Kontoor Brands raises full-year forecast again despite third-quarter profit decline

US apparel group Kontoor Brands Inc. has once again achieved a surprisingly strong increase in sales in the third quarter of the 2025 financial year, thanks to the acquisition of outdoor outfitter Helly Hansen. However, one-off charges led to a significant decline in profit. In light of the unexpectedly strong results, the company has raised its full-year forecast once again.

According to an interim report published on Monday, group sales for the period from July to September amounted to 853.2 million US dollars. This represented an increase of 27 percent compared to the same quarter last year.

Revenue for the Wrangler brand increased by 2 percent to 471.2 million US dollars, while the Lee label saw a decrease of 8 percent to 186.7 million US dollars. New addition Helly Hansen, whose acquisition was completed at the beginning of June, contributed 185.9 million US dollars to group sales in the past quarter.

One-off charges impact profit

Due to one-off charges, which mainly resulted from restructuring expenses and costs related to the acquisition and integration of Helly Hansen, operating profit fell by 35 percent to 63.9 million US dollars. However, adjusted for special items, the company reported that operating income increased by 14 percent to 122 million US dollars. Reported net profit shrank by 48 percent to 36.9 million US dollars.

Scott Baxter, the group's CEO, chairman and president, expressed satisfaction with the current figures. “Our third-quarter results exceeded expectations, driven by the strength of our expanded brand portfolio, gross margin improvement and operational execution,” he explained in a statement. He added that the sales and profitability of Helly Hansen had once again performed “better than expected”.

Management raises earnings forecast again

Following the recent performance, management has raised its sales forecast for the full financial year again. Sales are now expected to be “at the upper end” of the previous forecast range of 3.09 to 3.12 billion US dollars.

The target for adjusted operating profit, previously set at 443 million US dollars, has been raised to 449 million US dollars. This would represent a growth of 18 percent year-over-year. Adjusted diluted earnings per share are expected to increase by 12 percent to 5.50 US dollars, up from the previously forecast 5.45 US dollars.

This article was translated to English using an AI tool.

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