Kontoor Brands 2025 Q2 Earnings Strong Performance as Net Income Surges 43%

Kontoor Brands (KTB) reported robust fiscal 2025 Q2 earnings on Aug 7, 2025, exceeding expectations with a 43% year-over-year increase in net income to $73.87 million. The company raised its full-year revenue and EPS guidance, reflecting improved visibility and momentum driven by strong brand performance and strategic integration of Helly Hansen.

Revenue
Kontoor Brands' total revenue rose 8.5% to $658.26 million in 2025 Q2, compared to $606.90 million in the same period last year. The increase was driven by the acquisition of Helly Hansen and growth across the Wrangler and Lee brands. Specifically, Wrangler’s global revenue increased by 7% to $461 million, while Lee's revenue declined by 6% to $166 million. Excluding Helly Hansen, revenue grew by 4% year-over-year.

Earnings/Net Income
Earnings per share (EPS) surged 43% to $1.33 in 2025 Q2, up from $0.93 in 2024 Q2. The company's net income also increased by 42.7% to $73.87 million. Adjusted operating income reached $100 million, reflecting a 25% year-over-year increase. On an organic basis, adjusted operating income rose by 32% to $105 million, excluding the impact of Helly Hansen.

Price Action
The stock price of Kontoor Brands has experienced significant fluctuations in recent days. It climbed 4.05% during the latest trading day and surged 14.97% during the most recent full trading week. However, it has declined 9.78% month-to-date.

Post Earnings Price Action Review
A strategic approach of buying Kontoor Brands shares after its revenue increased quarter-over-quarter and holding for 30 days has demonstrated strong returns. This strategy achieved a 66.60% return over the past three years, outperforming the benchmark return of 48.81% by 17.79%. With a compound annual growth rate (CAGR) of 19.12% and a maximum drawdown of 0%, the strategy highlighted robust performance in both gains and risk management.

CEO Commentary
Scott Baxter, CEO of Kontoor Brands, emphasized the strong Q2 performance, noting that Wrangler's growth is accelerating, Lee's turnaround is on track, and Helly Hansen is outperforming expectations. Baxter highlighted the combined company's diversified portfolio and strategic opportunities for growth across brands, channels, and geographies. He expressed confidence in achieving full-year 2025 goals, citing improved visibility and momentum.

Guidance
Kontoor Brands raised its full-year 2025 revenue outlook to $3.09–$3.12 billion, up from $3.03–$3.08 billion. The company now expects Helly Hansen to contribute $455 million in 2025 revenue, up from the prior estimate of $425 million. Adjusted EPS guidance was increased to $5.45, reflecting a $0.20 impact from higher tariffs and incremental investments. Third-quarter revenue is projected at $855 million, with adjusted EPS expected at $1.35. The company anticipates strong cash generation, exceeding $375 million, and plans to return to pre-acquisition leverage by mid-2026.

Additional News
Kontoor Brands announced a voluntary $25 million term loan payment during the quarter and declared a regular quarterly cash dividend of $0.52 per share, payable on September 19, 2025. The company has $215 million remaining under its authorized share repurchase program. Notably, the acquisition of Helly Hansen has significantly bolstered the company's revenue and growth prospects, with the brand contributing $29 million in June alone. The company also expects to absorb the impact of higher tariffs through targeted price increases and supply chain optimization.