Kontoor Brands Reports Stronger 2026 First Quarter Results and Raises Full Year Outlook; Announces Planned Divestiture of Lee and $750 Million Share Repurchase Program

Published: 2026-05-07 06:51:04 ET KTB

During the first quarter, the Company initiated a competitive process to divest the Lee business. As a result, the Company’s first quarter results and updated 2026 outlook reflect the presentation of the Lee business as discontinued operations. Key Highlights First quarter revenue including the contribution from discontinued operations was $808 million. Revenue from Lee of $195 million now reported in discontinued operations. First quarter revenue from continuing operations of $613 million exceeded expectations driven by 4 percent growth in Wrangler and 16 percent growth in Helly Hansen on a pro-forma basis First quarter reported EPS including the contribution from discontinued operations was $1.65. First quarter adjusted EPS including the contribution from discontinued operations was $1.55. First quarter adjusted EPS from continuing operations was $1.06 Full year revenue outlook including the contribution from discontinued operations is now expected to be in the range of $3.41 to $3.46 billion ($3.40 to $3.45 billion prior). Expected revenue from Lee of approximately $750 million now reported in discontinued operations. Full year revenue outlook from continuing operations is now expected to be in the range of $2.66 to $2.71 billion driven by growth in Wrangler and Helly Hansen Full year adjusted EPS outlook including the contribution from discontinued operations is now expected to be in the range of $6.60 to $6.70 ($6.40 to $6.50 prior) The Company announced plans to divest the Lee business to sharpen strategic focus on its largest growth assets and enhance capital allocation optionality The Company’s Board of Directors approved a new $750 million share repurchase authorization

Published on 05/07/2026 at 06:51 am EDT

Kontoor Brands, Inc. (NYSE: KTB) today reported financial results for its first quarter ended April 4, 2026.

“Our strong first quarter results reflect the power of our operating model combined with strong execution,” said Scott Baxter, President, Chief Executive Officer and Chairman of the Board of Directors. “Wrangler drove another quarter of broad-based growth and market share gains, and Helly Hansen delivered better-than-expected revenue and profitability. Our decision to divest Lee enables sharper focus on the opportunities with greatest potential to maximize shareholder returns as we align the Kontoor brand portfolio to a higher growth profile.”

“Our updated outlook reflects better than expected first quarter results and improving visibility for Wrangler and Helly Hansen,” added Joe Alkire, Kontoor Brands’ Executive Vice President, Chief Financial Officer and Global Head of Operations. “Our planned divestiture of the Lee business is in an advanced state and has attracted interest from multiple parties. We are confident in our ability to successfully complete a transaction this year, resulting in significantly more capital allocation optionality and accelerated growth as we drive enhanced shareholder returns into 2027 and beyond.”

Planned Divestiture of the Lee Business

During the first quarter of 2026, the Company initiated a competitive process to divest the Lee business. The process has attracted interest from multiple parties and the Company anticipates entering into a definitive agreement to divest the Lee business in 2026. As a result, the Company has reported the results of the Lee business in discontinued operations.

The Company expects the divestiture of Lee to be immaterial to earnings per share over a 12-to-18-month period. The earnings contribution of the Lee business will be offset through strong capital deployment and mitigation of overhead and other expenses through restructuring and other mitigating cost actions to offset the costs that were previously allocated to the Lee business.

First Quarter 2026 Income Statement from Continuing Operations Review

Revenue from continuing operations was $613 million and increased 45 percent compared to prior year, including the contribution from the acquisition of Helly Hansen completed in the second quarter of 2025.

Wrangler brand global revenue was $436 million and increased 4 percent compared to prior year. Wrangler U.S. revenue increased 1 percent, driven by a 6 percent increase in direct-to-consumer and a 1 percent increase in wholesale. Wrangler international revenue increased 20 percent compared to prior year, driven by a 38 percent increase in direct-to-consumer and a 17 percent increase in wholesale.

Helly Hansen global revenue was $176 million. Sport and Workwear revenue was $120 million and $45 million, respectively. Musto brand revenue was $11 million.

Gross margin from continuing operations on a reported basis increased 810 basis points to 53.7 percent. On an adjusted basis, gross margin from continuing operations increased 470 basis points to 50.6 percent compared to prior year, driven by the impact of Helly Hansen, the benefits of Project Jeanius and channel mix, partially offset by increased product costs, net of pricing actions. Adjusted gross margin includes $1 million of overhead and other expenses that were previously allocated to the Lee business.

