Despite the decline, the company added that both the Europe and China businesses experienced a gradual recovery during the quarter, with continued sequential revenue improvements in both regions expected in the fourth quarter. September 26, 2020, Balance Sheet and Liquidity Review. KONTOOR BRANDS, INC. Condensed Consolidated and Combined Statements of Income (Unaudited) Three Months Ended December % Twelve Months Ended December % (Dollars in thousands) 2019 2018 Change 2019 2018 Change. While management believes that these non-GAAP measures are useful in evaluating the business, this information should be viewed in addition to, and not as an alternate for, reported results under GAAP. To calculate foreign currency translation on a constant currency basis, operating results for the current year period for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the average exchange rates in effect during the comparable period of the prior year (rather than the actual exchange rates in effect during the current year period). See “Notes to Supplemental Financial Information - Reconciliation of Adjusted Financial Measures" within the previous pages. The Company is a global company that reports financial information in U.S. dollars in accordance with GAAP. The Company was in compliance with the terms of its amended credit facility at the end of the third quarter. Statista. On an adjusted basis, operating income was $103 million, increasing 24 percent from $83 million in the same period in 2019. The Company entered into an amendment to the Credit Agreement on May 5, 2020 (the "Amendment") that established a temporary relief period for certain provisions regarding certain financial covenants, including the addition of a minimum liquidity floor as defined in the Amendment, which differs from the liquidity calculation presented in the table above. International revenue was $128 million, down 30 percent on a reported basis and down 31 percent in constant currency, primarily driven by COVID-19 impacts. Given the Company’s continued improving operational performance and strong cash flow generation, the Company today announced its Board of Directors has declared a regular quarterly cash dividend of $0.40 per share of its common stock. Lee® brand global revenue decreased to $214 million, down 8 percent on a reported and constant currency basis, driven primarily by COVID-19 impacts. Data delayed 15 minutes unless otherwise indicated (view delay times for all exchanges). See “Notes to Supplemental Financial Information - Reconciliation of Adjusted Financial Measures" within the following pages. Kontoor Brands India's operating revenues range is INR 100 cr - 500 cr for the financial year ending on 31 March, 2019. Adjusted gross margin in the fourth quarter of 2020 is anticipated to be above the 40.9 percent achieved in the prior year, reflecting continued benefits from ongoing restructuring and quality-of-sales initiatives, as well as higher anticipated growth in more accretive channels such as Digital and improving mix within international. Kontoor (KTB) delivered earnings and revenue surprises of 125.42% and 7.42%, respectively, for the quarter ended September 2020. While management believes that these non-GAAP measures are useful in evaluating the business, this information should be considered supplemental in nature and should be viewed in addition to, and not as an alternate for, reported results under GAAP. Tight expense control and restructuring benefits helped offset fixed cost de-leverage due to revenue declines. (5) Available liquidity at quarter-end is defined as the sum of the Company's available borrowing capacity under the Revolving Credit Facility plus the Company's cash and equivalents balance. The company, whose portfolio includes brands Wrangler and Lee, saw revenue drop 22 percent to 504 million dollars year-on-year as stores were forced to close and shoppers advised to stay indoors. Kontoor Brands (KTB) Q3 Earnings and Revenues Top Estimates Strong cash generation is expected to support continued aggressive debt paydown during the fourth quarter of 2020. Non-GAAP Financial Information: The financial information above has been presented on a GAAP basis and on an adjusted basis. International revenue was 128 million dollars, down 30 percent on a reported basis and down 31 percent in constant currency, primarily driven by Covid-19 impacts. Management uses the above non-GAAP financial measures internally in its budgeting and review process and, in some cases, as a factor in determining compensation. https://www.businesswire.com/news/home/20201029005311/en/. Condensed and Consolidated Balance Sheets, Prepaid expenses and other current assets, Condensed Consolidated and Combined Statements of Cash Flows. Amounts herein may not recalculate due to the use of unrounded numbers. Kontoor Brands is a global lifestyle apparel company, with a portfolio of some of the world's most iconic denim brands: Wrangler®, Lee®, 15,000 employees globally and $2.5 billion in annual revenue. (c) Non-cash impairment of intangible asset for the three months ended September 2019 represents a write-down of the Rock & Republic® trademark intangible asset to reflect fair value. (a) Refer to constant currency definition on the following pages. Find the latest Revenue & EPS data for Kontoor Brands, Inc. Common Stock (KTB) at Nasdaq.com. Non-GAAP Financial Information: The Company's primary sources of liquidity