Kontoor Brands Q3 Revenue $685 Million: Lee Divestiture Completed, Full-Year EPS Outlook Raised to $5.40
Kontoor Brands, the apparel company headquartered in Greensboro, Guilford County, North Carolina, on November 5 reported results for its third quarter ended October 3, 2026: revenue at both of its brands, Wrangler and Helly Hansen, grew, the divestiture of the Lee denim business was completed, and the company raised its full-year earnings outlook and announced a large buyback program.
Third-quarter revenue from continuing operations was $685 million, up 3% from a year earlier. Wrangler global revenue was $485 million, up 3%, with U.S. revenue up 2% on a 7% increase in direct-to-consumer and international revenue up 6%. Helly Hansen global revenue was $191 million, up 3%, with Sport revenue of $147 million and Workwear revenue of $44 million.
Reported gross margin rose 830 basis points to 48.3%; adjusted gross margin was 48.1%, up 230 basis points. Operating income was $77 million on a reported basis and $101 million on an adjusted basis, up 6%, for an adjusted operating margin of 14.7%. Reported diluted EPS was $(0.62), including a $1.73 non-cash tax charge related to the migration of Helly Hansen intellectual property; adjusted EPS was $1.50, up 40%.
The company completed the divestiture of Lee, receiving $698 million of net proceeds. It expects to enter accelerated share repurchase agreements in early November to repurchase $400 million of common stock, with total planned fourth-quarter repurchases of $450 million under its existing $750 million authorization; about $230 million is expected to remain after completion. The company returned $49 million to shareholders in the quarter, and ended it with $56 million in cash, $1.1 billion in long-term debt and inventory of $570 million, down 6%. The quarterly dividend is $0.54 per share, payable December 18, 2026, to shareholders of record on December 8.
For full-year 2026, the company expects revenue of about $2.68 billion, up about 12%, adjusted EPS of $5.40, up 31% from the prior outlook of $5.25 to $5.35, adjusted operating income of about $400 million and cash from operations of about $325 million. Its initial 2027 outlook calls for adjusted EPS of at least $6.60, growth of more than 20%, and cash from operations of at least $325 million.
Chief Executive Officer Scott Baxter said third-quarter results were driven by growth in both Wrangler and Helly Hansen, strong earnings and gross margin expansion, and that with the Lee divestiture completed and the Helly Hansen integration advancing, Kontoor enters its next chapter as a more focused company anchored around two iconic brands. President and Chief Financial Officer Joe Alkire said the company increased planned share repurchases to $450 million based on confidence in its long-term strategy, and raised the full-year earnings outlook.
Kontoor Brands owns the Wrangler and Helly Hansen brands, the former an American denim and casual apparel brand and the latter a Norwegian outdoor sport and workwear brand. (Source: Kontoor Brands)
Source: Kontoor Brands
Published by GSM · USA (original Chinese edition)
Photo: 图：北卡罗来纳州 Greensboro 市天际线，Kontoor Brands 总部所在地。Mx._Granger 摄，CC0，经 Wikimedia Commons。 / Photo: The Greensboro, North Carolina skyline, home to Kontoor Brands headquarters. By Mx._Granger, CC0, via Wikimedia Commons.
