Kontoor to ‘simplify’ operating model to boost profits
Kontoor Brands, the owner or Wrangler and Lee, will “simplify and transform processes, systems and its global operating model” as a result of a 1% drop in revenues in 2023.
A new initiative, Project Jeanius, will “reduce operating complexity and integrate the business across global shared services. The initiative will improve speed to market and agility, and leverage advanced data analytics to enhance business insights and decision making”.
The group expects to realise between $50 million and $100 million of gross profit improvement and expenses savings, a portion of which will be reinvested into the business.
Kontoor CEO Scott Baxter said: “This is one of the most important steps we have taken as a public company and will transform our organisation from the legacy structure required at the spin to a best-in-class global multi-brand platform, while unlocking significant sources of capital. With our strong leadership team in place, we are able to take this step from a position of strength, and I am confident this will deliver the next chapter of Kontoor’s value-creation journey.”
Full year revenues for 2023 reached $2.61 billion. Reported earnings per share of $4.06 compared with $4.31 in the prior year. Through a combination of share repurchases and dividends, the company returned a total of $139 million to shareholders during 2023.
Wrangler revenue was $1.75 billion, flat compared to the prior year but supported by growth in outdoor, non-denim bottoms and female.
Lee revenue was $843 million, a 4% decrease compared with 2022 due to “retailer inventory management actions”.
For financial year 2024, it expects revenue in the range of $2.57 billion to $2.63 billion.
Photo: Wrangler’s recent collaboration with Mattel’s Barbie