are cash generated from global operations and cash available under our Revolving Credit Facility. Net revenues $ 583,222 $ 638,138 (9)% $ 1,436,974 $ 1,896,228 (24)% Costs and operating expenses Cost of goods sold Management reviews net debt and available liquidity at quarter-end, as defined below, in its budgeting and review process. Chart. In addition, these non-GAAP measures may be different from similarly titled measures used by other companies. Potential risks and uncertainties that could cause the actual results of operations or financial condition of the Company to differ materially from those expressed or implied by forward-looking statements in this release include, but are not limited to: risks associated with the Company's spin-off from VF Corporation, including the risk of disruption to our business in connection with the spin-off and that the Company could lose revenue as a result of such disruption; the risk that the Company does not realize all of the expected benefits of the spin-off; the risk that the spin-off will not be tax-free for U.S. federal income tax purposes; the risk that there will be a loss of synergies from separating the businesses that could negatively impact the balance sheet, profit margins or earnings of the Company; the risk of significant costs to the Company to perform certain functions (currently being performed by VF Corporation for the Company on a transitional basis) following the transition period; and the risk associated with significant restrictions on the Company’s actions in order to avoid triggering tax-related liabilities. View source version on businesswire.com: https://www.businesswire.com/news/home/20201029005311/en/, Investors: Eric Tracy, (336) 332-5205 Senior Director, Investor Relations Eric.Tracy@kontoorbrands.com, Media: Vanessa McCutchen, (336) 332-5612 Vice President, Corporate Communications Vanessa.McCutchen@kontoorbrands.com. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. Kontoor Brands' second ... U.S. wholesale revenue dropped by 39% to $253 million versus the second quarter of 2019, while international wholesale revenue decreased by 50% to $44 million. Kontoor, which belongs to the Zacks Textile - Apparel industry, posted revenues of $583.22 million for the quarter ended September 2020, surpassing the Zacks Consensus Estimate by 7.42%. These transactions included sales of VF-branded products at VF Outlet™ stores, as well as sales to VF for products manufactured in our plants, use of our transportation fleet and fulfillment of a transition services agreement related to VF’s sale of its Nautica® brand business in mid-2018. U.S. revenue was 1.91 billion dollars, down 5 percent on a reported basis. For presentation purposes herein, all references to periods ended September 2020 and September 2019 relate to the 13-week and 39-week fiscal periods ended September 26, 2020 and September 28, 2019, respectively. We use constant currency information to provide a framework to assess how our business performed excluding the effects of changes in the rates used to calculate foreign currency translation. Fourth quarter adjusted SG&A is expected to increase year-over-year, driven by strategic decisions to amplify investments in demand creation and DTC in support of both the fourth quarter and long-term revenue. These adjusted presentations are non-GAAP measures. Do the numbers hold clues to what lies ahead for the stock? Revenue (Quarterly) Yoy Growth is a widely used stock evaluation measure. Other risks for the Company include foreign currency fluctuations; the level of consumer demand for apparel; financial difficulty experienced by the retail industry; disruption to distribution systems; reliance on a small number of large customers; the financial strength of customers; fluctuations in the price, availability and quality of raw materials and contracted products; disruption and volatility in the global capital and credit markets and its impact on the Company’s ability to obtain short-term or long-term financing on favorable terms; restrictions on the Company’s business relating to its debt obligations; diseases, epidemics and public health-related concerns, such as the recent impact of the COVID-19 pandemic, which could continue to result in closed factories, reduced workforces, supply chain interruption, and reduced consumer traffic and purchasing; response to changing fashion trends, evolving consumer preferences and changing patterns of consumer behavior, intense industry competition, including from online retailers, and manufacturing and product innovation; changes to trade policy, including tariff and import/export regulations; increasing pressure on margins; ability to implement its business strategy; ability to grow its international and direct-to-consumer businesses; the Company's and its vendors’ ability to maintain the strength and security of information technology systems; the risk that facilities and systems and those of third-party service providers may be vulnerable to and unable to anticipate or detect data security breaches and data or financial loss; ability to properly collect, use, manage and secure consumer and employee data; stability of manufacturing facilities and foreign suppliers; continued use by suppliers of ethical business practices; ability to accurately forecast demand for products; continuity of members of management; ability to protect trademarks and other intellectual property