Kontoor Brands (KTB)
NYSE:KTB
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Kontoor Brands
(NYSE:KTB)
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Rating:69Neutral
Price Target:
$87.00
▲(12.56% Upside)
Action:Reiterated
Date:06/01/26
The score is driven primarily by solid profitability and cash generation but held back by leverage and the sharp TTM revenue decline. The latest earnings call improves the outlook via stronger margin/EPS trajectory, buybacks, and a clear deleveraging path, while valuation is supportive and technicals are broadly neutral.
Positive Factors
Gross Margin Expansion
Sustained gross margin expansion driven by Project Genius and Helly Hansen contribution materially improves structural profitability and cash generation. Higher gross margins provide durable buffer against cost volatility, support reinvestment in DTC and product, and enhance ability to deleverage over multiple quarters.
Negative Factors
Elevated Leverage
A debt‑heavy capital structure (historically ~2x–5.7x and current ~2.1x) reduces strategic flexibility and raises refinancing and operational risk if top‑line weakens. High leverage amplifies earnings variability, constrains investment runway, and makes deleveraging progress critical over the next several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Gross Margin Expansion
Sustained gross margin expansion driven by Project Genius and Helly Hansen contribution materially improves structural profitability and cash generation. Higher gross margins provide durable buffer against cost volatility, support reinvestment in DTC and product, and enhance ability to deleverage over multiple quarters.
Read all positive factors
Kontoor Brands Key Performance Indicators (KPIs)
Any
Revenue by Segment
Shows how sales are split across Kontoor’s brands and product lines (for example Wrangler, Lee, and workwear versus casual apparel), revealing which segments are fueling growth or lagging. Helps investors judge whether the company’s momentum is broad-based or concentrated in a single brand, and whether product mix changes could affect future performance.
Shows how sales are split across Kontoor’s brands and product lines (for example Wrangler, Lee, and workwear versus casual apparel), revealing which segments are fueling growth or lagging. Helps investors judge whether the company’s momentum is broad-based or concentrated in a single brand, and whether product mix changes could affect future performance.
Data provided by:
The Fly
The FlyKontoor Brands (KTB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.32B
Dividend Yield3.36%
Average Volume (3M)860.16K
Price to Earnings (P/E)15.6
Beta (1Y)1.27
Revenue Growth20.78%
EPS Growth20.89%
CountryUS
Employees13,200
SectorConsumer Cyclical
Sector Strength84
IndustryApparel - Manufacturers
Share Statistics
EPS (TTM)4.99
Shares Outstanding55,272,358
10 Day Avg. Volume910,819
30 Day Avg. Volume860,165
Financial Highlights & Ratios
PEG Ratio-2.07
Price to Book (P/B)6.04
Price to Sales (P/S)1.08
P/FCF Ratio6.02
Enterprise Value/Market Cap1.24
Enterprise Value/Revenue1.71
Enterprise Value/Gross Profit3.57
Enterprise Value/Ebitda12.12
Forecast
1Y Price Target
$98.17Price Target Upside27.01% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)5.2
Revenue Forecast (FY)$2.71B
Kontoor Brands Business Overview & Revenue Model
Company Description
Kontoor Brands, Inc. is a lifestyle clothing company that specializes in the creation, production, sourcing, promotion, and sale of denim, various garments, and related accessories. Their well-known brands include Wrangler, Lee, and Rock & Republi...
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...
Kontoor Brands Earnings Call Summary
Earnings Call Date:May 07, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 30, 2026
Earnings Call Sentiment Positive
The call presents strong operational and financial momentum: robust margin expansion, double-digit adjusted EPS growth, clear growth trajectories for Wrangler and Helly Hansen, a defensible capital allocation plan (large buyback authorization) and disciplined deleveraging. Near-term headwinds include elevated SG&A from Helly integration and growth investments, approximately $40 million of unmitigated costs shifted to continuing operations due to the Lee divestiture, tariff/input cost uncertainty and reliance on the timing of the Lee sale to fully realize capital deployment plans. On balance, the positive developments (margin expansion, EPS acceleration, brand momentum, buyback authorization and debt paydown progress) outweigh the near-term challenges.Positive Updates
Strategic Portfolio Move — Lee Divestiture
Announced initiation of a competitive sales process to divest the Lee brand to sharpen focus on Wrangler and Helly Hansen; Lee will be reported as discontinued operations and management expects proceeds to increase capital allocation optionality (majority earmarked for share repurchases).
Negative Updates
Significant SG&A Increase
Adjusted SG&A rose 60% year-over-year to $224 million in Q1 driven by Helly Hansen annualization and increased investments in demand creation, DTC and variable expenses; full-year adjusted SG&A from continuing operations expected to increase ~18% (includes $35 million of unmitigated Lee expenses).
Read all updates
Q1-2026 Updates
Positive
Negative
Strategic Portfolio Move — Lee Divestiture
Announced initiation of a competitive sales process to divest the Lee brand to sharpen focus on Wrangler and Helly Hansen; Lee will be reported as discontinued operations and management expects proceeds to increase capital allocation optionality (majority earmarked for share repurchases).
