Dive Brief:
- Kontoor Brands reported 2024 revenue of $2.61 billion, flat compared to the prior year, according to a news release Tuesday.
- By brand, Wrangler revenue grew 3% to $1.81 billion for the year, while its sister brand Lee decreased by 6% to $791 million.
- For 2025, Kontoor expects revenue in the range of $2.63 billion to $2.69 billion, which would represent an increase of 1% to 3%. Following the results, shares were down 6% in premarket trading.
Dive Insight:
Kontoor confirmed that revenue for Q4 was $699 million, a 4% year-over-year increase. The firm reported this figure last week after announcing its intention to acquire Helly Hansen from Canadian Tire Corporation.
The Helly Hansen deal, which will cost Kontoor about $900 million, is expected to close in Q2. Kontoor expects the brand to generate $680 million in revenue in 2025.
However, the projected results of Helly Hansen were excluded from Kontoor’s 2025 revenue outlook reported Tuesday.
In the release, Kontoor President, CEO and Chairman Scott Baxter called 2024 a “landmark year” for the company and said the fourth quarter results exceeded expectations.
In Q4, the company’s U.S. revenue increased 6% year over year, with wholesale and DTC sales for the region growing by 5% and 11%, respectively. The DTC jump was credited to a large increase in digital sales and a 1% increase in brick-and-mortar sales.
International revenue fell 1% year over year, with wholesale declining 4% while DTC increased 5%.
Wrangler grew 9% in the quarter, seeing gains both in the U.S.and internationally. Meanwhile, Lee fell 6% in the quarter.
Lee U.S. wholesale declined 10%, offsetting an 18% gain in DTC. Internationally, Lee revenue fell 6%.
Q4 also marked the second consecutive quarter of revenue gains for Kontoor, which returned to growth in Q3 after several quarters of declines.
Kontoor has been undergoing a transformation program dubbed Project Jeanius that is expected to generate $100 million in profit improvement and savings. The strategy calls for optimizing its supply chain and reducing its operating capacity.
Last week, Baxter said the acquisition of Helly Hansen fits into the company’s plan of expanding its portfolio to accelerate growth.