rights; possible goodwill and other asset impairment; operational difficulties and additional expenses related to the Company’s design and implementation of an enterprise resource planning software system; maintenance by licensees and distributors of the value of the Company’s brands; ability to execute and integrate acquisitions; changes in tax laws and liabilities; volatility in the price and trading volume of the Company’s common stock; failure to declare future cash dividends; the impact of climate change and related legislative and regulatory responses; legal, regulatory, political and economic risks; the risk of economic uncertainty associated with the recent exit of the United Kingdom from the European Union ("Brexit") or any other similar referendums that may be held; and unseasonal or severe weather conditions. Business Segment Information – Constant Currency Basis (Non-GAAP). Despite the decline, both the Europe and China businesses experienced a gradual recovery during the quarter, with continued sequential revenue improvements in both regions expected in the fourth quarter. Other includes sales of third-party branded merchandise at VF Outlet™ stores, sales and licensing of Rock & Republic® branded apparel, and sales of products manufactured for third parties. EBITDA margin on a reported basis increased to 15.7 percent of revenue and adjusted EBITDA margin increased 470 basis points to 18.8 percent of revenue. The company said in a statement that revenue declines during the quarter were primarily driven by Covid-19 impacts, offset in part by increases in digital, new business development wins, and a 33 million dollars shift in the timing of U.S. Wrangler shipments from the second quarter to the third quarter of 2020. Condensed Consolidated and Combined Statements of Operations, Selling, general and administrative expenses. Kontoor Brands - Quintet Please enable JavaScript This website requires JavaScript to work correctly. Inventory at the end of the third quarter of 2020 was $432 million, down $113 million or 21 percent compared to the prior-year period. These constant currency performance measures should be viewed in addition to, and not as an alternative for, reported results under GAAP. We design, manufacture and distribute superior high-quality products that look good and fit right, giving people around the world the freedom and confidence to express themselves. The non-GAAP measures used by the Company in this release may be different from similarly titled measures used by other companies. Management uses the above financial measures internally in its budgeting and review process and, in some cases, as a factor in determining compensation. Summary of Select GAAP and Non-GAAP Measures. This release refers to “adjusted” amounts and “constant currency” amounts, which are further described in the Non-GAAP Financial Measures section below. Market Data powered by QuoteMedia. 561,069 (1,924) 559,145. Additional information regarding adjusted amounts is provided in notes to the supplemental financial information included with this release. However, Kontoor Brands , in my view, isn't exposed to this given its casual, everyday brands. Many of the foregoing risks and uncertainties will continue to be exacerbated by the COVID-19 pandemic and any continued worsening of the global business and economic environment as a result. KONTOOR BRANDS, INC. Supplemental Financial Information Reconciliation of Adjusted Financial Measures - Quarter-to-Date (Non-GAAP) (Unaudited), Notes to Supplemental Financial Information - Reconciliation of Adjusted Financial Measures. Sales of Wrangler® and Lee® branded products at VF Outlet™ stores are not included in Other and are reported in their respective segments. Kontoor Brands (KTB) Reports Q2 Loss, Tops Revenue Estimates Kontoor (KTB) delivered earnings and revenue surprises of 31.25% and 29.79%, respectively, for the quarter ended June 2020. This release also refers to “constant currency” amounts, which exclude the translation impact of changes in foreign currency exchange rates. September % (Dollars in thousands) 2020 2019 Change 2020 2019 Change. At the end of the third quarter of 2020, the Company achieved its lowest net debt level and strongest liquidity position since becoming an independent, publicly traded company in May 2019. Kontoor Brands Inc. KTB, -2.67% shares rose 3.5% in Thursday premarket trading after the denim company reported second-quarter revenue that exceeded expectations. Adjusted Amounts - This release refers to “adjusted” amounts that exclude the impact of restructuring and separation costs, a non-cash impairment charge related to our Rock & Republic® trademark during the third quarter of 2019 and other adjustments. Zacks Equity Research, Zacks "Revenue growth of Kontoor Brands' Lee brand worldwide in fiscal year 2019, by region." (c) Represents an impairment charge recorded during the third quarter of 2019 related to the Rock & Republic® trademark. 