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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