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Thursday, August 8, 2019

Kontoor (KTB) reported earnings on Thur 8 Aug 2019 (b/o)

Only 14 months after initiating the spinoff, Greensboro-based Kontoor Brands issued its first quarterly report.

  • Revenue was above forecasts, but took a hit from the bankruptcy of Sears and Kmart as well as a stronger dollar.
  • Kontoor Brands has its eye on China as a growth opportunity.
  • While it currently sells its Lee-branded denim in China, Wrangler will enter the country in the first quarter of 2020, when it will be sold on Alibaba.

Denim company Kontoor Brands (NYSE: KTB), which was spun off from VF Corp. in May, reported its second-quarter results before the market opened on Aug. 8. Revenue was hurt by the bankruptcy of Sears Holdings, the exit from an underperforming country in Europe, business model changes in certain markets, and foreign-currency headwinds. But the company still managed to beat analyst expectations by a large margin.

A messy quarter

Kontoor's revenue and earnings were down compared to the prior-year period, but both handily exceeded analyst estimates:
MetricQ2 2019Change (YOY)Compared to Average Analyst Estimate
Revenue$609.7 million(8.2%)Beat by $18.4 million
Non-GAAP earnings per share$0.96(33.8%)Beat by $0.29

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