Kontoor Brands said it’s showing signs of recovering from the economic impacts of the ongoing coronavirus pandemic.
The North Carolina-based lifestyle and denim brands company reported third quarter net revenues were $583 million, a 9 percent decrease from $638 million last year. It made a $60.8 million profit for the quarter compared to $14.5 million in the third quarter last year, and its adjusted earnings per share also rose, to $1.33 from $0.95 last year.
For the three-month period ending Sept. 26, Wrangler’s revenues were $347 million, a roughly 6 percent drop. The brand’s U.S. revenue increased 2 percent, thanks in part to what the company said was a shift of $33 million in shipments from the second quarter to the third. Lee brand’s revenues decreased 8 percent to $214 million, though its U.S. revenues increased 10 percent.
Kontoor’s overall U.S. revenues for the quarter stayed flat to last year, at $455 million. Kontoor said that while it continued to feel the effects of COVID-19 on its international business, with international revenue down about 30 percent to $128 million, its businesses in China and Europe have shown signs of recovery over the quarter and are projected to continue on that trajectory.
However, the pandemic continues to surge in waves, with between 70,000 to 80,000 new daily cases now reported in the U.S., according to the Johns Hopkins case tracker, and France and Germany implemented more lockdowns to curb the swell of cases, and the uncertainty of the toll of the virus continues.
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“Our strategic actions delivered strong results in the quarter and are enhancing the Kontoor operating model focused on more profitable and sustainable long-term growth,” said Scott Baxter, president and chief executive officer.
“Investments in our brands, people and partnerships drove significant sequential top line improvement, while restructuring, quality-of-sales initiatives and accretive mix shifts supported solid gross margin increases,” he said. “And, importantly, our robust cash flow generation allowed us to continue to aggressively pay down debt, while also providing the opportunity to reinstate a quarterly dividend in the fourth quarter of 2020, a key tenet of our total shareholder return model.
“Our accomplishments during the third quarter are a direct reflection of our colleagues’ incredible efforts, and I want to thank them for their tremendous contributions throughout these dynamic times,” he said.
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