Kontoor Brands Raises Full-Year Earnings Forecast
The apparel company lifted its fiscal 2026 adjusted earnings outlook after completing the sale of its Lee brand.
Updated on Nov. 9, 2026 in Corporate Finance
Kontoor Brands raised its fiscal 2026 adjusted earnings per share forecast to $5.40 following its third-quarter results. The company also completed the divestiture of Lee for $698 million in net proceeds.
Why it matters
The raised outlook and debt-reduction plans reflect a company refocusing on its Wrangler and Helly Hansen brands after exiting Lee. The forecast gives investors a clearer view of earnings power for the year ahead.
Q3 adjusted diluted EPS rose 40 percent to $1.50 while revenue from continuing operations grew 3 percent to $685 million, and the company posted a $34 million net loss tied to a non-cash tax charge. The raised FY26 adjusted EPS forecast of $5.40 is measured against Kontoor's own prior guidance, and the extraction does not specify the tax charge's effect on future periods.
The players
Kontoor Brands
Kontoor Brands is an apparel company that owns the Wrangler and Helly Hansen brands and divested the Lee brand during the period covered.
The details
Kontoor Brands reported third-quarter revenue from continuing operations of $685 million, with Wrangler and Helly Hansen each growing 3 percent. Adjusted gross margin rose 230 basis points to 48.1 percent, benefiting from Project Jeanius and favorable pricing, while the company plans to repurchase $450 million of common stock in the fourth quarter.
Timeline
October 3, 2026: Third fiscal quarter ended.
Fourth quarter 2026: Planned $280 million term-loan payments and $450 million stock repurchase.
Year-end 2026: Targeted net leverage ratio below 1.5 times.
2027: Expected adjusted EPS of at least $6.60.
Market Dynamics
Kontoor's completed sale of Lee, which generated $698 million in net proceeds, marks the company's shift toward a two-brand portfolio centered on Wrangler and Helly Hansen. The raised FY26 forecast and planned $450 million buyback reflect how the company is redeploying those proceeds within that narrower structure.
Investors holding Kontoor Brands shares may see the raised $5.40 EPS outlook and planned $450 million buyback as factors shaping share value through year-end. The company's targeted net leverage ratio below 1.5 times by year-end 2026 indicates a debt-reduction priority that retail and institutional holders can track in future filings.
The takeaway
Companies that divest a major brand often redirect proceeds toward buybacks and debt reduction, and Kontoor's fourth-quarter plans follow that pattern. Investors can monitor whether the targeted net leverage ratio below 1.5 times is reached by year-end 2026.
What happens next
Kontoor Brands expects to make $280 million in term-loan payments and a $450 million stock repurchase in the fourth quarter of 2026.
Further reading
Explore more on Corporate Finance to see how companies manage divestitures and share buybacks.
