The following is a summary of the Kontoor Brands, Inc. (KTB) Q4 2023 Earnings Call Transcript:
Financial Performance:
Kontoor Brands reported a decrease in global revenue by 9%, and full-year revenue decreased by 1% due to a slowdown in POS and reduction of inventory levels.
Despite the revenue shortfall, gross margin expanded by 120 basis points in H2 2023, and operating income increased 5%.
Adjusted gross margin expanded by 230 basis points in Q4 2023 and Adjusted earnings per share was $1.28, a 54% increase from the previous year.
The business ended the year with net debt of $569 million and cash on hand of $215 million.
The company returned a total of $139 million to shareholders during the year, and it has initiated a new $300 million repurchase program.
For 2024, the company expects revenue between $2.57 billion and $2.63 billion, gross margin between 44.2% and 44.4%, and EPS between $4.65 and $4.75.
Business Progress:
Kontoor Brands is executing Project Jeanius aimed at creating investment capacity and driving growth, expecting run-rate savings between $50 million and $100 million starting Q4 2024.
In 2023, the company saw growth in direct-to-consumer (11%), female business (5%), and non-denim bottoms business (10%).
Wrangler's outdoor business grew by 11%.
The company is looking to diversify the brands and channel distribution, with Project Jeanius aiding in these endeavors.
The company plans to relaunch Denim in the third quarter of 2024 and launch the significant innovation, Lee-X, later in the year.
The company continues to expand in the APAC region and plans to invest in new e-commerce technologies and revamp over 70% of their China store fleet over the next 2 years.
More details: Kontoor Brands IR
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