The US clothing supplier Kontoor Brands Inc. was able to exceed its own expectations in the third quarter of the 2023 financial year. On Thursday, the parent company of denim brands Wrangler and Lee reported solid increases in sales and earnings. However, the annual forecasts were revised downwards due to the adverse market conditions and negative one-off charges.
In the months July to September, group sales were 654.5 million US dollars (615.1 million euros). This corresponded to an increase of eight percent (currency-adjusted +7 percent) compared to the same quarter of the previous year. The Wrangler brand achieved an increase of nine percent (+9 percent at constant currencies) to 444.5 million US dollars, while Lee’s sales grew by five percent (+3 percent at constant currencies) to 208.0 million US dollars.
Although the group had to pay additional customs duties following an investigation, the result also increased significantly. The operating profit grew by 14 percent to 85.5 million US dollars, the quarterly profit increased by 17 percent and reached 59.5 million US dollars (55.9 million euros).
Despite the surprisingly good quarterly figures, management cut the forecasts for the entire 2023 financial year in view of the declining consumer sentiment in the USA. Sales growth of one percent is now expected, after previously forecasting an increase in the low single-digit percentage range. The target for diluted earnings per share, adjusted for special items, which had previously been between $4.55 and $4.75, was reduced to $4.35. This includes a one-time charge of 0.15 US dollars due to additional customs duties.