Kontoor Brands, the parent company of denim brands Lee and Wrangler, has reported a decline in both revenues and earnings for the fourth quarter and full fiscal year 2019. The company attributed the revenue decrease to various strategic and operational changes implemented throughout the year, including proactive quality-of-sales initiatives, the decision to exit an underperforming country, and the reduction of certain lower margin product lines. Kontoor Brands also cited the negative impact of a major U.S. retailer’s bankruptcy in the fourth quarter of 2018.

During the fourth quarter of 2019, Kontoor Brands recorded revenues of $652.6 million, marking a 10% decrease compared to the same period in the previous year. In the U.S., the company saw an 8% decline in sales, totaling $516.7 million, while international revenue dropped by 17% to $135.9 million. Within its brand portfolio, Wrangler sales fell by 6% to $417.0 million, and Lee revenues decreased by 12% to $201.6 million. Other global revenue, which includes brands like VF Outlet and Rock & Republic, experienced a significant 36% decline, amounting to $34.0 million.

The company’s income for the fourth quarter totaled $28.8 million, down from $51.9 million in the same period of the previous year. For the entire fiscal year 2019, Kontoor Brands reported an 8% decrease in revenue, amounting to $2.55 billion. U.S. revenue fell by 5% to $1.91 billion, and international revenue declined by 15% to $638.9 million. Wrangler contributed $1.52 billion in sales, representing a 5% decrease year-over-year, while Lee contributed $882.3 million, a decline of 8%. Other global revenue decreased by 26%, totaling $148.5 million. The company’s total annual income for fiscal year 2019 was $96.7 million, down from $263.1 million in fiscal year 2018.

Kontoor Brands’ President and CEO, Scott Baxter, commented on the company’s performance, stating, “2019 has been a year of transformational change for our organization, our leadership teams, and our employees around the globe.” Looking ahead to fiscal year 2020, the company expects revenue to remain consistent with the previous year, with a decline in sales during the first half of the year. Kontoor Brands forecasts adjusted annual earnings per share to be in the range of $3.55 to $3.65. However, these projections do not take into account the potential impact of the ongoing coronavirus outbreak.

China, where the outbreak originated, contributes approximately 7% of Kontoor Brands’ annual revenues. The company temporarily closed most of its retail stores in China in February, but around 75% are currently open as the situation improves. Kontoor Brands stated that so far, there have been no significant disruptions to its supply chain, but it continues to closely monitor the situation.

Relevant links:
1. [Kontoor Brands official website](https://www.kontoorbrands.com/)
2. [Kontoor Brands investor relations](https://www.kontoorbrands.com/investors/default.aspx)