Kontoor Brands ended its 2025 financial year on strong ground.
On Tuesday, the Wrangler, Lee and Helly Hansen parent company reported better-than-expected revenue, earnings and cash generation, driven by the acquisition of Helly Hansen, strong growth in Wrangler and disciplined execution, according to Scott Baxter, Kontoor Brands president, CEO and chairman.
The Greensboro-based company’s Q4 2025 revenue increased 46 percent compared to the prior year to $1.02 billion. This includes a 36-percentage point benefit from the acquisition of Helly Hansen, which was completed in June 2025. Compared to the prior year. adjusted operating income increased 48 percent to $150 million and adjusted EPS increased 26 percent to $1.73 increased 26 percent compared to prior year. Inventory of $567 million decreased $198 million from the third quarter.
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Q4 global revenue for Wrangler was $562 million—a 12 percent increase compared to Q4 2024. In the U.S., the cowboy denim brand’s revenue increased 12 percent, led by a 16 percent increase in direct-to-consumer and an 11 percent increase in wholesale. Wrangler’s international revenue increased 10 percent, driven by a 35 percent increase in DTC and a 6 percent increase in wholesale.
Lee brand global revenue was $198 million and increased 2 percent compared to prior year. Lee’s U.S. revenue increased 9 percent. The brand saw a 9 percent increase in wholesale and an 8 percent increase in DTC. The brand had less success globally. Lee’s Q4 revenue decreased 6 percent. Kontoor said this was due to a decline in wholesale.
Helly Hansen global revenue was $254 million. Sport and Workwear revenue was $194 million and $54 million, respectively. Musto brand revenue was $7 million. U.S. revenue was $68 million and international revenue was $186 million.
Kontoor’s full year 2025 revenue was $3.15 billion, increased 21 percent compared to 2024. Wrangler brand global revenue was up 6 percent to $1.91 billion with DTC sales driving the momentum. Lee brand global revenue was down 5 percent to $750 million.
Helly Hansen global revenue was $475 million for the June through December period.
“In the seven months under our ownership, we have strengthened the leadership team, delivered better-than-expected revenue and earnings accretion, and leveraged our multi-brand platform to drive greater synergies, operational discipline, and cash generation,” Baxter said during the earnings call. “We are bringing a renewed sense of focus to Helly’s strategy while leveraging synergy opportunities to accelerate investments across the organization.”
Denim in focus
2025 was another strong year for Wrangler. The denim bottoms business grew at a mid-single-digit rate during Q4, thanks in part to incremental demand creation investments and activations around events like college football. Collaborations with Filson and Stranger Things also drew attention.
“We expanded market share in our core bottoms business, drove double-digit gains in female, western, and D2C, and invested behind our product assortment to drive greater category and channel diversification,” Baxter said, adding the Bespoke collection is also resonating with consumers.
Having identified growth opportunities that are better aligned with Lee’s refreshed marketing and opportunities to optimize distribution in Europe and Asia, the exec said Lee is positioned for a return to revenue growth in the second half of 2026.
“Lee’s turnaround is progressing, supported by a clearer brand identity, improving consumer perception, and double-digit growth in digital,” he said.
Baxter added that the company “strengthened the identity of the brand, realigned product distribution, launched the most significant equity campaign in years, and elevated consumer perception.”
2026 outlook
Later this year Kontoor will complete Project Jeanius, an initiative that began in 2024 to transform its global operating model and enhance its supply chain.
“Our global sourcing organization has been optimized to drive greater efficiency in our vendor network, our planning teams are driving greater inventory productivity, and our shared operating platform is creating immediate benefits for Helly Hansen,” Baxter said.
However, tariffs continue to weigh on Kontoor’s outlook for 2026. Baxter said the company remains committed to offsetting the impact of the increases in tariffs over a 12 to 18-month period through additional measures such as transferring production within its supply chain, strategic supplier partnership initiatives, inventory management, and other proactive mitigating actions.
The company is evaluating the impact of the recent U.S. Supreme Court ruling on tariffs and the U.S. trade agreement with Bangladesh. Kontoor utilizes U.S.-grown cotton in more than 80 percent of products sourced from Bangladesh which may qualify for a duty exemption under the trade agreement.
“That trade agreement reflected a potential reciprocal tariff ranging from 0-19 percent depending on the U.S.-grown cotton content of products sourced from Bangladesh,” said Joseph Alkire, Kontoor EVP, CFO and global head of operations. “Bangladesh is our largest country of origin from a sourcing perspective. So, by nature, it is also our largest source of tariff pressure.
Revenue is expected to be in the range of $3.4 to $3.45 billion, representing growth of approximately 9 percent compared to 2025. For the first half of 2026, revenue is expected to be in the range of $1.56 to $1.57 billion.
“We are entering 2026 from a position of strength, with sharp strategic clarity and a relentless focus on execution,” Baxter said. “We have the team and platforms in place to drive another year of record revenue and earnings, cash generation, and investment behind our brands.”
