Kontoor Brands (KTB) AI Stock Analysis

• Market Cap: $3.56B
• Dividend Yield: 3.27%
• Average Volume (3M): 643.75K
• Price to Earnings (P/E): 16.5
• Beta (1Y): 1.28
• Revenue Growth: 9.90%
• EPS Growth: -12.67%
• Country: US
• Employees: 13,200
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Manufacturers
• EPS (TTM): 1.44
• Shares Outstanding: 55,593,613
• 10 Day Avg. Volume: 858,712
• 30 Day Avg. Volume: 643,750
• 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: 1.67
• Enterprise Value/Revenue: 2.09
• Enterprise Value/Gross Profit: 4.58
• Enterprise Value/Ebitda: 15.94
• 1Y Price Target: $97.83
• Price Target Upside: 53.24% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): 5.49
• Revenue Forecast (FY): $3.11B

• Rating: 66 Neutral
• Price Target: $73.00 ▲(14.35% Upside)

Kontoor Brands' overall stock score is driven by its strong earnings call performance and reasonable valuation, including an attractive dividend yield. However, financial performance is hindered by high leverage and declining cash flow growth, while technical indicators suggest a bearish trend. The recent dividend increase is a positive corporate event, but challenges such as Lee's revenue decline and inventory issues remain.

Positive Factors

Revenue Growth

The upward revision in revenue outlook indicates strong market demand and effective sales strategies, supporting long-term growth.

Debt Reduction

Proactive debt reduction efforts enhance financial stability and reduce interest burden, improving long-term financial health.

Dividend Increase

Increasing dividends reflects strong cash generation and commitment to shareholder returns, enhancing investor confidence.

Negative Factors

High Leverage

High leverage can strain financial flexibility and increase risk, potentially impacting long-term financial stability.

Declining Cash Flow

Declining cash flow growth may limit the company's ability to invest in growth opportunities and manage debt effectively.

Lee Revenue Decline

A decline in Lee's revenue suggests challenges in market positioning and demand, potentially affecting overall brand performance.

Kontoor Brands Business Overview & Revenue Model

Company Description

Kontoor Brands, Inc. is a global lifestyle apparel company specializing in the design, manufacture, and marketing of jeanswear and other apparel. Headquartered in Greensboro, North Carolina, Kontoor Brands operates primarily in the denim sector and is known for its iconic brands, including Wrangler and Lee. The company focuses on delivering high-quality, innovative products while promoting sustainability and responsible sourcing practices in its operations.

How the Company Makes Money

Kontoor Brands generates revenue through the sale of its branded apparel, primarily jeans and casual wear, across various distribution channels including wholesale, direct-to-consumer retail, and e-commerce platforms. Key revenue streams include wholesale partnerships with department stores, specialty retailers, and mass retailers, as well as direct sales through company-owned stores and online platforms. The company benefits from strong brand recognition and loyalty, which drives consistent sales. Additionally, Kontoor Brands engages in strategic partnerships and collaborations that enhance its market presence and expand its reach to new customer segments, contributing to its overall revenue growth.

Kontoor Brands Financial Statement Overview

Summary

Kontoor Brands demonstrates solid profitability and operational efficiency 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 2021	Dec 2020
Income Statement
Total Revenue	2.83B	2.61B	2.61B	2.63B	2.48B	2.10B
Gross Profit	1.30B	1.16B	1.09B	1.13B	1.11B	863.69M
EBITDA	372.11M	384.88M	350.35M	391.18M	320.10M	157.42M
Net Income	217.67M	245.80M	230.99M	245.49M	195.42M	67.92M
Balance Sheet
Total Assets	2.86B	1.65B	1.65B	1.58B	1.53B	1.55B
Cash, Cash Equivalents and Short-Term Investments	82.43M	334.07M	215.05M	59.18M	185.32M	248.14M
Total Debt	1.50B	791.16M	841.68M	851.30M	848.75M	981.21M
Total Liabilities	2.33B	1.25B	1.27B	1.33B	1.38B	1.46B
Stockholders Equity	529.62M	400.06M	371.91M	250.76M	148.14M	84.64M
Cash Flow
Free Cash Flow	225.96M	346.11M	319.17M	55.19M	246.99M	179.58M
Operating Cash Flow	249.43M	368.23M	356.55M	83.58M	283.86M	241.97M
Investing Cash Flow	-895.72M	-22.26M	-39.14M	-30.12M	-39.37M	-49.07M
Financing Cash Flow	472.25M	-240.35M	-155.70M	-170.91M	-304.07M	-57.69M

Kontoor Brands Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 63.84
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KTB, the sentiment is Negative. The current price of 63.84 is below the 20-day moving average (MA) of 70.52, below the 50-day MA of 74.79, and below the 200-day MA of 68.94, indicating a bearish trend. The MACD of -2.63 indicates Positive momentum. The RSI at 31.04 is Neutral, neither overbought nor oversold. The STOCH value of 3.71 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KTB.

Kontoor Brands Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RL	78 Outperform	$22.18B	27.01	34.01%	0.93%	12.32%	29.40%
COLM	69 Neutral	$3.05B	17.04	10.84%	2.14%	2.76%	-7.83%
KTB	66 Neutral	$3.56B	16.47	49.11%	3.27%	9.90%	-12.67%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
VFC	60 Neutral	$7.24B	81.89	6.39%	1.96%	-4.56%	―
HBI	49 Neutral	―	―	140.06%	―	-19.47%	―

Kontoor Brands Corporate Events

Kontoor Brands Increases Quarterly Dividend by 2%

On October 24, 2025, Kontoor Brands announced a 2% increase in its regular quarterly cash dividend, now set at $0.53 per share, payable on December 18, 2025, to shareholders of record by December 8, 2025. This decision reflects the company’s commitment to delivering value to its shareholders and may enhance its attractiveness in the market.

Kontoor Brands Approves Executive Salary and Incentive Increases

On July 29, 2025, Kontoor Brands announced the appointments of Joseph A. Alkire as Executive Vice President, Chief Financial Officer and Global Head of Operations, and Jennifer H. Broyles as Executive Vice President, Chief Commercial Officer and Global Head of Brands. Subsequently, on September 22, 2025, the company’s Talent and Compensation Committee approved salary and incentive increases for both executives, with changes retroactive to August 1, 2025, and long-term incentive adjustments effective in 2026. These changes reflect the company’s strategic focus on strengthening its leadership team to enhance operational efficiency and brand management.