Kontoor Brands saw net revenues for the six months (H1) ending June, increase 3% to $1.28bn.
Operating income for the period fell 5% to $151.8m and net income increased 5% to $116.8m.
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During the second quarter, net revenues increased 8% to $658m.
Reported operating income was $79m while reported EPS was $1.32. Adjusted EPS of $1.21 increased 23% compared to prior year.
“Our strong second quarter results were driven by better-than-expected organic revenue growth, gross margin expansion, operating efficiency and cash generation, as well as a stronger-than-expected contribution from Helly Hansen,” said Scott Baxter, president, CEO and chairman of the board of directors.
“We welcomed Helly Hansen to the Kontoor family in June and the integration is off to a great start. We are raising our full year outlook including increased investments and the absorption of higher tariffs, reflecting the resilience of our operating model, strong execution, and the momentum across the portfolio as we move into the second half of the year.”
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By GlobalDataPrice hikes, sourcing, product optimisation targeted as tariffs weigh on outlook
Kontoor Brands issued its full year outlook which now includes the anticipated impact from recently enacted increases in tariffs.
The company’s outlook assumes a 30% reciprocal tariff on China and a 20% reciprocal tariff on all other countries from which it sources product, with the exception of Mexico.
“The company continues to expect to substantially offset the impact from recently enacted increases in tariffs over a 12 to 18 month period through a combination of targeted price increases, sourcing and production optimisation within our global supply chain, inventory management, supplier partnerships and other initiatives,” it said.
Baxter added: “We are raising our full year outlook to reflect stronger first half results, greater visibility into our tariff mitigation initiatives, and the confidence we have in the outlook for our business for the balance of the year.
“Our ability to largely offset the impact from higher tariffs reflects the strength of our brands, the agility of our supply chain, and the benefits from Project Jeanius. To support our momentum, we are making incremental demand creation investments to fuel accelerating revenue growth and continued market share gains. While we will continue to manage the business prudently in light of the environment, the third quarter is off to an encouraging start and we enter the second half of the year from a position of strength.”
- Revenue now expected to be in the range of $3.09 to $3.12bn, representing an increase of approximately 19 to 20% (including an approximate 18% benefit from Helly Hansen)
- Adjusted operating income is now expected to be approximately $443m, representing an increase of 16% compared to the prior year. This compares to the prior outlook of $437m to $445m. Full year 2025 adjusted operating income now includes an approximate $30m impact from recently enacted increases in tariffs and incremental demand creation and other investments compared to the prior outlook.
- Adjusted EPS is now expected to be approximately $5.45, representing an increase of 11% compared to the prior year. This compares to the prior outlook of $5.40 to $5.50. Excluding the impact of Helly Hansen, adjusted EPS is expected to be approximately $5.25, representing an increase of 7% compared to the prior year. This compares to the prior outlook of $5.20 to $5.30.
