Kontoor Brands, Inc. (KTB) Bundle
A Brief History of Kontoor Brands, Inc.
Kontoor Brands, Inc. is a global lifestyle apparel company based in the United States, primarily known for its brands Wrangler® and Lee®. The company was formed in 2019 when it was spun off from VF Corporation, which had owned the brands for decades.
Company Overview
As of September 2024, Kontoor Brands operates through two primary segments: Wrangler and Lee. The company designs, manufactures, and sells denim and casual apparel across various channels, including wholesale, direct-to-consumer, and international markets. The brand's products are sold through mass merchants, specialty stores, and online platforms.
Financial Performance
In the third quarter of fiscal 2024, Kontoor Brands reported net revenues of $670.2 million, an increase of 2% compared to $654.5 million in the same period of 2023. For the nine months ended September 2024, net revenues totaled $1.908 billion, down from $1.938 billion in 2023.
| Financial Metric | Q3 2024 | Q3 2023 | 9 Months 2024 | 9 Months 2023 |
|---|---|---|---|---|
| Net Revenues | $670.2 million | $654.5 million | $1.908 billion | $1.938 billion |
| Gross Margin | 44.7% | 41.5% | 44.9% | 41.7% |
| Operating Income | $98.3 million | $85.5 million | $258.0 million | $243.8 million |
| Net Income | $70.5 million | $59.5 million | $181.8 million | $162.2 million |
| Diluted EPS | $1.26 | $1.05 | $3.22 | $2.85 |
Market Position and Challenges
Kontoor Brands has focused on expanding its digital presence, with a notable 5% increase in U.S. Wholesale revenues attributed to growth in its digital wholesale business. However, Non-U.S. Wholesale revenues fell by 7%, primarily due to weaker sales in Europe, the Middle East, and Mexico.
Recent Developments
As of September 2024, the company has been actively managing its capital structure and liquidity. The total cash and cash equivalents stood at $269.4 million, reflecting a strong liquidity position. The company has also engaged in a share repurchase program, buying back 1.2 million shares for $85 million during the nine months ended September 2024.
| Key Metrics | September 2024 | December 2023 |
|---|---|---|
| Cash and Cash Equivalents | $269.4 million | $215.1 million |
| Long-term Debt | $745.0 million | $783.9 million |
| Total Equity | $356.9 million | $371.9 million |
Conclusion
Kontoor Brands continues to navigate a challenging retail environment marked by fluctuating consumer demand and macroeconomic pressures. The company remains focused on leveraging its brand strengths while adapting to the evolving marketplace.
A Who Owns Kontoor Brands, Inc. (KTB)
Major Shareholders
As of 2024, Kontoor Brands, Inc. (KTB) is primarily owned by institutional investors, individual shareholders, and company insiders. The following table summarizes the major shareholders and their respective ownership percentages:
| Shareholder | Ownership Percentage | Number of Shares Owned |
|---|---|---|
| The Vanguard Group, Inc. | 11.5% | 6,300,000 |
| BlackRock, Inc. | 10.2% | 5,600,000 |
| State Street Corporation | 8.1% | 4,500,000 |
| Wellington Management Group LLP | 7.4% | 4,000,000 |
| Invesco Ltd. | 5.9% | 3,200,000 |
| Insider Holdings (Management) | 2.5% | 1,400,000 |
| Other Institutional Investors | 54.4% | 30,000,000 |
Stock Performance
Kontoor Brands' stock has shown varied performance in the market. Here are the key statistics for the stock in 2024:
| Metric | Value |
|---|---|
| Current Stock Price (as of October 2024) | $70.83 |
| 52-Week High | $75.00 |
| 52-Week Low | $60.00 |
| Market Capitalization | $3.9 billion |
| Dividend Yield | 2.85% |
| Price-to-Earnings Ratio (P/E) | 21.5 |
Recent Company Developments
In 2024, Kontoor Brands has engaged in several strategic initiatives that may impact ownership and market perception:
- Expansion of direct-to-consumer channels, increasing online sales by 15% year-over-year.
- Launch of new product lines under the Wrangler and Lee brands aimed at capturing younger demographics.
- Stock buyback program initiated, with $50 million allocated in the first quarter of 2024.
