Reducing inventory key for Kontoor
06/11/2023
Despite a “challenging macroenvironment” and high inventory levels, the owner of Wrangler and Lee expects full year revenues to be 1% higher than last year.
Increases were driven by strength in US, partially offset by decreases in China.
During the quarter, Wrangler brand global revenue was $445 million, a 9% increase. Lee global revenue was $208 million, a 5% increase.
Kontoor CEO Scott Baxter said: “While we continue to anticipate a challenging macroenvironment, we expect our investments in innovation and demand creation to further cement competitive separation in the marketplace and fuel the continued momentum of our brands. We are prudently managing our inventory and are focused on reducing inventory levels further as we establish an even stronger foundation for next year. “
Late in the third quarter of 2023, management identified inaccuracies in processing certain transactions with US Customs and Border Protection, resulting in underpayment of duties owed to US Customs for the 2021 to 2023 periods. The current period results include an additional $13 million duty charge related to this.
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