Kontoor Brands said total revenue increased to $616m for the second quarter ended 1 July 2023 from $613.6m last year.
The company says revenue increases were primarily driven by strength in DTC and International and were somewhat tempered by decreases in US wholesale.
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Operating income fell 29% to $63.4m on a reported basis as opposed to $88.8m in the previous year.
This was attributed to the offsetting of benefits from the geographic mix, moderating transitory costs such as air freight, tight expense controls, and strategic pricing by higher inflationary pressures on input costs, as well as, impacts from proactive actions in managing internal production, including downtime.
While the net income was $36.4m, a drop of 41% in comparison to last year.
Baxter believes that investment in the brand helped drive continued share gains in the core US wholesale business.
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By GlobalDataHe explains: “Solid performance in accretive areas such as DTC and International during the quarter further validates that our brands are resonating globally with consumers, despite the challenging landscape.”
Scott says the restructuring actions undertaken in the quarter to reduce non-strategic spending and drive efficiencies in operations, will help fund strategic investments in key growth pillars such as talent, innovation, technology and demand creation.
However, he adds that macroeconomic pressures will weigh on consumer demand in the second half of 2023 but seeing the shipments better align with POS in the US gives Kontoor Brands confidence that third-quarter revenue should deliver “outsized growth” relative to full-year guidance.
