Kontoor Brands sees 7% decline in Q3
US denim group Kontoor Brands has reported revenue of $607 million for the third quarter (Q3) ended October 1.
The figure represents a year-on-year decline of 7%, which the company attributed to “significant US retailer inventory rebalancing efforts” and pandemic-related lockdowns in China.
US revenue versus the year previous reduced across both the Lee and Wrangler brands, it said, down 8% overall to $452 million. Lee’s US revenue dropped 19% year on year, whereas Wrangler declined 5% in same market over the comparative three-month period.
International (ie, non-US) revenue streams, meanwhile, contributed $154 million to the total, a year-on-year decrease of 3%. Significantly, the group’s Chinese business declined by 24%, although this was an improvement on the 50% drop-off experienced during the second quarter. Lee’s international revenue was hit with a 6% decrease over the previous year, while Wrangler was up 3%.
“We expect challenging global macroeconomic conditions, particularly inflation, should continue to weigh on consumer discretionary spend and [that] ongoing inventory reduction actions will pressure near-term margins,” commented company president, chief executive and chair Scott Baxter.
Kontoor Brands does forecast an acceleration during the fourth quarter, however, Mr Baxter added, driven in part by expected improvements to US retail inventory levels.
Image: Lee Jeans via Instagram.
