Not least thanks to unexpectedly good business in the fourth quarter, the US clothing group Kontoor Brands Inc. was able to present strong results for the 2022 financial year on Tuesday. The parent company of the Wrangler and Lee brands now expects further growth in the current year.
In 2022, the group generated sales of 2.63 billion US dollars (2.48 billion euros). This corresponded to an increase of six percent (currency-adjusted +8 percent) compared to the previous year. Revenues in the US increased 11 percent to $2.07 billion, while international revenues declined 8 percent (-1 percent at constant currency) to $557 million. In addition to negative currency effects, the clothing supplier blamed the temporarily tightened protective measures against the Covid 19 pandemic in China. Sales there fell short of the previous year’s level by 23 percent (currency-adjusted -20 percent).
The growth engine was the Wrangler brand, whose global annual sales increased by eleven percent (currency-adjusted +12 percent) to 1.75 billion US dollars. The Lee label, on the other hand, had to accept a decline of one percent to 874 million US dollars. Adjusted for exchange rate changes, however, the brand’s sales increased by one percent.
Although higher costs and negative currency effects squeezed the gross margin, the group was able to increase its earnings strongly thanks to “strict expenditure controls”. Operating profit was 356.7 million, up 26 percent year-on-year. Net income also grew 26 percent to reach $245.5 million.
In the current financial year, sales and earnings are to be further increased. The management forecast an increase in sales “in the low single-digit percentage range”. With earnings per share, which were $4.31 in 2022, the group expects an improvement to between $4.55 and $4.75.