Loading...
•
Mar 30, 2024
Kontoor Brands Q1 2024 Earnings Report
Kontoor Brands reported stronger-than-expected results, driven by higher revenue, gross margin, and cash flow.
Key Takeaways
Kontoor Brands reported a revenue of $631 million, a 5% decrease compared to the prior year. Adjusted EPS was $1.16, consistent with the prior year. The company is raising its full year earnings outlook due to a strong start to the year and increased visibility into gross margin expansion.
Revenue of $631 million decreased 5 percent compared to prior year.
Reported gross margin was 45.2 percent, with adjusted gross margin increasing 270 basis points to 45.7 percent compared to prior year.
Reported EPS was $1.05, while adjusted EPS of $1.16 was consistent with prior year.
Inventory decreased 24 percent compared to prior year.
Kontoor Brands
Kontoor Brands
Kontoor Brands Revenue by Segment
Kontoor Brands Revenue by Geographic Location
Revenue by Segment
Wrangler Revenue
CapyFin.comLee Revenue
CapyFin.comOther Revenue
CapyFin.comRevenue by Geographic Location
U.S. Revenue
CapyFin.comInternational Revenue
CapyFin.com Forward Guidance
The Company’s updated 2024 outlook includes the following:
Positive Outlook
- Revenue is expected to be in the range of $2.57 to $2.63 billion, reflecting a decrease of 1 percent to an increase of 1 percent compared to the prior year, consistent with the prior outlook.
- Adjusted gross margin is now expected to approximate 44.6 percent, representing an increase of 210 basis points compared to adjusted gross margin in the prior year, excluding the out-of-period duty expense.
- Adjusted operating income is now expected to be in the range of $377 to $387 million, reflecting an increase of between 8 and 11 percent compared to adjusted operating income in the prior year, excluding the out-of-period duty expense.
- Adjusted EPS is now expected to be in the range of $4.70 to $4.80 compared to the prior outlook of $4.65 to $4.75.
- The Company now expects cash flow from operations to exceed $335 million driven by the combination of accelerated earnings growth and a continued normalization of inventory.
Challenges Ahead
- The Company continues to expect first half revenue to decline at a mid-single digit rate compared to the prior year, consistent with the prior outlook.
- Adjusted SG&A is expected to increase at a low- to mid-single digit percentage compared to adjusted SG&A in the prior year, consistent with the prior outlook.
- Full year 2024 EPS includes an approximate 5 percentage point headwind from a higher tax rate.
- In the second quarter, the Company expects adjusted EPS of approximately $0.85.
- The Company’s outlook does not yet reflect the anticipated impact of Project Jeanius.
Revenue & Expenses
Visualization of income flow from segment revenue to net income