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Kontoor Brands reported on Wednesday that fourth-quarter sales fell 8% to $670 million, with sales hampered by inventory management actions by U.S. retailers, offsetting growth in digital wholesale, China and direct-to-consumer.
The U.S. company said U.S. revenue was $538 million, down 11% from the previous year, as U.S. wholesale business fell 12%. As retailers tightly manage inventory levels, lower wholesale shipments offset growth in digital wholesale and owned physical stores.
International revenue grew 4% to $132 million, an increase of 4%, with both DTC and wholesale businesses growing.
China grew 23%, driven by DTC and wholesale growth, while Europe fell 3% due to lower wholesale.
Wrangler brand global revenue was $461 million, down 9%, Lee revenue fell 6%, reaching US$206 million.
Revenue for the full year ended December 31 The Greensboro, North Carolina-based company said sales fell 1% to $2.61 billion.
“Our U.S. POS results in the fourth quarter exceeded shipments and led to continued market share growth. However, the U.S. wholesale environment is challenging as retailers tightly manage inventory levels in light of uncertain consumer spending patterns , which has had a negative impact on our revenue.” said Scott Baxter, president, CEO and chairman of Kontoor Brands.
“We are pleased with our execution and progress as we further reduced inventory levels, accelerated cash generation and drove strong gross margin expansion and returns on capital.”
Looking forward, the company expects revenue in 2024 to be between US$2.57 billion and US$2.63 billion, a 1% decrease to a 1% increase from the previous year.
Kontoor announces appointments alongside earnings update Mary Campbell was appointed to the Board of Directors, effective immediately. Additionally, the company announced it will increase the size of its board of directors from seven directors to eight.
Campbell is a senior executive with deep knowledge of consumer-driven product innovation, marketing and brand building, traditional and new media platforms, and the long-term growth and development of leadership teams.
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