17. Non-GAAP Financial Information: The financial information above has been presented on a GAAP basis and on an adjusted basis. Kontoor Brands is a global lifestyle apparel company, with a portfolio of some of the world's most iconic denim brands: Wrangler,® Lee®, 15,000 employees globally and $2.5 billion … On an adjusted basis, SG&A was $150 million, or 25.6 percent of revenue, down 230 basis points year-over-year. We do not intend to update any of these forward-looking statements or publicly announce the results of any revisions to these forward-looking statements, other than as required under the U.S. federal securities laws. For those unable to listen to the live broadcast, an archived version will be available at the same location. On an adjusted basis, gross margin increased 240 basis points to 43.3 percent of revenue. And, importantly, our robust cash flow generation allowed us to continue to aggressively pay down debt, while also providing the opportunity to reinstate a quarterly dividend in the fourth quarter of 2020, a key tenet of our total shareholder return model.”. March 11, 2020. At the same time, it's book networth has decreased by -29.93 %. Kontoor Brands is up nearly 60% since its IPO lows just three months ago. Net … At inception, this facility consisted of a five-year $750.0 million term loan A facility (“Term Loan A”), a seven-year $300.0 million term loan B facility (“Term Loan B”) and a five-year $500.0 million revolving credit facility (the “Revolving Credit Facility”) (collectively, the “Credit Facilities”) with the lenders and agents party thereto. These restructuring and separation costs resulted in a corresponding tax impact of $4.2 million and $4.5 million for the three months ended September 2020 and September 2019, respectively. Other global revenue declined 43 percent to $22 million on a reported and constant currency basis driven by COVID-19 impacts to the Company’s VF Outlet™ stores, as well as planned reductions in the sale of goods manufactured for third parties and the Rock & Republic® brand. Kontoor, which belongs to the Zacks Textile - Apparel industry, posted revenues of $349.25 million for the quarter ended June 2020, surpassing the Zacks Consensus Estimate by 29.79%. Foreign currency exchange rate fluctuations affect the amounts reported by the Company from translating its foreign revenues and expenses into U.S. dollars. All per share amounts are presented on a diluted basis. Management believes this information is useful to investors to facilitate comparison of operating results and better identify trends in our businesses. RT=Real-Time, EOD=End of Day, PD=Previous Day. While the impacts from the COVID-19 pandemic and macroeconomic factors remain uncertain, the Company is providing full-year 2020 Adjusted EPS guidance and additional perspective on its fourth quarter outlook, including the following: Kontoor Brands will host its third quarter 2020 conference call beginning at 8 a.m. Eastern Time today, October 29, 2020. (3) Net debt at quarter-end is calculated as total long-term debt, including current portion, outstanding under the Credit Facilities less the Company's cash and equivalents balance. Wrangler U.S. revenue increased 2 percent, driven by increases in digital, strength in the Western business and the timing shift into the third quarter. Reconciliation of Adjusted Financial Measures - Quarter-to-Date (Non-GAAP), (In thousands, except for per share amounts), Cost of goods sold - as reported under GAAP, Selling, general and administrative expenses - as reported under GAAP, Adjusted selling, general and administrative expenses, Other expense, net - as reported under GAAP, Diluted earnings per share - as reported under GAAP, Depreciation and amortization - as reported under GAAP. These adjusted presentations are non-GAAP measures. Kontoor Brands revenue from 2018 to 2020. Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) on a reported basis was $91 million. State of Alaska Department of Revenue […] Supplemental Financial Information Additional Information about Liquidity (Non-GAAP) (Unaudited), Outstanding Borrowings under the Credit Facilities: (1), Total long-term debt, including current portion, Available borrowing capacity under the Revolving Credit Facility (4). Adjustments during 2020 primarily represent costs associated with the Company’s global ERP implementation and information technology infrastructure build-out. “Our strategic actions delivered strong results in the quarter and are enhancing the Kontoor operating model focused on more profitable and sustainable long-term growth,” said Scott Baxter, President and Chief Executive Officer, Kontoor Brands. Terms of Use. ... Revenue, which was $2.8 billion in 2018, fell to $2.5 billion last year. KONTOOR BRANDS, INC. Condensed Consolidated and Combined Statements of Operations (Unaudited) Three Months Ended. Given the company’s continued improving operational performance and strong cash flow generation, Kontoor Brands also announced that its board of directors has declared a regular quarterly cash dividend of 40 cents per share of its common stock payable on December 18, 2020, to shareholders of record at the close of business on December 10, 2020. September % Nine Months Ended. Wrangler brand global revenue decreased to 347 million dollars, a 6 percent decline on a reported and constant currency basis. Full-year 2020 Adjusted EPS is anticipated to be in the range of $2.25 to $2.35. Gross margin for the quarter increased 410 basis points to 44.2 percent of revenue on a reported basis. Wrangler® U.S. revenue increased 2 percent, driven by increases in Digital, strength in the Western business and the previously mentioned timing shift into the third quarter. The company expects revenue in the fourth quarter to show continued sequential improvement from third quarter results, with revenue anticipated to be flat to down