The apparel company said it expects to enter into accelerated share repurchase agreements with financial institutions in early November.
The transaction will use its existing $750m repurchase authorisation, under which $680m remained available at the end of the quarter.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Kontoor expects to receive an initial delivery of approximately 80% of the shares covered by the agreements.
The company repurchased $20m of stock during the third quarter and had bought back $95m year to date.
Kontoor Brands’ president and chief financial officer Joe Alkire said: “We are building a more growth-oriented business through our transformation efforts and the evolution of our portfolio. These efforts are enabling us to attract top-tier talent, create investment capacity and enhance organisational agility, positioning us well to win in any environment. We have increased our planned share repurchases to $450 million based on the confidence we have in our long-term strategy and the significant value-creation opportunity ahead.”
Kontoor Brands Q3 metrics
During the third quarter ended 3 October 2026, the company’s revenue from continuing operations increased 3% year on year to $685m.
Wrangler generated $485m, also up 3%, while Helly Hansen revenue rose 3% to $191m. Wrangler’s US direct-to-consumer revenue jumped 7%, with US wholesale sales up 2%. International revenue rose 6%, supported by a 25% increase in international direct-to-consumer sales.
Helly Hansen’s sport division grew 2% to $147m, while workwear revenue rose 5% to $44m.
The company’s adjusted operating income rose 6% to $101m, producing a 14.7% adjusted operating margin, up 40 basis points from the prior-year quarter. Adjusted earnings per share increased 40% to $1.50.
Reported diluted earnings per share were negative $0.62, mainly because of a non-cash tax charge of $1.73 per share linked to the migration of Helly Hansen intellectual property.
Adjusted gross margin increased 230 basis points to 48.1%. The company attributed the improvement to its Project Jeanius programme, product mix and pricing, after accounting for changes in product costs.
The quarter also included higher adjusted selling, general and administrative costs, which rose to $229m, or 33.4% of revenue.
Kontoor said the increase reflected additional costs previously allocated to Lee, as well as spending on direct-to-consumer operations, demand creation and technology.
Kontoor chief executive officer and Board of Directors chairman Scott Baxter said: “Our third quarter results were driven by growth in both Wrangler and Helly Hansen, strong earnings and gross margin expansion. Execution excellence remains a critical focus of our organisation as we delivered strong business results, successfully completed the divestiture of Lee, advanced our integration of Helly Hansen, and realised additional synergies through optimisation of our tax platform.”
FY26 outlook
Kontoor updated its full-year revenue outlook to approximately $2.68bn, representing growth of 12%, and adjusted operating income of approximately $400m.
The company raised its adjusted EPS forecast to $5.40, from a previous range of $5.25 to $5.35. It expects an adjusted gross margin of 50.0% to 50.2% and adjusted SG&A expenses to increase by about 25% year on year.
The revised forecast includes $450m of share repurchases during the fourth quarter, higher freight and foreign exchange-related expenses, and costs previously allocated to Lee.
Kontoor expects fees from services provided during the Lee transition to be recorded as other income. For 2027, the company said it expects an adjusted EPS of at least $6.60 and operating cash flow of at least $325m.
The forecast includes one-time costs linked to the Helly Hansen systems migration, as well as restructuring and other measures intended to offset expenses previously allocated to Lee.
Alkire continued: “We are updating our full-year outlook to reflect our year-to-date results, the successful completion and final terms of the divestiture of Lee, as well as stronger gross margin expansion and earnings growth. While the operating environment remains dynamic, we are well positioned to accelerate value creation supported by sharper portfolio focus, increased capital allocation optionality and stronger earnings growth.”
