The US clothing group Kontoor Brands Inc. started the new 2026 financial year with surprisingly strong results. In addition to the current figures, the group also announced its plan to separate from the Lee brand on Thursday.
As part of the sales process that has already been initiated, several parties have already expressed interest in the denim label, according to a statement. It is expected that a binding agreement on the sale of the brand will be concluded this year.
CEO and Chairman Scott Baxter explained the reasons for the decision. “Our decision to divest Lee allows us to sharpen our focus on the opportunities with the greatest potential to maximize shareholder returns by aligning Kontoor’s portfolio of brands with a higher growth profile,” he said in a statement.
The Wrangler and Helly Hansen brands exceed expectations
In light of these plans, Lee has already been classified as a discontinued operation in the current quarterly report. Sales from continuing operations amounted to 613.3 million US dollars (521.4 million euros) in the period from January to March. This corresponded to an increase of 45 percent compared to the same period last year. Adjusted for exchange rate changes, revenue grew by 39 percent.
The outdoor outfitter Helly Hansen, which was acquired last year and contributed $165.5 million to consolidated sales, made a significant contribution to the significant increase. Revenues from the core Wrangler brand grew by four percent (+2 percent at constant currency) to $435.8 million.
The group can more than double its quarterly profit
The group also made strong progress in terms of earnings. Operating profit from continuing operations, adjusted for special items, increased by 60 percent compared to the same period last year and reached $86.8 million. Net income from continuing operations jumped from $10.2 million to $61.0 million.
The reported net profit, which also includes Lee’s contributions to earnings, amounted to 92.4 million US dollars (78.6 million euros). This was more than twice as high as in the same quarter of the previous year, in which it was $42.9 million.
Management updates annual forecasts
Given Lee’s sales plans and stronger-than-expected numbers from the remaining brands, management updated its full-year guidance. It now expects revenue from continuing operations to be between $2.66 billion and $2.70 billion. Earnings per share from continuing operations, adjusted for special items, are expected to reach $5.15 to $5.25.
The group also announced a new share buyback program. This provides for the acquisition of own shares with a total value of up to 750 million US dollars.