Read all positive updates
Company Guidance
Kontoor updated 2026 guidance with full‑year revenue of $3.41–3.46B (continuing operations $2.66–2.71B; Lee ~ $750M now in discontinued ops), H1 continuing ops revenue $1.19–1.20B (≈3% Wrangler, high‑single‑digit Helly pro forma), full‑year adjusted gross margin 48.3–48.5% (+180–200 bps YoY) and H1 adjusted gross margin 50.3–50.5% (+400–420 bps), adjusted SG&A expected to increase ~18% (includes $35M of unmitigated Lee expenses), adjusted operating income $411–418M (includes ~ $40M of unmitigated expenses), full‑year adjusted EPS from continuing operations $5.70–5.80 before a $0.55 unmitigated impact (or $5.15–5.25 including it), Lee contribution ~ $0.90 (≈$1.45 including reclassified costs), H1 adjusted EPS (including discontinued ops) $2.77–2.82, effective tax ~20% for the year (~25% H1), cash from operations ≈ $450M with $225M planned voluntary term‑loan payments and a target to exit 2026 at ≤1.5x net leverage, a new $750M share‑repurchase authorization (Q1 buybacks $25M), Q1 inventory $464M, net debt $1.1B, cash $56M, and management expects to enter a Lee divestiture agreement later this year while absorbing a near‑term ~$40M annual P&L impact.Kontoor Brands Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
52
Neutral
Cash Flow
68
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.14B | 3.15B | 2.61B | 2.61B | 2.63B | 2.48B |
| Gross Profit | 1.50B | 1.47B | 1.16B | 1.09B | 1.13B | 1.11B |
| EBITDA | 443.06M | 412.30M | 384.88M | 350.35M | 391.18M | 320.10M |
| Net Income | 277.01M | 227.45M | 245.80M | 230.99M | 245.49M | 195.42M |
Balance Sheet | ||||||
| Total Assets | 2.65B | 2.58B | 1.65B | 1.65B | 1.58B | 1.53B |
| Cash, Cash Equivalents and Short-Term Investments | 56.41M | 108.44M | 334.07M | 215.05M | 59.18M | 185.32M |
| Total Debt | 1.28B | 1.29B | 791.16M | 841.68M | 851.30M | 848.75M |
| Total Liabilities | 2.03B | 2.02B | 1.25B | 1.27B | 1.33B | 1.38B |
| Stockholders Equity | 618.87M | 564.87M | 400.06M | 371.91M | 250.76M | 148.14M |
Cash Flow | ||||||
| Free Cash Flow | 400.17M | 566.72M | 346.11M | 319.17M | 55.19M | 246.99M |
| Operating Cash Flow | 424.44M | 587.77M | 368.23M | 356.55M | 83.58M | 283.86M |
| Investing Cash Flow | -890.10M | -898.76M | -22.26M | -39.14M | -30.12M | -39.37M |
| Financing Cash Flow | 215.18M | 246.80M | -240.35M | -155.70M | -170.91M | -304.07M |
Kontoor Brands Technical Analysis
Positive
77.29
Price Trends
71.83
Positive
69.38
Positive
70.53
Positive
Market Momentum
2.25
Negative
59.37
Neutral
59.42
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 77.29 is above the 20-day moving average (MA) of 73.34, above the 50-day MA of 71.83, and above the 200-day MA of 70.53, indicating a bullish trend. The MACD of 2.25 indicates Negative momentum. The RSI at 59.37 is Neutral, neither overbought nor oversold. The STOCH value of 59.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KTB.
Kontoor Brands Risk Analysis
Kontoor Brands disclosed 41 risk factors in its most recent earnings report. Kontoor Brands reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Kontoor Brands Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $24.59B | 26.77 | 34.77% | 0.93% | 14.63% | 29.96% | |
70 Outperform | $3.40B | 20.66 | 10.26% | 2.18% | 0.54% | -19.72% | |
69 Neutral | $4.32B | 15.58 | 50.10% | 3.36% | 20.78% | 20.89% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
52 Neutral | $6.80B | 26.61 | 15.92% | 1.95% | -0.72% | ― |
* Consumer Cyclical Sector Average
KTB
Kontoor Brands
78.17
16.42
26.59%
COLM
Columbia Sportswear
66.46
7.37
12.47%
RL
Ralph Lauren
413.01
151.90
58.18%
VFC
VF
17.33
5.87
51.21%
Kontoor Brands Corporate Events
Executive/Board Changes
Kontoor Brands Announces Chief Accounting Officer Leadership Transition
Neutral
Jun 15, 2026
On June 12, 2026, Kontoor Brands announced that S. Denise Sumner will retire as Vice President and Chief Accounting Officer, effective August 28, 2026, after nearly 16 years with the company and its predecessor. She will remain full time in her ro...
Business Operations and StrategyStock BuybackM&A Transactions
Kontoor Brands Sells Lee Business to Authentic Brands
Positive
May 21, 2026
On May 21, 2026, Kontoor Brands announced a definitive agreement to sell its Lee business to Authentic Brands Group in a transaction valued at up to $1 billion, including an initial $750 million consideration and a potential $250 million earnout t...
Business Operations and StrategyStock BuybackDividendsFinancial DisclosuresM&A Transactions
Kontoor Brands boosts outlook amid Lee divestiture plans
Positive
May 7, 2026
Kontoor Brands reported stronger first-quarter 2026 results on May 7, 2026, with revenue from continuing operations rising 45% to $613 million, supported by 4% growth at Wrangler and solid contributions from Helly Hansen. The company raised its fu...
DividendsRegulatory Filings and ComplianceShareholder Meetings
Kontoor Brands Declares Quarterly Dividend After Governance Changes
Positive
Apr 24, 2026
On April 23, 2026, Kontoor Brands’ board approved amendments to its bylaws, effective immediately after the 2026 annual shareholder meeting, tightening rules around shareholder proposals and director nominations while clarifying procedures f...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.