Kontoor Brands, the parent company of well-known U.S. apparel labels Wrangler and Lee, has reported a remarkable 27% increase in revenue for the third quarter of 2025. This growth has led the company to adjust its full-year outlook to the upper range of previous forecasts.
For the third quarter ending on September 27, 2025, Kontoor Brands generated revenues of $853 million, reflecting a notable rise, which included a two-point impact from shifting some shipments from Q3 to Q4.
Despite the impressive revenue numbers, the company’s operating income decreased to $64 million compared to $98 million in the same quarter last year, marking a 35% drop. However, adjusted operating income rose by 14% to $122 million.
Furthermore, Kontoor Brands reported a net income of $37 million, down 48% from the $71 million reported in the same quarter of the previous year.
“We are pleased to announce that Kontoor Brands revenue exceeded expectations for the third quarter, driven by the strength of our expanded brand portfolio, gross margin improvements, and effective operational execution,” stated Scott Baxter, CEO and chairman of the board.
“Although the timing change in shipments affected revenue growth, Wrangler delivered another quarter of broad-based growth and market share increases. Helly Hansen surpassed revenue and profitability expectations, and we launched our first equity campaign for Lee in several years while also enhancing marketplace vitality.”
Brand Performance Insights
In terms of brand performance, Wrangler’s global revenue reached $471 million, reflecting a 2% increase compared to the prior year. This figure included a three-point impact from the postponement of shipments. In the U.S., Wrangler’s revenue rose by 1%, particularly due to an 11% increase in direct-to-consumer sales, although U.S. wholesale showed no change due to the shipment timing. Internationally, Wrangler’s revenue saw a 6% increase, fueled by a 5% rise in wholesale and a 12% uplift in direct consumer sales.
Conversely, Lee brand reported a global revenue of $187 million, an 8% decrease compared to last year. This decline was impacted by proactive inventory management actions in China, amounting to a $7 million reduction. In the U.S. market, Lee’s revenue dropped by 9%, influenced by an 11% fall in wholesale sales, though this was partially offset by a 15% rise in online sales. Internationally, Lee experienced a 5% decrease, also affected by inventory management actions in China but offset by an increase in retail sales.
Helly Hansen posted a global revenue of $193 million, with contributions of $143 million from its Sports division and $42 million from Workwear.
Musto generated $7 million in revenue, with U.S. sales hitting $40 million and international revenue reaching $153 million.
Revised Full-Year Projections
Kontoor Brands has revised its expectations for the full year, now projecting revenues at the high end of its previous guidance of $3.09 billion to $3.12 billion, indicating an expected growth of around 19% to 20%.
The adjusted gross margin is anticipated to be approximately 46.4%, improving from a prior estimate of 46.1%, representing a 130 basis point increase compared to the previous year.
Also, adjusted operating income is now expected to be about $449 million, up from the previous estimate of $443 million, marking an 18% increase year-over-year.
The expected adjusted earnings per share (EPS) has been revised to around $5.50, an increase from the earlier projection of $5.45, representing a 12% rise compared to the prior year.
Kontoor also anticipates that cash from operations will reach approximately $400 million.
Baxter noted, “We are raising our full-year outlook to reflect stronger revenue and earnings growth, accelerating cash generation, and the benefits from Project Jeanius.” He added, “While we expect the near-term environment to remain dynamic, I am confident that our solid fundamentals, operational efficiency, and expanding capital allocation options will continue to drive strong value creation for our shareholders.”
Overall, Kontoor Brands’ performance in Q3 highlights its resilience and ability to adapt in a competitive apparel market.