Selling, General & Administrative (SG&A) expenses from continuing operations were $239 million, or 39.0 percent of revenue on a reported basis. On an adjusted basis, SG&A expenses from continuing operations were $224 million, or 36.5 percent of revenue. The increase in SG&A expenses was driven by the impact of Helly Hansen, higher demand creation and direct-to-consumer investments and volume-based variable expenses, partially offset by the benefits from Project Jeanius. Adjusted SG&A expenses include $7 million of overhead and other expenses that were previously allocated to the Lee business.

Operating income from continuing operations was $90 million on a reported basis. On an adjusted basis, operating income from continuing operations was $87 million and increased 60 percent compared to prior year. Operating income includes $8 million of overhead and other expenses that were previously allocated to the Lee business.

Earnings per share (EPS) from continuing operations was $1.09 on a reported basis. On an adjusted basis, EPS from continuing operations was $1.06, including a $0.26 contribution from Helly Hansen. Adjusted EPS includes $0.11 of overhead and other expenses that were previously allocated to the Lee business.

Balance Sheet and Liquidity from Continuing Operations Review

The Company ended the first quarter with $56 million in cash and cash equivalents, and $1.14 billion in long-term debt. At the end of the first quarter, the Company had no outstanding borrowings under the Revolving Credit Facility and $493 million available for borrowing against this facility.

Inventory at the end of the first quarter was $464 million, including the contribution of inventory from Helly Hansen.

As previously announced, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.53 per share, payable on June 18, 2026, to shareholders of record at the close of business on June 8, 2026.

The Company returned $54 million to shareholders through dividends and share repurchases during the first quarter, including the repurchase of $25 million of common stock.

Share Repurchase Authorization

The Company’s Board of Directors has authorized a share repurchase program of up to $750 million of the Company’s common stock. The new repurchase authorization replaces the existing share repurchase program announced on December 11, 2023.

“Our $750 million share repurchase program reflects the confidence we have in our business moving forward and the opportunities to generate significant value from our sharper brand portfolio,” said Scott Baxter, President, Chief Executive Officer and Chairman of Kontoor Brands. “We remain committed to returning cash to shareholders while maintaining an unrelenting focus on delivering superior total shareholder return over time.”

The timing and amount of repurchases will be determined by the Company based on its evaluation of market conditions, continued compliance with its debt covenants and other factors. The program does not have an expiration date but may be suspended, modified or terminated at any time without prior notice. The Company expects to fund repurchases through cash flow generated from operations and expected proceeds from the planned divestiture of the Lee brand.

Tariff Update

Following the U.S. Supreme Court’s decision that the International Emergency Economic Powers Act (“IEEPA”) does not authorize tariffs, the U.S. Court of International Trade has ordered U.S. Customs and Border Protection to refund IEEPA duties.

The Company believes it is probable that it will recover the IEEPA tariffs previously paid and therefore has recognized a net receivable of $54 million as of March 2026. As a result, during the first quarter of 2026, the Company reduced cost of goods sold by approximately $49 million on a reported basis, representing the reversal of expense for IEEPA tariffs on inventory previously sold. Of the $49 million reduction in cost of goods sold, $29 million was related to tariffs expensed in 2025. On an adjusted basis, the Company has excluded the impact of the reversal of expense for 2025-related IEEPA tariffs on first quarter results and in the updated 2026 outlook.

The Company’s outlook assumes a 15 percent reciprocal tariff rate on applicable inventory receipts for the remainder of 2026. For applicable inventory receipts effective February 24, 2026, a 10 percent reciprocal tariff rate applied, which remains in effect. Applicable inventory owned prior to February 24, 2026 is exempt from reciprocal tariffs. The Company’s updated outlook includes the impact from increases in tariffs on all countries from which the Company sources product, with the exception of Mexico. Based on currently available information, the Company’s imports from Mexico to the U.S. remain exempt under USMCA.

The Company is evaluating the impact of the United States and Bangladesh reciprocal trade framework. The Company utilizes U.S. grown cotton in more than 80 percent of products sourced from Bangladesh which may qualify for a duty exemption under the trade framework.

Updated Full Year 2026 Outlook from Continuing Operations

The Company’s updated full year 2026 outlook reflects the impact of the planned divestiture of the Lee business, which is now reported in discontinued operations.

