What Happened?
Shares of clothing company Kontoor Brands (NYSE:KTB) fell 15.2% in the morning session after the company reported dissapointing fourth-quarter earnings as full-year revenue and EPS guidance were missed. International revenue dipped slightly, dragged down by weaker wholesale performance in Asia and the Americas, offsetting gains in digital sales.
On the other hand, It was good to see Kontoor Brands beat analysts' EPS expectations this quarter. Overall, this was a weaker quarter.
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What The Market Is Telling Us
Kontoor Brands’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. Moves this big are rare for Kontoor Brands and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 12 months ago when the stock dropped 14.9% on the news that the company reported fourth-quarter results that missed analysts' revenue and EPS expectations. The top line growth continued to decline in absolute terms. The company called out the challenging U.S. wholesale environment as retailers were conservative with their inventory management due to uncertain consumer spending patterns.
Similarly, its full-year revenue guidance missed. To improve its financial profile amidst a challenging demand landscape, the company introduced Project Jeanius, aimed at delivering between $50 million and $100 million in gross profit improvement and SG&A savings, with a portion to be reinvestment in growth projects. Overall, this was a mediocre quarter for Kontoor Brands.
Kontoor Brands is down 12.8% since the beginning of the year, and at $74.16 per share, it is trading 22.5% below its 52-week high of $95.63 from January 2025. Investors who bought $1,000 worth of Kontoor Brands’s shares 5 years ago would now be looking at an investment worth $2,090.
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