Kontoor Brands reports strong first-quarter growth and announces separation from Lee

US apparel group Kontoor Brands Inc. has started the new 2026 financial year with surprisingly strong results. Alongside the latest figures, the group also announced on Thursday its plan to separate from the Lee brand.

Several parties have already expressed interest in the denim label as part of the sales process already initiated, according to a statement. A binding agreement for the sale of the brand is expected to be concluded within the current year.

CEO and chairman Scott Baxter explained the reasons for the decision. “Our decision to divest Lee allows us to focus more sharply on opportunities with the greatest potential to maximise shareholder returns by aligning Kontoor's brand portfolio towards a higher growth profile,” he explained in a statement.

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. Revenue from continuing operations amounted to 613.3 million US dollars for the period from January to March. This represented an increase of 45 percent compared to the same period last year. Adjusted for currency fluctuations, revenue grew by 39 percent.

Outdoor specialist Helly Hansen, acquired last year, was a significant contributor to the strong growth, contributing 165.5 million US dollars to group revenue. Revenue for the core brand Wrangler grew by four percent (plus 2 percent on a currency-neutral basis) to 435.8 million US dollars.

Group more than doubles its quarterly profit

The group also made significant progress in its earnings. Adjusted operating profit from continuing operations increased by 60 percent compared to the same period last year, reaching 86.8 million US dollars. Net profit from continuing operations jumped from 10.2 million to 61.0 million US dollars.

The reported net profit, which includes earnings contributions from Lee, amounted to 92.4 million US dollars. This was more than double the figure from the prior-year quarter, when it stood at 42.9 million US dollars.

Management updates its annual forecast

In light of the plans to sell Lee and the unexpectedly strong performance of the remaining brands, management has updated its annual forecast. It now expects revenue from continuing operations to be between 2.66 and 2.70 billion US dollars. Adjusted earnings per share from continuing operations is projected to reach 5.15 to 5.25 US dollars.

The group also announced a new share buyback programme. This programme authorises the purchase of its own shares up to a total value of 750 million US dollars.

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