US Revenue Up, International Revenue Down, and EBITDA Decreases
- Kontoor Brands reports a 2% decline in sales to $667m (£528m) in Q1
- US revenue increased by 2% to $518m (£410.8m)
- Wrangler global revenues up 3% to $423m (£335.4m)
- Lee revenues down 9% to $24m (£19m)
- International revenue decreased by 14% to $149m (£118m)
- EBITDA of $102m (£80.8m) with a 15.3% decrease compared to the prior year
- Q1 gross margin at 43%, down 180 basis points from Q1’22 due to geographic mix and inflationary pressures
- FY23 revenue expected to increase in low-single digits, gross margin range of 43.5% to 44.0%
- CEO Scott Baxter remains confident in outlook despite macroeconomic challenges
Kontoor Brands, the maker of Lee and Wrangler denim brands, has reported a 2% decline in sales to $667m (£528m) during Q1 ended 1 April 2023. Despite a 14% decrease in international revenue to $149m (£118m), US revenues increased by 2% to $518m (£410.8m). Wrangler global revenues jumped 3% to $423m (£335.4m) while Lee revenues fell 9% to $24m (£19m). The company achieved an EBITDA of $102m (£80.8m), marking a 15.3% decrease compared with the prior year. Its Q1 gross margin of 43% decreased by 180 basis points compared to Q1’22 due to geographic mix and inflationary pressures on product costs. However, it anticipates FY23 revenue to increase in a low-single digit percentage and gross margin to be in the range of 43.5% to 44.0%, consistent with prior outlook. CEO Scott Baxter remains confident in the outlook despite macroeconomic challenges.
Factuality Level: 8
Factuality Justification: The article provides accurate and objective information about Kontoor Brands’ financial performance, including sales figures, revenue breakdown by brand and region, EBITDA, and outlook for the future. It also includes relevant quotes from the company’s CEO. The information is presented in a clear and concise manner without any apparent bias or exaggeration.
Noise Level: 4
Noise Justification: The article provides relevant information about Kontoor Brands’ financial performance and the impact of Covid-policy changes in China on its international wholesale market. It also includes the company’s outlook for the future. However, it lacks a deep analysis or exploration of long-term trends or consequences of decisions. The language used is not overly sensationalized but does not offer actionable insights or new knowledge beyond reporting financial results.
Financial Relevance: Yes
Financial Markets Impacted: Kontoor Brands’ financial performance impacts the company’s stock value and investor sentiment.
Financial Rating Justification: The article discusses Kontoor Brands’ financial performance, including sales decline, revenue changes by brand and region, EBITDA, and gross margin. It also mentions the company’s outlook for future growth and its impact on investors.
Presence Of Extreme Event: No
Nature Of Extreme Event: Other
Impact Rating Of The Extreme Event: Minor
Extreme Rating Justification: The article discusses a decline in sales and financial impacts due to Covid-policy changes in China, but it does not mention an extreme event in the last 48 hours.
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