COBRA. The agreement also includes non-compete and non-solicitation clauses.

Kontoor Brands Announces Leadership Changes for Growth

On July 29, 2025, Kontoor Brands announced leadership changes with Joseph A. Alkire and Jennifer H. Broyles taking on expanded roles. Alkire will now oversee global operations as Executive Vice President, Chief Financial Officer, and Head of Global Operations, while Broyles will lead international and commercial operations for Lee and Wrangler as Executive Vice President, Chief Commercial Officer, and Global Head of Brands. These changes are part of Kontoor’s strategic evolution to expand its brand portfolio and accelerate growth, aiming to deliver long-term value for shareholders. Tom Waldron, the outgoing Executive Vice President and Chief Operating Officer, will assist in the transition until September 30, 2025.

Kontoor Brands Declares Quarterly Cash Dividend

On July 25, 2025, Kontoor Brands, Inc. announced that its Board of Directors declared a regular quarterly cash dividend of $0.52 per share of common stock. This dividend is payable on September 19, 2025, to shareholders of record as of September 9, 2025. This decision reflects the company’s ongoing commitment to providing value to its shareholders and may impact its financial positioning and stakeholder relations.