10-Q · May 14, 2026
Kontoor Brands reported Q1 2026 revenue of $613.3 million, an increase of 45% year-over-year, driven primarily by the Helly Hansen acquisition. Gross margin improved significantly to 53.7%, up 810 basis points, while…
Earnings analysis · 10-Q
KTB earnings analysis
Filed August 12, 2026 · Our reading of the company's report
The latest report
Kontoor delivered strong year-over-year operating performance in Q2, with revenue up 19% to $584.3 million, gross margin up 970 basis points to 56.2% and operating income up 59% to $90.5 million. Wrangler generated…
Read full summary
Kontoor delivered strong year-over-year operating performance in Q2, with revenue up 19% to $584.3 million, gross margin up 970 basis points to 56.2% and operating income up 59% to $90.5 million. Wrangler generated modest revenue growth with substantial margin expansion, while Helly Hansen improved to a $1.9 million segment profit; however, reported diluted EPS from continuing operations declined to $1.03 from $1.05 because the prior year included a $33.0 million foreign-exchange hedge gain. Operating cash flow also fell to $39.6 million from $68.8 million for the first six months, while the pending Lee divestiture and tariff uncertainty remain significant execution risks.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $1.03
What stood out
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Revenue grew 19% year over year
Q2 net revenue increased 19% year over year to $584.3 million from $492.6 million, driven primarily by $84.7 million of incremental Helly Hansen revenue. Revenue declined from $613.0 million in Q1 2026, based on the reported quarterly history.
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Gross margin reached 56.2%
Gross margin expanded to 56.2% from 46.5% year over year, a 970-basis-point improvement, and increased from 53.7% in Q1 2026. Management attributed the gain to channel, product mix and pricing, Project Jeanius, Helly Hansen mix and a $15.4 million manufacturing-facility gain.
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Operating leverage strengthened
Operating income rose 59% to $90.5 million from $56.9 million, lifting operating margin to 15.5% from 11.6% year over year and 14.7% in Q1 2026. The $15.4 million facility-sale gain and Helly Hansen contribution were key drivers.
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Wrangler profit grew faster than sales
Wrangler segment profit increased 28.5% to $138.9 million on 1.7% revenue growth to $469.0 million; its operating margin expanded to 29.6% from 23.4%. International Wrangler revenue increased 10%, while U.S. wholesale revenue was flat.
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Helly Hansen turned profitable
Helly Hansen revenue rose to $106.8 million from $26.7 million, reflecting a full-quarter contribution versus one month in the prior-year period. Segment profit improved to $1.9 million from a $4.8 million loss, supported by better inventory management, less promotion and full-price selling.
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Capital allocation capacity increased
The company authorized a $750.0 million share-repurchase program and repurchased $75.0 million of stock during the first six months. Management intends to use expected Lee-sale proceeds for share repurchases and voluntary debt repayments.
What to watch
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Lee sale execution risk
The Lee transaction may not close on the contemplated terms or timeline. The agreement provides for $750 million of cash at closing plus a $250 million earnout, and either party may terminate if closing has not occurred by February 1, 2027.
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Divestiture stranded-cost risk
The company could retain liabilities or incur additional costs if the Lee divestiture is delayed or not completed. Lee is reported as discontinued operations, and management intends to sell it by the end of fiscal 2026 but states that completion is not assured.
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Tariff and supply-chain volatility
Tariff and supply-chain uncertainty remains material. Management cited disruptions from the U.S.-Iran conflict, higher freight and energy costs, and changing Section 301 tariffs; the company recognized a $53.7 million tariff receivable and expects to collect remaining refunds by the end of fiscal 2026.
Management's outlook
The 10-Q does not provide new annual revenue or EPS guidance. Management expects to complete the Lee sale in fiscal 2026, with $750.0 million cash at closing and a potential $250.0 million earnout, and expects 2026 capital expenditures of approximately $30.0 million.
Earlier filings 4
10-K · March 4, 2026
Kontoor completed the strategic acquisition of Helly Hansen on May 31, 2025 for CAD 1.3 billion (USD $957.5 million) and integrated the brand into results for the back half of 2025. Net revenues show a clear step-up in…
10-Q · August 7, 2025
Kontoor reported Q2 net revenues of $658,259,000 and diluted EPS of $1.32, both up versus the year-ago quarter. Gross margin expanded to 46.3% (from 44.7% in Q2 2024) while operating margin was essentially flat at…
10-Q · May 6, 2025
Kontoor reported Q1 fiscal 2025 net revenues of $622,901,000, down from $631,202,000 in Q1 2024, while gross margin expanded to 47.5% from 45.2% and operating margin compressed to 11.8% from 13.4%. Diluted EPS fell to…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.