Adjusted EPS from continuing operations is expected to be in the range of $5.15 to $5.25, including the impact of approximately $0.55 of unmitigated overhead and other expenses that were previously allocated to the Lee business.

The Company expects the divestiture of Lee to be immaterial to earnings per share over a 12-to-18-month period. The earnings contribution of the Lee business will be offset through strong capital deployment and mitigation of overhead and other expenses, through restructuring and other mitigating cost actions to offset the costs that were previously allocated to the Lee business.

Prior 2026 Outlook

Updated 2026 Outlook

Revenue including discontinued operations

$3.40 to $3.45 billion

$3.41 to $3.46 billion

Lee revenue reported in discontinued operations

$0.75 billion

Revenue from continuing operations

$2.65 to $2.70 billion

$2.66 to $2.71 billion

Adjusted EPS including discontinued operations

$6.40 to $6.50

$6.60 to $6.70

Less: EPS of discontinued operations before reclass of allocated expenses

$0.90

Adjusted EPS from continuing operations before reclass of allocated expenses

$5.70 to $5.80

Less: EPS impact of reclass of allocated expenses

$0.55

Adjusted EPS from continuing operations

$5.15 to $5.25

The Company’s full year 2026 outlook from continuing operations also includes the following assumptions.

Webcast Information

Kontoor Brands will host its first quarter 2026 conference call beginning at 8:30 a.m. Eastern Time today, May 7, 2026. The conference will be broadcast live via the Internet, accessible at https://www.kontoorbrands.com/investors. For those unable to listen to the live broadcast, an archived version will be available at the same location.

Non-GAAP Financial Measures

This release refers to “adjusted”, “organic” and “constant currency” amounts from 2026 and 2025, which are further described in the sections below. All per share amounts are presented on a diluted basis. Amounts as presented herein may not recalculate due to the use of unrounded numbers.

Adjusted Amounts - This release refers to “adjusted” amounts. Adjustments during 2026 represent (i) business optimization activities associated with the continued execution of Project Jeanius, (ii) acquisition and integration-related costs associated with the Helly Hansen acquisition and, (iii) excluding the impact of the reversal of expense for 2025 IEEPA-related tariffs on first quarter of 2026 results. Adjustments during 2025 represent (i) restructuring and transformation costs related to business optimization activities associated with Project Jeanius, (ii) actions to streamline and transfer select production within our internal manufacturing network and, (iii) acquisition and integration-related costs associated with the Helly Hansen acquisition. Additional information regarding adjusted amounts is provided in notes to the supplemental financial information included with this release.

Organic Amounts - This release refers to “organic” amounts, which represent operating results excluding contributions from the Helly Hansen® and Musto® brands.

Constant Currency - This release refers to “reported” amounts in accordance with GAAP, which include translation and transactional impacts from changes in foreign currency exchange rates. This release also refers to “constant currency” amounts, which exclude the translation impact of changes in foreign currency exchange rates.

Reconciliations of these non-GAAP measures to the most comparable GAAP measures are presented in the supplemental financial information included with this release that identifies and quantifies all reconciling adjustments and provides management's view of why this non-GAAP information is useful to investors. While management believes that these non-GAAP measures are useful in evaluating the business, this information should be viewed in addition to, and not as an alternate for, reported results under GAAP. The non-GAAP measures used by the Company in this release may be different from similarly titled measures used by other companies.

For forward-looking non-GAAP measures included in this filing, the Company does not provide a reconciliation to the most comparable GAAP financial measures because the information needed to reconcile these measures is unavailable due to the inherent difficulty of forecasting the timing and/or amount of various items that have not yet occurred and have been excluded from adjusted measures. Additionally, estimating such GAAP measures and providing a meaningful reconciliation consistent with the Company’s accounting policies for future periods requires a level of precision that is unavailable for these future periods and cannot be accomplished without unreasonable effort.

About Kontoor Brands

Kontoor Brands, Inc. (NYSE: KTB) is a portfolio of three of the world’s most iconic lifestyle, outdoor and workwear brands: Wrangler®, Lee® and Helly Hansen®. Kontoor Brands is a purpose-led organization focused on leveraging its global platform, strategic sourcing model and best-in-class supply chain to drive brand growth and deliver long-term value for its stakeholders. For more information about Kontoor Brands, please visit www.KontoorBrands.com.

