Kontoor Brands Stock Declines As Q2 Revenue Falls Short Of 2019 Levels, Plans $200M Stock Repurchase

Kontoor Brands Inc KTB reported second-quarter FY21 sales growth of 40.6% year-on-year, to $491 million, beating the analyst consensus of $475.54 million.
Q2 revenue decreased 19% compared to adjusted revenue in Q2 of 2019.
Wrangler brand global revenue increased 24% Y/Y to $311 million, and Lee brand global revenue increased 105% Y/Y to $176 million.
The gross margin increased 760 basis points Y/Y to 46.1%.
Operating expenses gained 22.8% Y/Y to $455.6 million.
The operating margin was 7.2%, and operating income for the quarter was $35.2 million. Adjusted operating margin expanded 1,040 basis points to 12.0%.
The company held $175.6 million in cash and equivalents as of June 30, 2021. Cash provided by operating activities for the six months amounted to $120.2 million.
Adjusted EBITDA of $66.9 million rose 433% Y/Y. Adjusted EBITDA margin improved 1,010 basis points to 13.7%.
Adjusted EPS of $0.70 beat the analyst consensus of $0.35.
Kontoor’s Board has authorized a $200 million share repurchase program.
Outlook: Kontoor sees FY21 sales to rise in mid-teens to $2.39 billion - $2.42 billion (prior low-teens), versus the consensus of $2.40 billion.
The company has raised FY21 adjusted EPS guidance to $3.90 - $4.00 (previous $3.70 - $3.80), versus the consensus of $3.87.
Price action: KTB shares are trading lower by 2.28% at $56.62 on the last check Thursday.

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