Wrangler and Lee owner reports flat Q1 revenues "as anticipated"
Kontoor Brands, owner of denim brands Lee and Wrangler, has reported flat revenues of £529 million ($667 million) for Q1 of 2023.
First quarter results, ending 1 April, reveal revenues of £529 million ($667 million), which decreased by 2% (1% in constant currency) compared to the year prior.
Wrangler's global revenue was £335 million ($423 million), up by 3% compared to the year prior. Lee's global revenue was £191 million ($241 million), down by 9 % year-on-year.
Revenue increases, primarily driven by strength in domestic wholesale and DTC, were more than offset by decreases in international wholesale, primarily driven by the continued impacts of COVID-policy changes in China.
The company’s gross margin stood at 43%, down 180 basis points year-on-year. Operating income stood at £75 million ($95 million) in the first quarter.
Moving forward, the company expects full-year 2023 to increase at a low, single-digit percentage compared to the fiscal year 2022, consistent with its prior outlook. Gross margin for the year is expected to be in the range of 43.5% to 44%.
Scott Baxter, President, Chief Executive Officer and Chair of Kontoor Brands, commented: "We delivered first quarter results consistent with our expectations and commentary provided on the fourth quarter earnings call. As anticipated, our brands continued to gain share in the U.S. where POS outpaced shipments in the quarter. Increases domestically were muted by expected softness in International markets. In addition to share gains and positive sell-through, robust performance in our own DTC during the quarter further validates that our brands are connecting with consumers and winning in a challenging marketplace.
"We believe that our increasingly diversified growth across channels, categories and geographies, enabled by strategic investments in DTC, demand creation and data analytics will generate more sustained, profitable growth over time. This gives us confidence in reaffirming our 2023 outlook, despite the uneven backdrop."
