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what it is
Kontoor makes Wrangler, Lee, and Helly Hansen clothes and sells them through stores, websites, and wholesalers.
how it gets paid
Last year Kontoor Brands made $3.2B in revenue.
why it's growing
Revenue grew 20.9% last year. 46.8% gross margin mattered most because it was 210 basis points better than last year and showed the mix is doing work.
what just happened
Kontoor beat on $1.73 EPS, while gross margin hit 46.8%.
At a glance
B+ balance sheet — decent shape, but not bulletproof
40/100 earnings predictability — expect surprises
15.2x trailing p/e — the market's not buying it — or you found a deal
3.5% dividend yield — cash in your pocket every quarter
16.5% return on capital — nothing to write home about
xvary composite: 56/100 — below average
What they do
Kontoor makes Wrangler, Lee, and Helly Hansen clothes and sells them through stores, websites, and wholesalers.
Wrangler was 70% of 2024 sales. Lee was 30%. Two brands did almost all the work, and that is the point. Helly Hansen joined on 6/2/2025, so you get a third label without starting from zero. Wholesale means other stores sell it for you, which keeps the clothes on more racks than one company could fund alone.
How they make money
$3.2B
annual revenue · their business grew +20.9% last year
total revenue
$3.2B
+20.9%
The products that matter
denim and workwear brand
Wrangler
$2.2B · 58.3% of revenue
it's the anchor brand. at $2.2B, Wrangler generates more than half of company sales, so when this brand works, the whole story looks cleaner.
58.3% of revenue
heritage denim brand
Lee
$946M · 25.0% of revenue
Lee is smaller at $946M, but one quarter of revenue is still too large to ignore. if this brand stalls, the diversification argument gets thin fast.
25.0% of revenue
non-u.s. revenue exposure
International sales
$630M · 16.7% of revenue
this $630M slice shows there is growth outside the home market, but it is still a minority of the $3.2B business. the core story remains branded denim.
16.7% of revenue
Key numbers
15.2x
trailing p/e
You pay $15.20 for every $1 of trailing profit. That is not bargain-bin math.
3.5%
dividend yield
You get $3.50 a year for every $100 you put in. That is cash while you wait.
16.5%
return on capital
For every $100 Kontoor puts to work, it earns $16.50 in profit. That is why the business still earns attention.
$88
target price
The target sits 44% above $60.99. The market is not pricing the full rerate yet.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 3 — safer than 50% of stocks
- price stability 35 / 100
- long-term debt $1.3B (28% of capital)
- net profit margin 9.9% — keeps 10 cents of every dollar in revenue
- return on equity 30% — $0.30 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in KTB 3 years ago → it's now worth $15,910.
The index would have given you $14,770.
source: institutional data · total return
What just happened
beat estimates
Kontoor beat on $1.73 EPS, while gross margin hit 46.8%.
Revenue was $1.02B versus the $978.6M estimate. EPS beat the $1.26 estimate by 37.3%. Gross margin expanded 210 basis points, which is 2.1 percentage points.
$1.02B
revenue
$1.73
eps
46.8%
gross margin
the number that mattered
46.8% gross margin mattered most because it was 210 basis points better than last year and showed the mix is doing work.
-
kontoor brands’ stock price has hit a reset over the three months since our october review.
-
at that time, the shares had rallied to over $80 following the acquisition of helly hansen.
-
the price has since fallen roughly 25% in a fairly steady decline.this reopens much of the upside potential for the stock that we had previously envisioned, but was discounted by the high valuation.
-
the correction was partially driven by an uneven september-period result (more below).
-
both top and bottom lines missed our estimates in the fiscal third quarter.
source: company earnings report, 2026
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What could go wrong
the #1 risk is tariff and sourcing pressure on imported denim and apparel.
med
tariffs hit margins first
kontoor's manufacturing footprint leaves it exposed to import costs. on an 8.8% net margin, you do not need a massive cost shock to feel it in earnings.
if costs rise faster than pricing, the dividend story gets less comfortable and the low multiple can stay low.
med
two brands carry 83% of the story
Wrangler and Lee generate 83% of revenue. that's efficient when both brands are healthy, but it also means brand fatigue or channel weakness has nowhere to hide.
a stumble in either label would pressure the $3.2B revenue base more than the market wants from a supposedly stable dividend name.
med
earnings volatility is real
earnings predictability is 40/100 and last quarter's EPS fell 48% from a year ago. this is not the kind of stock where you can sleep through every quarter.
if estimate cuts continue, a cheap p/e stops looking cheap and starts looking accurate.
with $1.3B in long-term debt and just an 8.8% net margin, kontoor does not have much room for repeated operating misses.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings
next report in february
you need to see whether $0.66 EPS was the trough or the start of a weaker earnings run.
margin
net margin versus 8.8%
single-digit margins do not leave much room for tariff pressure, freight inflation, or promotional discounting.
brand trend
Wrangler and Lee demand
those two brands represent 83% of revenue. if either slips, you will feel it fast.
balance sheet
debt discipline after the acquisition
$1.3B in long-term debt is manageable until earnings wobble. watch leverage and cash usage, not just the dividend.
Analyst rankings
short-term outlook
average
momentum score 3 — in human-speak, analysts see a stock behaving like the market, not breaking away from it.
risk profile
average
stability score 3 — neither especially safe nor especially wild, though that 35 / 100 price stability score says the chart can still get messy.
chart momentum
top 5%
technical score 1 — the highest rating. translation: the chart looks better than the fundamentals feel.
earnings predictability
40 / 100
expect more variance than you would from a classic steady eddie consumer brand.
source: institutional data
Institutional activity
institutions have been net buying for 2 consecutive quarters — 186 buyers vs. 178 sellers in 3q2025. total institutional holdings: 52.6M shares. net buying for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$51
$125
$61
current price
$88
target midpoint · +44% from current · 3-5yr high: $130 (+115% · 23% ann'l return)
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