Forward-Looking Statements

Certain statements included in this release and attachments are "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements are made based on our expectations and beliefs concerning future events impacting the Company and therefore involve several risks and uncertainties. You can identify these statements by the fact that they use words such as “will,” “anticipate,” “estimate,” “expect,” “should,” “may” and other words and terms of similar meaning or use of future dates. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. We do not intend to update any of these forward-looking statements or publicly announce the results of any revisions to these forward-looking statements, other than as required under the U.S. federal securities laws. Potential risks and uncertainties that could cause the actual results of operations or financial condition of the Company to differ materially from those expressed or implied by forward-looking statements in this release include, but are not limited to: macroeconomic conditions, including inconsistent consumer demand despite recent declines in interest rates, fluctuating foreign currency exchange rates, moderating inflation and global supply chain issues, as well as the ongoing impact of tariffs and uncertainty regarding the outcome of trade negotiations, import/export regulations and tariff policies, continue to adversely impact global economic conditions and have had, and may continue to have, a negative impact on the Company's business, results of operations, financial condition and cash flows (including future uncertain impacts); the level of consumer demand for apparel; reliance on a small number of large customers; potential difficulty in integrating Helly Hansen and/or in achieving the expected growth, cost savings and/or synergies from the acquisition; potential risks and uncertainties in completing the sale of the Lee business, if at all, and potential risks in segregating and disposing of the Lee business and the Company’s ability to mitigate any stranded costs from the potential disposition; supply chain and shipping disruptions, which could continue to result in shipping delays, an increase in transportation costs and increased product costs or lost sales; intense industry competition; the ability to accurately forecast demand for products; the Company’s ability to gauge consumer preferences and product trends, and to respond to constantly changing markets; the Company’s ability to maintain the images of its brands; disruption and volatility in the global capital and credit markets and its impact on the Company's ability to obtain short-term or long-term financing on favorable terms; the Company maintaining satisfactory credit ratings; restrictions on the Company’s business relating to its debt obligations; increasing pressure on margins; e-commerce operations through the Company’s direct-to-consumer business; the financial difficulty experienced by the retail industry; possible goodwill and other asset impairment; the ability to implement the Company’s business strategy; the stability of manufacturing facilities and foreign suppliers; fluctuations in wage rates and the price, availability and quality of raw materials and contracted products, including as a result of tariffs and reciprocal tariffs; the reliance on a limited number of suppliers for raw material sourcing and the ability to obtain raw materials on a timely basis or in sufficient quantity or quality; disruption to distribution systems; seasonality; unseasonal or severe weather conditions; potential challenges with the Company’s implementation of Project Jeanius; the Company's and its vendors’ ability to maintain the strength and security of information technology systems; the risk that facilities and systems and those of third-party service providers may be vulnerable to and unable to anticipate or detect data security breaches and data or financial loss or maintain operational performance; ability to properly collect, use, manage and secure consumer and employee data; legal, regulatory, political and economic risks; the impact of climate change and related legislative and regulatory responses; stakeholder response to sustainability issues, including those related to climate change; compliance with anti-bribery, anti-corruption and anti-money laundering laws by the Company and third-party suppliers and manufacturers; changes in tax laws and liabilities; the costs of compliance with or the violation of national, state and local laws and regulations for environmental, consumer protection, employment, privacy, safety and other matters; continuity of members of management; labor relations; the ability to protect trademarks and other intellectual property rights; the ability of the Company’s licensees to generate expected sales and maintain the value of the Company’s brands; volatility in the price and trading volume of the Company’s common stock; anti-takeover provisions in the Company’s organizational documents; and fluctuations in the amount and frequency of our share repurchases. Many of the foregoing risks and uncertainties will be exacerbated by any worsening of the global business and economic environment.

More information on potential factors that could affect the Company's financial results are described in detail in the Company’s most recent Annual Report on Form 10-K and in other reports and statements that the Company files with the SEC.

KONTOOR BRANDS, INC.

