Kontoor Brands Inc. has reported positive revenue growth for the third quarter, despite facing challenges in China. The company, known for its popular jeans brands Lee and Wrangler, saw its total revenue climb to $655 million, representing an 8 percent increase. This growth was primarily driven by strong sales in the US wholesale and direct-to-consumer (DTC) channels, which offset the decline in China revenues.

In the US, Kontoor Brands achieved third-quarter revenue of $506 million, marking a 12 percent increase. The company experienced a 12 percent rise in US wholesale sales, thanks to strong performance across various categories, distribution channels, and market share gains. Additionally, Kontoor Brands saw continued strength in its DTC channel, with an 11 percent revenue increase on its own.com platform.

Internationally, Kontoor Brands’ revenue reached $149 million, representing a 4 percent decrease. While the DTC channel showed resilience, wholesale sales faced a decline. Notably, China experienced a significant drop of 23 percent, while Europe witnessed a 4 percent increase during the three-month period ending in September.

Breaking down the revenue by brand, the Wrangler brand saw global revenue of $445 million, achieving a 9 percent increase. On the other hand, the Lee brand recorded a 5 percent increase in global revenue, reaching $208 million.

Kontoor Brands expressed satisfaction with the results, stating that the strong revenue growth and profitability exceeded expectations, excluding the duty charge. The company attributed this success to strategic investments in its brands and emphasized the continued strength of its US point-of-sale (POS) and the positive performance of its DTC channel. Kontoor Brands considers DTC a critical pillar of its growth strategy and expects it to contribute further to its diversified and accretive growth.

Looking ahead, Kontoor Brands has revised its full-year revenue outlook. The company now expects an approximate 1 percent increase, compared to its previous projection of a low-single-digit percentage increase. Despite the challenges in the Chinese market, Kontoor Brands remains optimistic about its overall performance and is confident in its ability to continue delivering strong results.

Useful links:
1. Kontoor Brands Inc. official website
2. Kontoor Brands Inc. profile on Reuters