Kontoor Brands, Inc. reported first-quarter 2025 financial results, with revenue of $623 million, a 1% decrease (flat in constant currency) compared to the prior year. Adjusted earnings per share (EPS) was $1.20, representing a 3% increase. The company achieved significant gross margin expansion, with reported gross margin increasing 230 basis points to 47.5% and adjusted gross margin increasing 200 basis points to 47.7%.
Wrangler brand global revenue increased 3%, driven by a 14% increase in direct-to-consumer and a 2% increase in wholesale, with the female business growing 40%. Lee brand global revenue decreased 9%, performing as expected. The company ended the quarter with $357 million in cash and $736 million in long-term debt, with inventory down 12% year-over-year.
Kontoor Brands received all required regulatory approvals for the Helly Hansen acquisition, expecting it to close by the end of May 2025. Helly Hansen is projected to contribute approximately $425 million to 2025 revenue and $0.20 to adjusted EPS. The updated full-year 2025 outlook, including Helly Hansen, anticipates revenue between $3.06 billion and $3.09 billion and adjusted EPS between $5.40 and $5.50, despite an estimated $50 million unmitigated impact from new tariffs, which the company plans to offset over 12-18 months.
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