modestly. EBITDA on a reported basis was 91 million dollars and adjusted EBITDA was 109 million dollars, increasing 22 percent from 90 million dollars in the prior year. Adjustments primarily represent costs associated with the global ERP implementation and information technology infrastructure build-out. September % Nine Months Ended. As of September 2020, the Company had $125 million of outstanding borrowings under the Revolving Credit Facility and $368 million available for borrowing against this facility. Reconciliations of these non-GAAP measures to the most comparable GAAP measures are presented in the supplemental financial information included with this release that identifies and quantifies all reconciling adjustments and provides management's view of why this non-GAAP information is useful to investors. On an adjusted basis, gross margin increased 240 basis points to 43.3 percent of revenue. For more information about Kontoor Brands, please visit www.KontoorBrands.com. This page provides a brief financial summary of Kontoor Brands Inc as well as the most significant critical numbers from each of its financial ... KontoorBrands Inc revenues decreased 24% to $1.44B. During the third quarter, U.S. revenue was $455 million, flat year-over-year on a reported basis. Earnings per share was $1.05 on a reported basis compared with $0.25 in the prior year. The $32.6 million impairment charge resulted in a tax impact of $(7.4) million for the three months ended September 2019. As a supplement to our reported operating results, we present constant currency financial information, which is a non-GAAP financial measure that excludes the impact of translating foreign currencies into U.S. dollars. Operating income on a reported basis was $83 million, increasing 167 percent compared with the prior year. The conference will be broadcast live via the Internet, accessible at https://www.kontoorbrands.com/investors. Strong cash generation is expected to support continued aggressive debt paydown, which is anticipated to be at least $100 million during the fourth quarter. Earnings per share were 1.05 dollars on a reported basis compared with 25 cents in the prior year and adjusted earnings per share were 1.33 dollars compared with 95 cents in the prior year. Kontoor Brands Inc ... Lee brand global revenue declined 8% compared with the same quarter in 2019. Lee U.S. revenue increased 10% in the period driven … It was spun off from the VF Corporation in May 2019, and markets denim clothing under the Lee, Wrangler and Rock & Republic brand names. In addition, adjusted EBITDA is a key financial measure for the Company's shareholders and financial leaders, as the Company's current debt financing agreements require the measurement of adjusted EBITDA, along with other measures, in connection with the Company's compliance with debt covenants. (2) As of September 2020, Term Loan A and Term Loan B had remaining outstanding principal balances of $700.0 million and $223.0 million, respectively, and are recorded net of unamortized original issue discount and deferred financing costs. In addition, adjusted EBITDA is a key financial measure for the Company's shareholders and financial leaders, as the Company's debt financing agreements require the measurement of adjusted EBITDA, along with other measures, in connection with the Company's compliance with debt covenants. Revenue is the top line item on an income statement from which all costs and expenses are subtracted to arrive at net income. Kontoor Brands is the latest company to reveal the impact Covid-19 has had on its first quarter results. KONTOOR BRANDS, INC. Other revenues. Total net revenues $ 583,222 $ (1,907) $ 581,315. Net revenues $ 652,611 $ 726,233 (10)% $ 2,548,839 $ 2,763,998 (8)% Costs and operating expenses “Our strategic actions delivered strong results in the quarter and are enhancing the Kontoor operating model focused on more profitable and sustainable long-term growth,” said Scott Baxter, President and Chief Executive Officer, Kontoor Brands. The company expects full-year adjusted EPS to be in the range of 2.25 dollars to 2.35 dollars. “Our accomplishments during the third quarter are a direct reflection of our colleagues’ incredible efforts, and I want to thank them for their tremendous contributions throughout these dynamic times,” added Baxter. … Adjusted earnings per share was $1.33 compared with $0.95 in the prior year. Kontoor Brands, Inc. (NYSE: KTB) is a global lifestyle apparel company, with a portfolio led by two of the world’s most iconic consumer brands: Wrangler® and Lee®. Kontoor Brands is an American clothing company. “Investments in our brands, people and partnerships drove significant sequential top line improvement, while restructuring, quality-of-sales initiatives and accretive mix shifts supported solid gross margin increases. Kontoor, which belongs to the Zacks Textile - Apparel industry, posted revenues of $583.22 million for the quarter ended September 2020, surpassing the Zacks Consensus Estimate by 7.42%. The firm owned 36,511 shares of the company’s stock after selling 7,300 shares during the quarter. Market Data copyright © 2021 QuoteMedia. State of Alaska Department of Revenue lowered its position in Kontoor Brands, Inc. (NYSE:KTB) by 16.7% in the fourth quarter, according to its most recent 13F filing with the Securities and Exchange Commission. 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