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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.
Revenue by Segment
Revenue by Geographic Location
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.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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