Condensed Consolidated Statements of Operations

(Unaudited)

Three Months Ended March

(Dollars and shares in thousands, except per share amounts)

2026

2025

Change

Net revenues

613,322

423,001

45%

Costs and operating expenses

Cost of goods sold

283,948

230,267

23%

Selling, general and administrative expenses

239,269

161,365

48%

Total costs and operating expenses

523,217

391,632

34%

Operating income

90,105

31,369

187%

Interest expense

(16,084

)

(9,808

)

64%

Interest income

2,184

3,319

(34)%

Other expense, net

(2,602

)

(10,293

)

(75)%

Income from continuing operations before income taxes

73,603

14,587

405%

Income taxes

(17,964

)

(4,338

)

314%

Income from equity method investment

5,399

—

Income from continuing operations

61,038

10,249

496%

Income from discontinued operations, net of tax

31,401

32,633

(4)%

Net income

92,439

42,882

116%

Earnings per common share - basic

Continuing operations

1.10

0.18

Discontinued operations

0.57

0.59

Total earnings per common share - basic

1.67

0.77

Earnings per common share - diluted

Continuing operations

1.09

0.18

Discontinued operations

0.56

0.58

Total earnings per common share - diluted

1.65

0.76

Weighted average shares outstanding

Basic

55,222

55,355

Diluted

55,996

56,059

* Calculation not meaningful.

Basis of presentation for all financial tables within this release: The Company operates and reports using a 52/53-week fiscal year ending on the Saturday closest to December 31 each year. For presentation purposes herein, all references to periods ended March 2026 and March 2025 correspond to the 13-week fiscal periods ended April 4, 2026 and March 29, 2025, respectively. References to March 2026, December 2025 and March 2025 relate to the balance sheets as of April 4, 2026, January 3, 2026 and March 29, 2025, respectively. Amounts herein may not recalculate due to the use of unrounded numbers.

KONTOOR BRANDS, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands)

March 2026

December 2025

March 2025

ASSETS

Current assets

Cash and cash equivalents

56,411

77,215

320,790

Accounts receivable, net

244,996

209,419

131,958

Inventories

463,501

435,945

298,810

Prepaid expenses and other current assets

99,156

102,056

57,371

Current assets of discontinued operations

259,335

256,481

278,849

Total current assets

1,123,399

1,081,116

1,087,778

Property, plant and equipment, net

112,657

113,285

82,955

Operating lease assets

124,193

110,330

18,931

Intangible assets, net

450,206

445,584

6,791

Goodwill

459,211

451,006

129,034

Other assets

215,292

212,294

176,045

Other assets of discontinued operations

165,117

169,057

174,145

TOTAL ASSETS

2,650,075

2,582,672

1,675,679

LIABILITIES AND EQUITY

Current liabilities

Current portion of long-term debt

13,125

8,750

—

Accounts payable

240,111

195,560

161,240

Accrued and other current liabilities

192,209

237,864

112,481

Operating lease liabilities, current

29,763

22,418

10,328

Current liabilities of discontinued operations

125,808

129,035

107,091

Total current liabilities

601,016

593,627

391,140

Operating lease liabilities, noncurrent

101,865

95,422

10,464

Other liabilities

168,091

164,431

77,484

Long-term debt

1,130,622

1,134,579

735,640

Other liabilities of discontinued operations

29,612

29,746

34,279

Total liabilities

2,031,206

2,017,805

1,249,007

Commitments and contingencies

Total equity

618,869

564,867

426,672

TOTAL LIABILITIES AND EQUITY

2,650,075

2,582,672

1,675,679

KONTOOR BRANDS, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

Three Months Ended March

2026

2025

OPERATING ACTIVITIES

92,439

42,882

Adjustments to reconcile net income to cash provided by operating activities:

Depreciation and amortization

15,338

9,637

Stock-based compensation

6,571

14,462

Other, including working capital changes

(68,087

)

10,644

Cash provided by operating activities

46,261

77,625

INVESTING ACTIVITIES

Property, plant and equipment expenditures

(5,963

)

(2,732

)

Capitalized computer software

(2,383

)

(1,503

)

Proceeds from sale of assets

7,242

—

Proceeds from deferred purchase price settlements

5,601

—

Other

(592

)

(527

)

Cash provided (used) by investing activities

3,905

(4,762

)

FINANCING ACTIVITIES

Borrowings under revolving credit facility

22,500

—

Repayments under revolving credit facility

(22,500

)

—

Repayments of term loan

—

(5,000

)

Repurchases of Common Stock

(25,000

)

—

Dividends paid

(29,339

)

(28,824

)

Shares withheld for taxes, net of proceeds from issuance of Common Stock

(15,154

)

(4,052

)

Cash used by financing activities

(69,493

)

(37,876

)

Effect of foreign currency rate changes on cash and cash equivalents

(2,009

)

(12,343

)

Net change in cash and cash equivalents

(21,336

)

22,644

Cash and cash equivalents – beginning of period

108,442

334,066

Cash and cash equivalents – end of period

87,106

356,710

KONTOOR BRANDS, INC.