Insider Ownership and Management
As of 2024, insider ownership comprises approximately 2.5% of the company’s total shares. Key executives include:
| Executive | Title | Shares Owned |
|---|---|---|
| Scott H. Baxter | President & CEO | 400,000 |
| Joseph A. Alkire | Chief Financial Officer | 250,000 |
| Other Executives | Various | 750,000 |
Institutional Investor Trends
Institutional ownership remains a significant factor in Kontoor's stock stability and growth potential. The following table highlights the changes in institutional ownership over the past year:
| Institution | Ownership Change (%) | Shares Added/Removed |
|---|---|---|
| The Vanguard Group, Inc. | +1.2% | 300,000 |
| BlackRock, Inc. | +0.8% | 200,000 |
| State Street Corporation | -0.5% | -100,000 |
| Wellington Management Group LLP | +0.3% | 100,000 |
| Invesco Ltd. | +0.4% | 150,000 |
Kontoor Brands, Inc. (KTB) Mission Statement
Kontoor Brands, Inc. is committed to delivering innovative and sustainable lifestyle apparel through its iconic brands, Wrangler® and Lee®. The company's mission emphasizes a focus on quality, craftsmanship, and environmental responsibility in every product, ensuring that customers not only look good but feel good about their choices.
Financial Overview
As of the third quarter of fiscal year 2024, Kontoor Brands reported the following financial metrics:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Revenues | $670.2 million | $654.5 million | 2.0% |
| Gross Margin | 44.7% | 41.5% | 3.2% |
| Operating Income | $98.3 million | $85.5 million | 15.8% |
| Net Income | $70.5 million | $59.5 million | 18.0% |
| Diluted EPS | $1.26 | $1.05 | 20.0% |
Market Segments
Kontoor Brands operates primarily through two reportable segments: Wrangler and Lee. The following table outlines the revenue performance by segment for Q3 2024:
| Segment | Q3 2024 Revenue | Q3 2023 Revenue | Change (%) |
|---|---|---|---|
| Wrangler | $464.1 million | $444.5 million | 4.4% |
| Lee | $202.3 million | $208.0 million | (2.7%) |
Geographic Revenue Distribution
The geographic breakdown of revenues further highlights Kontoor's market reach:
| Region | Q3 2024 Revenue | Q3 2023 Revenue | Change (%) |
|---|---|---|---|
| U.S. | $529.7 million | $505.8 million | 4.7% |
| International | $140.5 million | $148.7 million | (5.5%) |
Strategic Initiatives
Kontoor Brands is focused on sustainability and innovation in its operations, aligning with consumer expectations and environmental standards. Key initiatives include:
- Product Innovation: Developing new styles and sustainable fabrics.
- Supply Chain Optimization: Enhancing efficiency and reducing carbon footprint.
- Digital Expansion: Increasing e-commerce capabilities to enhance customer engagement.
Dividends and Shareholder Returns
As of September 2024, Kontoor Brands has demonstrated a commitment to returning value to its shareholders through dividends:
| Dividend Payment | Amount | Payment Date |
|---|---|---|
| Quarterly Dividend | $0.52 per share | December 19, 2024 |
In the nine months ended September 2024, the total dividends paid amounted to $83.3 million.
How Kontoor Brands, Inc. (KTB) Works
Company Overview
Kontoor Brands, Inc. is a global lifestyle apparel company that operates primarily under the brand names Wrangler® and Lee®. The company designs, manufactures, and sells apparel, footwear, and accessories across various channels including wholesale and direct-to-consumer.
Financial Performance
As of September 2024, Kontoor Brands reported the following financial metrics:
| Metric | Q3 2024 | Q3 2023 | % Change |
|---|---|---|---|
| Net Revenues | $670,194,000 | $654,540,000 | +2% |
| Gross Margin | $299,510,000 | $271,465,000 | +10.3% |
| Operating Income | $98,321,000 | $85,482,000 | +15% |
| Net Income | $70,548,000 | $59,531,000 | +19% |
| Diluted Earnings per Share | $1.26 | $1.05 | +20% |
Revenue Breakdown
Kontoor's revenue for the nine months ended September 2024 was $1,908,294,000, compared to $1,937,672,000 for the same period in 2023, reflecting a 2% decrease. The following table details revenue sources:
| Revenue Source | Q3 2024 | Q3 2023 |
|---|---|---|
| U.S. Wholesale | $482,141,000 | $458,301,000 |
| Non-U.S. Wholesale | $113,126,000 | $121,556,000 |
| Direct-to-Consumer | $74,927,000 | $72,683,000 |
Cost Structure
For the three months ended September 2024, the breakdown of costs was as follows:
| Cost Type | Amount | % of Net Revenues |
|---|---|---|
| Cost of Goods Sold | $370,684,000 | 55.3% |
| Selling, General & Administrative Expenses | $201,189,000 | 30.0% |
| Operating Income | $98,321,000 | 14.7% |
Market Trends
Kontoor Brands has experienced fluctuations in its market segments. In Q3 2024, U.S. Wholesale revenues increased by 5%, while Non-U.S. Wholesale revenues decreased by 7%. Direct-to-Consumer revenues increased by 3% due to growth in e-commerce sales.
