Kontoor Brands is raising its full year outlook to reflect stronger revenue and earnings growth, accelerating cash generation, and the scaling benefits from Project Jeanius—the company’s three-year plan to transform its global operating model—as well as enhance and optimize its supply chain.
Revenue is now expected to be at the high end of the prior outlook range of $3.09 to $3.12 billion, representing growth of approximately 19 to 20 percent compared to the prior year.
“We expect the near-term environment to remain dynamic, but I am confident our strong fundamentals, operational execution, and increasing capital allocation optionality will continue to drive strong value creation for our shareholders,” said Scott Baxter, Kontoor Brands president, CEO and chairman of the board of directors.
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The forecast assumes a 30 percent reciprocal tariff on China and a 20 percent reciprocal tariff on all other countries from which Kontoor sources product, except for Mexico, consistent with the prior outlook. Greensboro, N.C.-based company continues to expect to substantially offset the impact from recently enacted increases in tariffs over a 12-to-18-month period through a combination of targeted price increases, sourcing and production optimization within its global supply chain, inventory management, supplier partnerships and other initiatives.
“Pricing has been part of a holistic strategy to combat the impact of the tariffs. Right pricing for us went into effect mid-June for DTC and in July at wholesale,” said Joe Alkire, Kontoor Brands EVP and chief financial officer.
Q3 2025 revenue was $853 million—a 27 percent increase compared to prior year.
While a shift in the timing of shipments for some key accounts impacted revenue growth by 3 points, Wrangler drove another quarter of broad-based growth and market share gains. The heritage denim brand’s quarterly revenue increased 2 percent to $471 million.
Wrangler U.S. revenue increased 1 percent, driven by an 11 percent increase in direct-to-consumer. U.S. wholesale was flat compared to prior year because of the timing shift. Wrangler international revenue increased 6 percent compared to prior year, driven by a 5 percent increase in wholesale and a 12 percent increase in direct-to-consumer.
Q3 marks Wrangler’s 14th consecutive quarter of share gains. The brand’s core men’s and women’s bottoms business gained 80 basis points of market share, according to Circana.
“This has been a banner year for our female business, and we expect double digit growth for the year,” Baxter said. Wrangler’s collaboration with country music superstar Lainey Wilson continues to exceed expectations by supporting more premium AUR and increasing penetration with younger consumers. The brand’s Bespoke collection—a line of jeans with superior stretch and shape retention—is now the number one female style at specialty retailers.
Additionally, the brand’s Western business is gaining momentum. Baxter said the segment grew “high single digits” in Q3 and is on track for double digit growth this year. “To support this momentum, we will continue to invest behind our demand creation platforms, including live sports, streaming and social media,” he said.
Kontoor remains optimistic that Lee’s first equity campaign in years will improve the brand’s position in the market. Lee brand global revenue was $187 million—down 8 percent compared to prior year. Revenue in the quarter included a $7 million impact from proactive inventory management actions in China. Lee U.S. revenue decreased 9 percent driven by an 11 percent decrease in wholesale partially offset by a 15 percent increase in digital. Lee international revenue decreased 5. A 7 percent decrease in wholesale was partially offset by an 8 percent increase in brick-and-mortar.
Lee is seeing success with new collaborations. Baxter said the partnership with Crayola is “Lee’s strongest collaboration ever” and a second collection with Buck Mason is outperforming the initial launch. “Importantly, our 2025 collabs are attracting three-times more millennial purchasers. While the lead turnaround will not be linear, we will do this the right way. We expect sequential improvement in the fourth quarter,” he said.
Helly Hansen global revenue was $193 million. Sport and workwear revenue was $143 million and $42 million, respectively. Musto brand revenue was $7 million. U.S. revenue was $40 million and international revenue was $153 million.
The company aims to improve Helly Hansen brand awareness in the U.S., which is currently just 29 percent. In 2026, Baxter said Kontoor will be making investments in “top funnel demand creation” to drive awareness and fuel growth, particularly in workwear.
Kontoor’s actions to mitigate tariff-related costs impacted inventory. Excluding Helly Hansen, the company’s Q3 inventory was $560 million, a 21 percent increase compared to prior year driven by a temporary increase in inventory to support the company’s Project Jeanius-related supply chain transformation, earlier than expected receipts of inventory because of improved lead times across the supply chain, and the impact of tariffs.
In Q3, Kontoor closed its Torreon manufacturing facility in Mexico as part of Project Jeanius, and it carried excess inventory to support the operational transition. That excess inventory is expected to wind down over the course of Q4. The company expects total inventory in the fourth quarter of approximately $645 million, representing a decrease of approximately $120 million from the third quarter.