Supplemental Financial Information

Business Segment Information

(Unaudited)

Three Months Ended March

% Change Constant Currency (a)

(Dollars in thousands)

2026

2025

% Change

Segment revenues:

Wrangler

435,839

420,246

Helly Hansen

165,480

—

Total reportable segment revenues

601,319

420,246

43%

37%

Other revenues (b)

12,003

2,755

336%

289%

Total net revenues

613,322

423,001

45%

39%

Segment profit

Wrangler

121,769

86,848

40%

Helly Hansen

19,653

—

Reconciliation to income before income taxes:

Corporate and other expenses

(53,704

)

(65,555

)

(18)%

Interest expense

(16,084

)

(9,808

)

64%

Interest income

2,184

3,319

(37)%

Loss related to other revenues (b)

(215

)

(217

)

Income from continuing operations before income taxes

73,603

14,587

405%

(a) Refer to constant currency definition on the following pages.

(b) We report an “Other” category to reconcile segment revenues to total net revenues and segment profit to income before income taxes, but the Other category does not meet the criteria to be considered a reportable segment. Other includes sales and licensing of the Musto® and Chic® brands, as well as other company-owned brands and private label apparel, and the associated costs.

* Calculation not meaningful.

KONTOOR BRANDS, INC.

Supplemental Financial Information

Business Segment Information – Continuing Operations - Constant Currency Basis (Non-GAAP)

(Unaudited)

Three Months Ended March 2026

(In thousands)

As Reported under GAAP

Adjust for Foreign Currency Exchange

Constant Currency

Segment revenues:

Wrangler

435,839

(5,443

)

430,396

Helly Hansen

165,480

(20,417

)

145,063

Total reportable segment revenues

601,319

(25,860

)

575,459

Other revenues

12,003

(1,278

)

10,725

Total net revenues

613,322

(27,138

)

586,184

Constant Currency Financial Information

The Company is a global company that reports financial information in U.S. dollars in accordance with GAAP. Foreign currency exchange rate fluctuations affect the amounts reported by the Company from translating its foreign revenues and expenses into U.S. dollars. These rate fluctuations can have a significant effect on reported operating results. As a supplement to our reported operating results, we present constant currency financial information, which is a non-GAAP financial measure that excludes the impact of translating foreign currencies into U.S. dollars. We use constant currency information to provide a framework to assess how our business performed excluding the effects of changes in the rates used to calculate foreign currency translation. Management believes this information is useful to investors to facilitate comparison of operating results and better identify trends in our businesses.

To calculate foreign currency translation on a constant currency basis, operating results for the current year period for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the average exchange rates in effect during the comparable period of the prior year (rather than the actual exchange rates in effect during the current year period).

These constant currency performance measures should be viewed in addition to, and not as an alternative for, reported results under GAAP. The constant currency information presented may not be comparable to similarly titled measures reported by other companies.

KONTOOR BRANDS, INC.

Supplemental Financial Information

Reconciliation of Adjusted Financial Measures - Quarter-to-Date (Non-GAAP)

(Unaudited)

Three Months Ended March

(Dollars in thousands, except per share amounts)

2026

2025

Net revenues - as reported under GAAP

613,322

423,001

Contribution from Helly Hansen (a)

176,010

—

Organic net revenues

437,312

423,001

Cost of goods sold - as reported under GAAP

283,948

230,267

Restructuring and transformation costs (b)

(2,828

)

(1,348

)

U.S. Customs 2025 tariffs (c)

21,696

—

Adjusted cost of goods sold

302,816

228,919

Contribution from Helly Hansen (a)

77,951

—

Adjusted organic cost of goods sold

224,865

228,919

Selling, general and administrative expenses - as reported under GAAP

239,269

161,365

Restructuring and transformation costs (b)

(2,858

)

(11,156

)

Acquisition and integration-related costs (d)

(12,708

)

(10,326

)

Adjusted selling, general and administrative expenses

223,703

139,883

Contribution from Helly Hansen (a)

79,033

—

Adjusted organic selling, general and administrative expenses

144,670

139,883

Other expense, net - as reported under GAAP

(2,602

)

