Kontoor Brands’ revenue increased 25% in Q2

Global lifestyle apparel company, Kontoor Brands, reported a 25% rise in revenue to $614m (£507m) in the second quarter, largely driven by strength in the US in both its digital and e-commerce channels. wholesale.

The group’s strongest brands, Wrangler and Lee, also reported revenue increases of 19% and 14% respectively in the first half of 2022.

Group revenue for 2022 is now expected to increase by 6% compared to 2021, although this is lower than previous guidance for an increase of approximately 10%. Revenues in the second half of 2022 are also expected to be relatively flat compared to 2021.

The updated outlook is said to exclude an estimated $0.25 (£0.21) EPS charge for restructuring related to actions to increase growth by accelerating the transformation of the company’s global operating model, including the relocation of the European headquarters.

Scott Baxter, president, CEO and chairman of Kontoor Brands, said: “In a highly dynamic macroeconomic environment, supply chain challenges and inflationary pressures accelerated during the quarter. While these factors dampened our top line slightly earlier than expected, we still managed to deliver strong revenue growth of 27% and adjusted earnings growth of 57% on a constant currency basis, in line with our EPS guidance.

“I’m proud of the agility of our teams to navigate rapid change, perform relatively well in our largest market and meet our profitability targets for the second quarter.” Looking ahead, we expect macro conditions to remain challenging, particularly as retailer inventories rebalance and inflation weighs on overall consumer demand.”

He added: “However, we are confident that our strategies, continued brand momentum and efficient operating model will fuel further competitive differentiation over time. Kontoor’s specific drivers of accelerating diversified growth, coupled with our proven strong cash generation, should enable us to continue to deliver industry-leading TSR.”