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KTB NYSE· Kontoor Brands Inc.
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KTB NYSE· Kontoor Brands Inc.
Earnings report Q4 2023

KTB Reports Slight Decrease in Revenue for Latest Quarter

Segments of Revenue

Kontoor Brands, Inc. reported net revenues of $2.61 billion for the latest quarter. The breakdown of revenue by segment is as follows:

  • Revenues in the Non-U.S. Americas region increased by 8%, driven by higher sales in Canada.
  • The APAC region experienced a 1% decrease in revenues, primarily due to a decline in the wholesale business.
  • Revenues in the EMEA region decreased by 4%, mainly attributable to a decline in the digital wholesale business. However, this decline was partially offset by a 2% favorable impact from foreign currency and an increase in retail store sales.

Strengths

Despite the slight decrease in overall revenue, KTB showcased several strengths in its latest quarter. The company's Non-U.S. Americas region saw a significant increase in sales, particularly in Canada. This indicates a strong consumer demand for KTB's brands in this market. Additionally, KTB's proactive inventory management actions and pricing adjustments helped mitigate the impact of higher inventory costs due to inflationary pressures on product and input costs. These measures, along with reduced use of air freight and favorable channel and product mix, contributed to maintaining a solid operating margin of 17.5%.

Challenges

KTB faced some challenges in its latest quarter. The APAC region experienced a decrease in revenues, primarily driven by a decline in the wholesale business. This suggests a need for the company to address and improve its wholesale operations in this region. Furthermore, the EMEA region also saw a decline in revenues, mainly due to a decline in the digital wholesale business. KTB should focus on strategies to revitalize its digital wholesale operations and drive growth in this segment.

Noteworthy

It is worth noting that KTB's selling, general, and administrative expenses as a percentage of revenues decreased slightly to 29.5% compared to the previous year. This indicates effective cost management and operational efficiency. However, the company's net income decreased by 6% to $231.0 million compared to the previous year, and diluted earnings per share also declined from $4.31 to $4.06. These decreases in profitability highlight the need for KTB to address the challenges it faced in certain regions and work towards improving its overall financial performance.

Summary

Kontoor Brands, Inc. reported a slight decrease in revenue for the latest quarter. While the company experienced growth in the Non-U.S. Americas region, it faced challenges in the APAC and EMEA regions. KTB showcased strengths in proactive inventory management, pricing adjustments, and operational efficiency. However, the decline in net income and diluted earnings per share emphasizes the need for KTB to address the challenges it faced and focus on driving growth in all segments.

Source documents

Form 10-K  filed on Feb 28, 2024
21 pages scanned

Reference data

Company financials Q4 revenue 670M
Analyst estimates Q4 EPS beat by 7.68%
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