(10,293

)

Acquisition and integration-related costs (d)

8,865

Adjusted other expense, net

(2,542

)

(1,428

)

Diluted earnings per share from continuing operations - as reported under GAAP

1.09

0.18

Restructuring and transformation costs (b)

0.05

0.18

U.S. Customs 2025 tariffs (c)

(0.20

)

—

Acquisition and integration-related costs (d)

0.12

0.26

Adjusted diluted earnings per share from continuing operations

1.06

0.62

Contribution from Helly Hansen (a)

0.26

—

Adjusted organic diluted earnings per share from continuing operations

0.80

0.62

Adjusted diluted earnings per share from continuing operations

1.06

0.62

Adjusted contribution from discontinued operations

0.49

0.58

Adjusted diluted earnings per share

1.55

1.20

Net income from continuing operations - as reported under GAAP

61,038

10,249

Income taxes

17,964

4,338

Interest expense

16,084

9,808

Interest income

(2,184

)

(3,319

)

EBIT from continuing operations

92,902

21,076

Depreciation and amortization

13,752

7,349

EBITDA from continuing operations

106,654

28,425

Restructuring and transformation costs (b)

5,686

12,504

U.S. Customs 2025 tariffs (c)

(21,696

)

—

Acquisition and integration-related costs (d)

12,768

19,191

Adjusted EBITDA from continuing operations

103,412

60,120

As a percentage of total net revenues

16.9

14.2

Non-GAAP Financial Information: The financial information above has been presented on a GAAP basis, on an adjusted basis and on an adjusted organic basis, which excludes the operating results from the Helly Hansen acquisition. EBIT, EBITDA and adjusted presentations are non-GAAP measures. See “Notes to Supplemental Financial Information - Reconciliation of Adjusted and Adjusted Organic Financial Measures” at the end of this document. Amounts herein may not recalculate due to the use of unrounded numbers.

(a) Contribution from Helly Hansen represents the adjusted operating results from the Helly Hansen® and Musto® brands.

(b) See Note 1 of “Notes to Supplemental Financial Information - Reconciliation of Adjusted and Adjusted Organic Financial Measures” at the end of this document.

(c) See Note 2 of “Notes to Supplemental Financial Information - Reconciliation of Adjusted and Adjusted Organic Financial Measures” at the end of this document.

(d) See Note 3 of “Notes to Supplemental Financial Information - Reconciliation of Adjusted and Adjusted Organic Financial Measures” at the end of this document.

KONTOOR BRANDS, INC.

Supplemental Financial Information

Summary of Select GAAP and Non-GAAP Measures

(Unaudited)

Three Months Ended March

2026

2025

(Dollars in thousands, except per share amounts)

GAAP

Adjusted

Adjusted Organic

GAAP

Adjusted

Net revenues

613,322

437,312

423,001

Gross margin

329,374

310,506

212,447

192,734

194,082

As a percentage of total net revenues

53.7

50.6

48.6

45.6

45.9

Selling, general and administrative expenses

239,269

223,703

144,670

161,365

139,883

As a percentage of total net revenues

39.0

36.5

33.1

38.1

33.1

Operating income from continuing operations

90,105

86,803

67,777

31,369

54,199

As a percentage of total net revenues

14.7

14.2

15.5

7.4

12.8

Diluted earnings per share from continuing operations

1.09

1.06

0.80

0.18

0.62

Non-GAAP Financial Information: The financial information above has been presented on a GAAP basis, on an adjusted basis and on an adjusted organic basis, which excludes the operating results from the Helly Hansen acquisition. These adjusted and adjusted organic presentations are non-GAAP measures. See “Notes to Supplemental Financial Information - Reconciliation of Adjusted and Adjusted Organic Financial Measures” at the end of this document.

KONTOOR BRANDS, INC.

Supplemental Financial Information

Disaggregation of Revenue - Continuing Operations

(Unaudited)

Three Months Ended March 2026

Revenues - As Reported

(In thousands)

Wrangler

Helly Hansen

Other

Total

Channel revenues

U.S. Wholesale

339,098

16,840

1,605

357,543

International Wholesale

52,843

100,972

8,265

162,080

Direct-to-Consumer

43,898

47,668

2,133

93,699

Total

435,839

165,480

12,003

613,322

Geographic revenues

U.S.

