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Oct 02, 2021
Kontoor Brands Q3 2021 Earnings Report
Reported strong Q3 2021 results, driven by broad-based strength across segments, channels, and regions, and raised fiscal year guidance.
Key Takeaways
Kontoor Brands reported a strong third quarter with revenue increasing to $652 million, a 12% increase compared to the prior year. The company raised its fiscal year 2021 outlook, expecting adjusted EPS to be $4.15 to $4.20.
Q3 Reported EPS of $1.07; Adjusted EPS of $1.28
Q3 Reported Revenue of $652 million increased 12 percent compared to the prior year
Q3 Reported Gross Margin of 44.4 percent increased 20 basis points compared to the prior year; Q3 Adjusted Gross Margin of 44.1 percent increased 80 basis points compared to the prior year
Fiscal 2021 guidance raised; Adjusted EPS is now expected to be $4.15 to $4.20, up from the prior range of $3.90 to $4.00
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
The Company is raising its fiscal 2021 Outlook. While the impacts from the COVID-19 pandemic and macroeconomic factors remain uncertain, the Company is updating its fiscal 2021 guidance.
Positive Outlook
- Revenue is now expected to increase at a high-teens percentage over 2020, to $2.47 billion to $2.48 billion, as compared to a mid-teens percentage in the prior guidance, including a mid-single digit adverse impact from the VF Outlet actions and India business model change.
- Adjusted gross margin is now expected to increase at the high end of the prior guidance range of 44.5 percent to 45.0 percent of revenue, compared to 41.2 percent achieved in 2020. The increase is expected to be driven by growth in more accretive channels such as Digital and International, somewhat tempered by higher transitory air freight expenses in support of strong demand.
- SG&A investments will continue to be made in brands and capabilities.
- Adjusted EPS is now expected to be in the range of $4.15 to $4.20, as compared to $3.90 to $4.00 in the prior guidance, driven by operational performance.
- For 2021, an effective tax rate of approximately 21 percent is expected, compared to 22 percent in the prior guidance.
Challenges Ahead
- While the impacts from the COVID-19 pandemic and macroeconomic factors remain uncertain
Historical Earnings Impact
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Avg. Return Before/After Earnings
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