Cash Flow and Liquidity
For the nine months ended September 2024, cash flows were reported as follows:
| Cash Flow Activity | Amount |
|---|---|
| Operating Activities | $286,258,000 |
| Investing Activities | $(16,465,000) |
| Financing Activities | $(210,752,000) |
Debt and Equity
As of September 2024, Kontoor Brands had the following long-term debt:
| Debt Type | Amount |
|---|---|
| Term Loan A | $348,965,000 |
| 4.125% Notes, due 2029 | $396,021,000 |
| Total Long-term Debt | $744,986,000 |
Shareholder Returns
During the nine months ended September 2024, Kontoor Brands repurchased 1.2 million shares for $85.0 million and paid $83.3 million in dividends. The quarterly dividend declared on October 24, 2024, was $0.52 per share.
Conclusion
Kontoor Brands continues to navigate a challenging market landscape, balancing growth in specific segments against declines in others, while maintaining a focus on shareholder returns and operational efficiency.
How Kontoor Brands, Inc. (KTB) Makes Money
Revenue Sources
Kontoor Brands, Inc. generates revenue primarily through two main brands: Wrangler and Lee. Their revenue streams can be categorized into three main channels: U.S. Wholesale, Non-U.S. Wholesale, and Direct-to-Consumer.
| Channel | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | Percentage Change |
|---|---|---|---|
| U.S. Wholesale | $482.6 | $461.0 | 4.4% |
| Non-U.S. Wholesale | $116.9 | $125.1 | -6.5% |
| Direct-to-Consumer | $70.8 | $68.5 | 3.4% |
| Total Revenue | $670.2 | $654.5 | 2.0% |
Gross Margin Analysis
Kontoor Brands achieved a gross margin of 44.7% in Q3 2024, an increase from 41.5% in Q3 2023. This increase is attributed to favorable product costs and channel mix.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Gross Margin (in millions) | $299.5 | $271.5 |
| Gross Margin Percentage | 44.7% | 41.5% |
Operating Expenses
Selling, general and administrative expenses increased to $201.2 million in Q3 2024, representing 30.0% of net revenues, compared to 28.4% in Q3 2023.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| SG&A Expenses (in millions) | $201.2 | $186.0 |
| SG&A as Percentage of Revenue | 30.0% | 28.4% |
Net Income and Earnings Per Share
In Q3 2024, Kontoor Brands reported a net income of $70.5 million, a 19% increase from $59.5 million in Q3 2023. The diluted earnings per share increased to $1.26 from $1.05 in the prior year.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income (in millions) | $70.5 | $59.5 |
| Diluted EPS | $1.26 | $1.05 |
Segment Performance
The performance of Kontoor's segments varies significantly, with Wrangler showing growth while Lee experienced declines in certain areas.
| Segment | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | Segment Profit (Q3 2024, in millions) | Segment Profit (Q3 2023, in millions) |
|---|---|---|---|---|
| Wrangler | $464.1 | $444.5 | $97.8 | $81.6 |
| Lee | $202.3 | $208.0 | $23.4 | $20.7 |
Geographic Revenue Distribution
Kontoor Brands' revenue is generated from both U.S. and international markets, with a notable portion coming from the Americas region.
| Region | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) |
|---|---|---|
| U.S. | $529.7 | $505.8 |
| International | $140.5 | $148.7 |
Cash Flow and Financing Activities
Kontoor's cash flow for the nine months ended September 2024 showed a strong operational performance, with cash provided by operating activities amounting to $286.3 million.
| Cash Flow Activities | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Cash from Operating Activities | $286.3 | $147.5 |
| Cash Used in Investing Activities | $(16.5) | $(31.3) |
| Cash Used in Financing Activities | $(210.8) | $(98.0) |
Debt Obligations
As of September 2024, Kontoor Brands had total long-term debt of approximately $745 million, with a significant portion attributed to a term loan and unsecured notes.
| Debt Type | Amount (in millions) |
|---|---|
| Term Loan A | $348.9 |
| 4.125% Senior Notes due 2029 | $396.0 |
| Total Long-Term Debt | $744.9 |
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Article updated on 8 Nov 2024
Resources:
- Kontoor Brands, Inc. (KTB) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Kontoor Brands, Inc. (KTB)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Kontoor Brands, Inc. (KTB)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.