The outlook excludes the estimated $50 million impact from recently enacted tariffs, including those affecting Helly Hansen, Kontoor said in a press release.
The adjusted operating income is forecast between $437 million and $445 million, up 15 to 17 per cent over the prior year, with Helly Hansen contributing roughly $37 million. This includes $9 million in acquisition-related stock-based compensation expense.
The adjusted earnings per share (EPS) are now expected to be in the range of $5.40 to $5.50, reflecting a 10 to 12 per cent increase YoY.
“Our outlook reflects the enhanced growth, earnings and cash flow profile of our portfolio, supported by the significant benefits of project Jeanius and the expected addition of Helly Hansen,” said Scott Baxter, president, chief executive officer (CEO) and chairman of the board of directors at Kontor. “We expect the near-term operating environment to remain volatile and tariff policy changes present a significant headwind to our business. However, with the team and strategy we have in place, we are well-positioned to successfully manage through this environment and emerge stronger.”
Meanwhile, Kontoor reported $623 million revenue in the first quarter (Q1) of 2025 ended March 29, 2025, marking a 1 per cent YoY decline, though results were flat on a constant currency basis.
The global wholesale revenue declined 2 per cent, partially offset by a 5 per cent rise in global direct-to-consumer (DTC) sales.
Region-wise, US revenue remained steady at $493 million, with wholesale down 1 per cent and direct-to-consumer up 11 per cent, driven by a 17 per cent increase in digital channels despite a 4 per cent dip in brick-and-mortar retail.
The international revenue fell 7 per cent (3 per cent in constant currency) to $130 million, with declines across wholesale and DTC segments. Europe dropped 4 per cent, Asia 3 per cent, and non-US Americas 18 per cent.
The Wrangler brand posted a 3 per cent global revenue increase to $420 million, with 3 per cent growth in the US and flat international sales. The Lee brand, as anticipated, saw global revenue fall 9 per cent to $200 million, with declines in both US and international markets.
The gross margin of the company stood at 47.5 per cent, while the adjusted gross margin rose by 200 bps to 47.7 per cent compared to the previous year. The reported operating income was $73 million, and adjusted operating income grew 4 per cent to $96 million, including $8 million in acquisition-related stock-based compensation expense.
The reported EPS were $0.76, while adjusted EPS increased 3 per cent YoY to $1.20, both figures reflecting $0.11 in acquisition-related compensation expense.
“Our strong first quarter results reflect the operational agility that is a cornerstone of our business. We continued to strengthen our brands, drive market share gains, and grow our presence across categories and channels of distribution. The strength of our gross margin drove strong underlying earnings growth, cash generation and further improvement in our returns on capital,” added Baxter.
ALCHEMPro News Desk (SG)
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