Kontoor Brands owns the Wrangler and Lee brands following the spin off from VF Corp.

Kontoor Brands owns the Wrangler and Lee brands following the spin off from VF Corp.

Kontoor Brands, the owner of the Wrangler and Lee brands that was recently spun-off from VF Corp, has reported a fall in revenues and profits for the second quarter but insists the restructuring and cost-saving actions it has taken to stabilise the business are paying off.

For the second quarter to the end of June the group reported an 8% fall in net revenues to US$609m, which it attributed to the decision to exit an underperforming market in Europe as well as business model changes in select markets, and a major US retailer bankruptcy.

Net income fell to $37.9m from $60.4m a year earlier and operating income fell 5% to $53.5m.

By brand, Wrangler's revenues fell 8% over the period to $364m, largely driven by international performance, while Lee's revenue fell 5% to $207m. Other brands saw revenue fall 20% to $39m.

"The restructuring and cost-savings actions we've taken to simplify and stabilise the organisation are paying off and are setting the foundation for improved profitability in the second half of 2019 and beyond," says Scott Baxter, president and CEO. "We will remain disciplined in our approach and focused on our total shareholder return goal of 8 to 10 percent supported by an industry leading dividend."

The company reaffirmed its full year 2019 outlook, with revenue expected to exceed $2.5bn and adjusted EBITDA ranging between $340m and $360m.

"We have the pieces in place and see a clear path to achieving our long-term revenue growth, margin improvement, and cash generation goals," Baxter adds. "These improvements start to gain traction in the second half of 2019 as our business model changes and cost improvement initiatives begin to take hold."

Kontoor Brands completed its separation from VF Corporation in May and is now a global, independent, publicly-traded company on the New York Stock Exchange. First announced in August of last year, the deal frees VF to sharpen its focus as a global clothing and footwear powerhouse focused on brands such as The North Face, Timberland and Vans.