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Dec 31, 2022
Kontoor Brands Q4 2022 Earnings Report
Kontoor Brands reported strong Q4 2022 results, with revenue and EPS significantly above plan, despite macroeconomic challenges, and provided 2023 outlook.
Key Takeaways
Kontoor Brands reported a 7% increase in revenue to $732 million for Q4 2022. Reported EPS was $0.91, and adjusted EPS was $0.88. The company anticipates macro headwinds to persist through 2023 but expects strategic investments to support continued growth.
Revenue increased by 7 percent (9 percent in constant currency) compared to Q4 2021.
Reported EPS was $0.91 compared to Q4 2021 reported EPS of $0.75; adjusted EPS was $0.88 compared to Q4 2021 adjusted EPS of $0.88.
U.S. revenue increased 16 percent, driven by strength in domestic wholesale and digital channels.
Wrangler brand global revenue increased 15 percent (16 percent in constant currency).
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
Kontoor Brands expects revenue to increase at a low-single digit percentage over 2022, with EPS expected to be in the range of $4.55 to $4.75.
Positive Outlook
- Revenue is expected to increase at a low-single digit percentage over 2022.
- First half growth is expected to be driven by the U.S. with continued momentum in POS, share gains and Digital.
- Gross margin is expected to be in the range of 43.5 percent to 44.0 percent, increasing 40 to 90 basis points compared to gross margin of 43.1 percent in 2022.
- Expected increases from continued structural mix shifts to accretive channels such as Digital and International, lower inflationary pressures on input costs and higher AURs.
- Capital Expenditures are expected to be in the range of $35 million to $40 million, primarily to support growth in owned brick and mortar stores, manufacturing, distribution and IT projects.
Challenges Ahead
- Macro consumer demand conditions to be more challenged in the U.S. during the second half of 2023.
- Softness in China as the region continues to recover from COVID lockdowns and restrictions in the first half.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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