The US clothing group Kontoor Brands Inc. was once again able to achieve a surprisingly strong increase in sales in the third quarter of the 2025 financial year thanks to the takeover of the outdoor outfitter Helly Hansen. However, one-off charges led to a significant decline in profits. In view of the unexpectedly strong results, the company raised its annual forecasts once again.
According to an interim report published on Monday, group sales in the period from July to September amounted to 853.2 million US dollars (740.8 million euros). This corresponded to an increase of 27 percent compared to the same quarter of the previous year.
Revenues for the Wrangler brand increased by two percent to $471.2 million, while for the Lee label they fell by eight percent to $186.7 million. The new addition Helly Hansen, whose takeover was completed at the beginning of June, contributed $185.9 million to consolidated sales in the past quarter.
One-off charges reduce profits
Due to one-off charges, which primarily resulted from restructuring expenses and costs associated with the acquisition and integration of Helly Hansen, operating profit fell by 35 percent to $63.9 million. However, adjusted for special effects, the operating result increased by 14 percent to $122 million, according to the company. The reported net profit shrank by 48 percent to 36.9 million US dollars (32.1 million euros).
Scott Baxter, the group’s CEO, chairman and president, was satisfied with the current figures. “Our third quarter results exceeded expectations, driven by the strength of our expanded brand portfolio, gross margin expansion and operational execution,” he said in a statement. Helly Hansen’s sales and profitability once again developed “better than expected”.
Management is further raising its earnings forecasts
Due to the latest developments, management again raised its sales forecast for the entire financial year. Sales are now expected to be “in the upper range” of the previous forecast range of $3.09 to $3.12 billion.
The target for operating profit adjusted for special items, which had previously been $443 million, was increased to $449 million. That would mean growth of 18 percent compared to the previous year. Diluted earnings per share, adjusted for special items, are expected to increase by twelve percent to $5.50. The previous forecast was $5.45.