Kontoor Brands, Inc. reported its financial results for the third quarter and the nine months ended September 2024, highlighting a mixed performance amid challenging macroeconomic conditions. For Q3 2024, net revenues reached $670.2 million, a 2% increase from $654.5 million in Q3 2023. The U.S. Wholesale segment saw a 5% rise, contributing $482.6 million, while Non-U.S. Wholesale revenues declined by 7%. Direct-to-Consumer revenues increased by 3%, reflecting growth in e-commerce.
For the nine months ended September 2024, total revenues decreased by 2% to $1.9 billion from $1.94 billion in the same period last year. The decline was primarily driven by a 6.2% drop in revenues from the Lee® brand, which totaled $597.1 million, while Wrangler® revenues remained relatively stable at $1.3 billion.
Operating income for Q3 2024 improved to $98.3 million, up from $85.5 million in Q3 2023, while for the nine months, it rose to $258.0 million from $243.8 million. Net income for Q3 2024 was $70.5 million, a 19% increase compared to $59.5 million in Q3 2023. For the nine months, net income increased to $181.8 million from $162.2 million. Earnings per share (diluted) for Q3 2024 were $1.26, up from $1.05 in the prior year.
The company’s gross margin for Q3 2024 improved to 44.7%, a 320 basis point increase from the previous year, attributed to favorable product costs and a better channel mix. However, selling, general, and administrative expenses rose to 30.0% of net revenues, up from 28.4% in Q3 2023, driven by increased incentive compensation and investments in the direct-to-consumer business.
Kontoor Brands faced challenges from elevated interest rates, fluctuating foreign currency exchange rates, and supply chain disruptions, although these did not significantly impact Q3 results. The company recorded restructuring charges of $2.1 million in Q3 2024 and $10.1 million for the nine months, compared to $7.8 million in the same period last year.
As of September 2024, Kontoor had cash and cash equivalents of $269.4 million, up from $77.8 million a year earlier. The company repaid $40 million of its Term Loan A during the nine months, maintaining compliance with its credit agreement covenants. Additionally, the Board of Directors declared a quarterly cash dividend of $0.52 per share, payable in December 2024.
About Kontoor Brands, Inc.
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