Wrangler, Lee Parent Kontoor Brands' Q3 Earnings Surpass Street View, Lifts FY21 Outlook

Kontoor Brands Inc KTB reported third-quarter FY21 sales growth of 11.8% year-on-year, to $652.3 million, beating the analyst consensus of $615.38 million.
The revenue increase was driven by strength in Digital, including own.com and digital wholesale, improved performance across the U.S. wholesale business, and positive trends in international markets.
Revenue in the U.S. increased 8% Y/Y, and International revenue rose 25%.
Wrangler brand global revenue increased 22% Y/Y, and that of Lee grew 6%.
Adjusted EPS of $1.28 beat the analyst consensus of $1.03.
The adjusted gross profit margin for the quarter expanded 80 basis points Y/Y to 44.1%. The operating margin was 13.2%, and operating income for the quarter rose 4% to $85.9 million.
Kontoor Brands held $215 million in cash and equivalents as of October 2, 2021. Cash provided by operating activities for the nine months totaled $209.3 million.
Outlook: Kontoor Brands has raised the FY21 sales outlook to increase at a high-teens percentage, to $2.47 billion - $2.48 billion (prior guidance mid-teens percentage), above the consensus of $2.43 billion.
The company raised FY21 adjusted EPS outlook to $4.15 - $4.20 (prior view $3.90 - $4.00), above the consensus of $4.12.
Price Action: KTB shares traded higher by 1.31% at $57.67 on the last check Thursday.

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