Wrangler’s international direct-to-consumer sales surge 25%, while Helly Hansen workwear grows 5%; $698 million Lee divestiture proceeds underpin a $450 million share-repurchase plan.


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Kontoor Brands delivered 3% revenue growth in the third quarter of 2026, powered by continued performances from its two core brands, Wrangler and Helly Hansen, as the company completed the divestiture of Lee and strengthened its earnings outlook.

Revenue from continuing operations reached $685 million for the quarter ended October 3, 2026, with both Wrangler and Helly Hansen recording 3% growth. Adjusted earnings per share (EPS) rose 40% year on year to $1.50, while adjusted gross margin expanded 230 basis points to 48.1%.

The results highlight the contribution of Wrangler’s denim-led business and Helly Hansen’s sport and workwear categories, alongside stronger direct-to-consumer (DTC) momentum in key markets.

Wrangler: International DTC leads market performance

Wrangler generated $485 million in global revenue, up 3% from the corresponding quarter last year.

The United States remained its largest reported market, with revenue increasing 2%. However, DTC was the stronger channel, rising 7%, compared with 2% growth in wholesale.

Internationally, Wrangler revenue advanced 6%, supported by a 25% surge in DTC sales and a 4% increase in wholesale. The performance points to growing traction for the brand's consumer-facing business outside the United States.

The contrast between international and US channel growth makes DTC a particularly important element of Wrangler’s quarterly performance.

Helly Hansen: Workwear outpaces sport

Helly Hansen also delivered 3% global revenue growth, reaching $191 million.

Its sport business, the larger of the two reported categories, generated $147 million, up 2%. Workwear revenue increased 5% to $44 million, demonstrating stronger growth than the sport segment.

The figures underline the contribution of both technical sport products and workwear to Helly Hansen’s performance, with workwear providing the stronger category growth during the quarter.

Margins and earnings strengthen

Kontoor’s adjusted gross margin rose 230 basis points to 48.1%, reflecting benefits from Project Jeanius, favourable business mix and pricing, net of changes in product costs.

Adjusted operating income increased 6% to $101 million, with an adjusted operating margin of 14.7%, up 40 basis points.

Reported diluted EPS, however, was a loss of $0.62, reflecting a $1.73 non-cash tax charge associated with the migration of Helly Hansen intellectual property. On an adjusted basis, EPS reached $1.50, up 40%.

Lee sale reshapes portfolio and capital allocation

Kontoor completed the divestiture of Lee, receiving $698 million in net proceeds. The transaction leaves the company focused on Wrangler and Helly Hansen, two brands management believes offer stronger growth profiles.

The company plans to repurchase $450 million of its shares in the fourth quarter, including $400 million through an accelerated share repurchase programme. It also expects to return approximately $1 billion to shareholders in 2026 through share repurchases, dividends and voluntary debt payments.

Outlook: 2026 and 2027 earnings expectations rise

Kontoor raised its full-year 2026 adjusted EPS outlook to $5.40, representing approximately 31% growth year on year. Revenue is expected to reach around $2.68 billion, approximately 12% higher than the previous year, while adjusted gross margin is projected at 50.0%–50.2%.

For 2027, the company expects adjusted EPS of at least $6.60, implying growth of more than 20%, alongside operating cash flow of at least $325 million.

The company is also monitoring the potential impact of the reciprocal trade framework between the United States and Bangladesh. Kontoor says more than 80% of its products sourced from Bangladesh use US-grown cotton, which may qualify for duty exemption under the framework.

With Lee now outside the continuing portfolio, Kontoor’s next growth phase will depend on sustaining Wrangler’s international and DTC momentum, expanding Helly Hansen’s sport and workwear businesses, and converting improved margins into stronger earnings.