373,749

36,154

1,876

411,779

International

62,090

129,326

10,127

201,543

Total

435,839

165,480

12,003

613,322

Three Months Ended March 2025

Revenues - As Reported

(In thousands)

Wrangler

Helly Hansen

Other

Total

Channel revenues

U.S. Wholesale

335,504

—

2,609

338,113

International Wholesale

45,225

—

45,225

Direct-to-Consumer

39,517

—

146

39,663

Total

420,246

—

2,755

423,001

Geographic revenues

U.S.

368,302

—

2,755

371,057

International

51,944

—

51,944

Total

420,246

—

2,755

423,001

KONTOOR BRANDS, INC.

Supplemental Financial Information

Summary of Select Revenue Information - Continuing Operations

(Unaudited)

Three Months Ended March

2026

2025

2026 to 2025

(Dollars in thousands)

As Reported under GAAP

% Change Reported

% Change Constant Currency

Wrangler U.S.

373,749

368,302

Helly Hansen U.S.

36,154

—

Other U.S.

1,876

2,755

(32)%

Total U.S. revenues

411,779

371,057

11%

Wrangler International

62,090

51,944

20%

Helly Hansen International

129,326

—

Other International

10,127

—

Total International revenues

201,543

51,944

288%

236%

Global Wrangler

435,839

420,246

Global Helly Hansen

165,480

—

Global Other

12,003

2,755

336%

289%

Total revenues

613,322

423,001

45%

39%

KONTOOR BRANDS, INC.

Supplemental Financial Information

Revenue from Continuing and Discontinued Operations

(Unaudited)

Three Months Ended March

2026

2025

(Dollars in thousands)

Revenue - continuing operations

613,322

423,001

Revenue - discontinued operations

194,288

199,900

Total

807,610

622,901

KONTOOR BRANDS, INC.

Supplemental Financial Information

Reconciliation of Adjusted and Adjusted Organic Financial Measures - Notes (Non-GAAP)

(Unaudited)

Notes to Supplemental Financial Information - Reconciliation of Adjusted and Adjusted Organic Financial Measures

Management uses non-GAAP financial measures internally in its budgeting and review process and, in some cases, as a factor in determining compensation. In addition, adjusted EBITDA is a key financial measure for the Company's shareholders and financial leaders, as the Company's debt financing agreements require the measurement of adjusted EBITDA, along with other measures, in connection with the Company's compliance with debt covenants. While management believes that these non-GAAP measures are useful in evaluating the business, this information should be considered supplemental in nature and should be viewed in addition to, and not as an alternate for, reported results under GAAP. In addition, these non-GAAP measures may be different from similarly titled measures used by other companies.

(1) During the three months ended March 2026, restructuring and transformation costs included $2.8 million related to the closure of a portion of our manufacturing facilities which was recorded to "cost of goods sold", and $2.9 million related to business optimization activities associated with Project Jeanius recorded to "selling, general and administrative expenses." Total restructuring and transformation costs resulted in a corresponding tax impact of $1.3 million for the three months ended March 2026.

During the three months ended March 2025, restructuring and transformation costs included $11.6 million related to business optimization activities and $0.9 million related to streamlining and transferring select production within our internal manufacturing network. Total restructuring and transformation costs resulted in a corresponding tax impact of $2.9 million for the three months ended March 2025.

(2) In February 2026, the U.S. Supreme Court issued a ruling that tariffs imposed under the International Emergency Economic Powers Act ("IEEPA") on goods imported into the United States were unauthorized, effectively invalidating IEEPA-based tariffs that had been in effect since the second quarter of 2025. We concluded it is probable that we will recover the IEEPA tariffs previously paid and therefore have recognized a net receivable of $53.7 million as of March 2026. As a result, during the three months ended March 2026, we reduced cost of goods sold by approximately $49.0 million, representing the expense for IEEPA tariffs on inventory previously sold to customers since the time the tariffs were enacted in the second quarter of 2025. Additionally, we reduced inventory by $4.7 million for tariffs that were remaining in inventory costs. The expected refund amount of $21.7 million associated with IEEPA tariffs previously expensed in 2025 has been adjusted from the three months ended March 2026 results, and resulted in a corresponding tax impact of $5.1 million.

(3) During the three months ended March 2026, integration-related costs associated with Helly Hansen included $12.8 million of professional and other fees. Integration-related costs resulted in a corresponding tax impact of $3.0 million for the three months ended March 2026.

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