Kontoor reported strong Q2 2025 results driven by better-than-expected organic revenue growth, gross margin expansion, operating efficiency and cash generation and an unexpectedly strong performance from its newest acquisition, Norwegian performance brand Helly Hansen.
Kontoor’s revenue for the second quarter increased 8 percent to $658 million compared to prior year. Second-quarter results include the contribution from Helly Hansen, which closed on May 31.
Following a strong first half and increased clarity around its tariff mitigation strategies, the company is raising its full-year outlook. Revenue is now expected to be in the range of $3.09 to $3.12 billion, representing growth of approximately 19 to 20 percent compared to the prior year. This compares to the prior outlook of 17 to 19 percent growth.
Related Stories
Additionally, Kontoor now expects Helly Hansen to contribute approximately $455 million to 2025 revenue, compared to the prior outlook of $425 million.
The company’s outlook assumes a 30 percent reciprocal tariff on China and a 20 percent reciprocal tariff on all other sourcing countries, except for Mexico. Kontoor’s imports from Mexico to the U.S. remain exempt under USMCA. A combination of targeted price increases, sourcing and production optimization within its global supply chain, inventory management, supplier partnerships and other initiatives will be employed to “substantially offset” the impact from recently enacted increases in tariffs over a 12-to-18-month period.
“To support our momentum, we are making incremental demand creation investments to fuel accelerating revenue growth and continued market share gains,” said Scott Baxter, Kontoor Brands president, CEO and chairman. “While we will continue to manage the business prudently in light of the environment, the third quarter is off to an encouraging start, and we enter the second half of the year from a position of strength.”
In Q2, Wrangler brand global revenue was $461 million and increased 7 percent compared to prior year. The heritage brand’s U.S. revenue increased 9 percent, driven by an 8 percent increase in wholesale and a 16 percent increase in D2C, including an 18 percent increase in digital. However, international revenue decreased 4 percent compared to prior year, driven by a 5 percent downturn in wholesale partially offset by a 4 percent increase in D2C.
“Wrangler has had an excellent first half of the year,” Baxter said, adding that Wrangler saw its 13 consecutive quarter of market share gains as measured by Circana in its men’s and women’s bottoms business. The Western business grew mid-single digits, combined with strength in Wrangler’s core denim. Additionally, he said Wrangler’s female business continues to surpass expectations, and the brand is now in “chase mode” for many styles.
Lee continues to be a brand in transition. Global revenue decreased 6 percent to $166 million compared to prior year, though the results were consistent with expectations. In the U.S., revenue decreased 5 percent driven by a 7 percent decrease in wholesale partially offset by a 3 percent increase in D2C. Lee international revenue decreased 6 percent driven by an 11 percent decrease in wholesale partially offset by a 3 percent increase in D2C.
Kontoor will roll out the first brand equity campaign for Lee in over a decade in September. Built on Lee’s authority in denim, the campaign will be supported by strong product, followed by enhanced distribution. Baxter said the campaign speaks to the strength and quality that has defined Lee for more than 135 years, reimagined for a younger generation of consumers. “Test results have been very encouraging, and we are excited to bring the new vision to life ahead of the holiday season,” he added.
Helly Hansen global revenue was $29 million for the month of June. Sport and Workwear revenue was $17 million and $9 million, respectively. Musto brand revenue was $3 million. U.S. revenue was $5 million and international revenue was $24 million.
The company is creating an “investment roadmap” to accelerate Helly Hansen’s growth. “We see significant opportunities in the U.S. through a combination of wholesale and retail expansion, as well as investments in product innovation, category expansion and demand creation to increase brand awareness,” Baxter said.
With Helly Hansen being under penetrated in key accounts, he said Kontoor is developing plans to unlock new channels of distribution starting in 2026. Product and category expansion is another significant opportunity. In the near term, Baxter said the brand will expand its lightweight and cooling platforms to increase penetration in southern climates. The company also plans to capitalize on its position as a leading brand in ski and sailing to grow Helly Hansen’s outdoor segment. “We think that consumer all kind of navigates to the same area and shops in a very similar pattern. You’ll see us in some of the more outdoor specialty opportunities,” Baxter said.
Workwear is another category of Helly Hansen’s business with a long runway for growth, especially in the U.S. where it has minimal impact. Baxter said the company aims to scale growth across three strategic categories—construction, high visibility and footwear—with a good, better, best framework. “We think there’s incredible innovation in the workwear business globally that we haven’t seen here in the United States, and Helly is going to allow us to go ahead and bring that into this huge workwear environment in a pretty significant way,” he said.
