Kontoor Brands, Inc. KTB stated that its decision to initiate a sales process for the Lee business reflects management’s confidence in the long-term opportunities within the Wrangler and Helly Hansen brands. Management emphasized that maintaining strategic focus remains central to the company’s approach, and concentrating resources and capital on growth-oriented brands is expected to help accelerate long-term growth and profitability. The move is also expected to provide greater flexibility in future capital allocation decisions.
Wrangler brand is a cornerstone of consistency, having achieved 16 consecutive quarters of market share gains in bottoms with low single-digit growth over the past three years, with fiscal 2025 marking one of the brand’s strongest performances. Growth has been supported by market share gains in core bottoms and double-digit expansion across female, Western and direct-to-consumer channels. Looking ahead, the company plans to accelerate investments in women’s denim, non-denim categories and digital capabilities, including AI and loyalty initiatives, to support long-term growth.
Helly Hansen continues to represent a significant global growth opportunity, with management expecting the brand to become a larger contributor to future revenue and profitability. The brand remains significantly underpenetrated in the United States. The company plans to accelerate investments across geographic expansion, product development, digital capabilities, retail growth and brand awareness initiatives. Additional focus is being placed on technical outdoor apparel, footwear, along with expanding workwear opportunities.
Overall, by sharpening focus on Wrangler and Helly Hansen, Kontoor Brands aims to accelerate growth, expand margins, strengthen brand positioning and unlock greater long-term value through disciplined investments and strategic capital allocation.
The Zacks Rundown for KTB
Shares of KTB have lost 5.6% in the past three months compared with the industry’s decline of 16.6%.
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From a valuation standpoint, KTB trades at a forward price-to-earnings ratio of 9.42X, lower than the industry’s average of 16.40X. KTB currently carries a Zacks Rank #4 (Sell).
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The Zacks Consensus Estimate for KTB’s current fiscal year earnings has been revised downward to $5.20 per share from $6.46 per share, while the same for the next fiscal year earnings has been revised downward to $5.79 per share from $6.95 per share.
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Stocks to Consider
Some better-ranked stocks have been discussed below:
Vince Holding Corp. VNCE provides luxury apparel and accessories in the United States and internationally. It operates through Vince Wholesale and Vince Direct-to-Consumer segments. At present, the company flaunts a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for VNCE’s current fiscal-year sales implies growth of 4.5%, and the same for earnings implies a decline of 15.9% from the year-ago figures. VNCE has delivered a trailing four-quarter earnings surprise of 647.2%, on average.
Columbia Sportswear Company COLM engages in the design, development, marketing, and distribution of outdoor, active, and lifestyle products in the United States, Latin America, the Asia Pacific, Europe, the Middle East, Africa, and Canada. At present, COLM flaunts a Zacks Rank of 1.
The Zacks Consensus Estimate for COLM’s current fiscal-year sales implies growth of 2.4%, and the same for earnings indicates a decline of 0.8% from the year-ago figures. COLM delivered a trailing four-quarter earnings surprise of 44.1%, on average.
V.F. Corporation ( VFC offers branded apparel, footwear, and accessories for men, women, and children in the Americas, Europe, and the Asia-Pacific. At present, VFC currently sports a Zacks Rank of 1.
The Zacks Consensus Estimate for VFC’s current fiscal-year sales implies a decline of 3.2%, and the same for earnings implies a growth of 10.8%, respectively, from the year-ago figures. VFC delivered a trailing four-quarter negative earnings surprise of 25.9%, on average.
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V.F. Corporation (VFC): Free Stock Analysis Report
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Kontoor Brands, Inc. (KTB): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).