Kontoor Brands 4Q adj gross margin 46.8%, est. 45.8%

Kontoor Brands 4Q adj gross margin 46.8%, est. 45.8%

Kontoor Brands Reports Strong 4Q 2024 Adjusted Gross Margin Amid Revenue Growth

Kontoor Brands, Inc. (KTB) reported preliminary fourth-quarter 2024 results, highlighting an adjusted gross margin of 44.7%, a 160-basis-point increase compared to the prior year, driven by operational efficiencies and strategic cost management. Total revenues for the quarter reached $699 million, reflecting a 4% year-over-year rise, with adjusted gross profit climbing to $313 million from $283 million in 2023.

The margin expansion exceeded expectations outlined in earlier guidance, though the company had previously attributed part of its cost discipline to initiatives under Project Jeanius, which aims to unlock $100 million in savings through supply-chain optimization and operational restructuring. Excluding non-recurring charges, such as an out-of-period duty charge in the prior year, the improvement underscores progress in executing cost-saving measures and enhancing pricing strategies.

Kontoor's performance was supported by its core Wrangler and Lee brands, which maintained market share gains, as well as the recent acquisition of Helly Hansen, a move intended to expand its presence in high-performance apparel. The company also noted a 22% reduction in year-end inventory, signaling improved inventory management and alignment with demand.

Looking ahead, Kontoor raised its 2025 revenue outlook to the upper end of the $3.09 billion–$3.12 billion range, citing momentum from recent strategic investments and category expansion. However, shares faced short-term volatility in early 2025 after missing third-quarter revenue estimates due to timing shifts in shipping.

Analysts remain cautiously optimistic, with Kontoor's focus on digital transformation, direct-to-consumer growth, and global supply-chain improvements positioning it for long-term resilience in the competitive apparel sector.

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