Kontoor Brands lifts full-year guidance on sales surge thanks to Helly Hansen acquisition

Kontoor Brands announced on Monday sales for the third quarter surged 27 percent to $853 million, thanks to the U.S. denim maker’s recent acquisition of Helly Hansen.

The Greensboro, North Carolina-based company said Wrangler brand revenues rose 2 percent $471 million, with Wrangler U.S. revenue up percent, driven by an 11 percent increase in direct-to-consumer.

Wrangler international revenue increased 6 percent, thanks to 5 percent increase in wholesale and a 12 percent increase in direct-to-consumer sales for the three months ending September 30.

The company’s Lee brand saw sales fall 8 percent to $187 million, with sales impacted by $7 million from inventory management in China, said the company in its update.

Elsewhere, Helly Hansen revenue totalled $193 million, with sport and workwear revenue reaching $143 million and $42 million, respectively. The company acquired the Norwegian outdoorwear brand in February.

For the third quarter, net income fell to $36.94 million, compared to $70.55 million in the prior-year period.

​“Our third quarter results exceeded expectations driven by the strength of our expanded brand portfolio, gross margin expansion, and operational execution,” said Scott Baxter, president, chief executive officer and chairman of the board of directors, Kontoor Brands.

“While a shift in the timing of shipments impacted revenue growth, Wrangler drove another quarter of broad-based growth and market share gains, Helly Hansen delivered better than expected revenue and profitability, and we launched Lee’s first equity campaign in years while improving the health of the marketplace. Based on our stronger year-to-date performance and increased visibility, we are raising our full year outlook and are well positioned to finish a record year with momentum.”

Looking ahead, the company now expects revenue to be at the high end of the prior outlook range of $3.09 to $3.12 billion, up 19 to 20 percent compared to the prior year.