Shares of lifestyle apparel company Kontoor Brands, Inc. (KTB) have declined 15.6% so far this year. Its brand portfolio includes two well-known names – Lee and Wrangler. Kontoor’s recent fourth-quarter performance was a mixed bag with top-line lagging estimates.
Revenue increased 3% year-over-year to $681 million but fell short of analysts’ estimates by $5.3 million. Earnings per share at $0.88, on the other hand, came in ahead of consensus by $0.11. The growth in its top-line came from strength in Digital own.com, and growth in the company’s wholesale business as well as international markets.
Looking ahead, Kontoor sees 2022 revenue at ~$2.7 billion and GAAP EPS to be in the range of $4.65 to $4.75. Amid the present global developments, Kontoor noted, it does not have direct or owned business in Russia or Ukraine. Only a small number of Kontoor’s third-party distributors and licensees function in these countries.
With these developments in mind, let us take a look at the changes in Kontoor’s key risk factors that investors should know.
Risk Factors
According to the TipRanks Risk Factors tool, Kontoor’s top risk category is Finance & Corporate, contributing 12 of the total 42 risks identified for the stock, compared to a sector average of 11 risk factors under the same category.
However, in its recent report, the company has added one key risk factor under the Production risk category.
Kontoor highlighted that it has experienced shipping delays, and increased transportation costs due to supply chain and shipping disruptions. The company expects to continue to experience these challenges amid the COVID-19 pandemic.
With prolonged supply chain disruptions affecting Kontoor, its manufacturing partners and vendors could interrupt the company’s manufacturing, resulting in longer production lead times, increased raw material and product costs, and impact Kontoor’s ability to satisfy customer demand. These factors could mean lost sales and adversely impact Kontoor’s business and financials.
Hedge Fund Activity
According to TipRanks data, Wall Street’s top hedge funds have increased holdings in Kontoor by 22.3 thousand shares in the last quarter, indicating a positive hedge fund confidence signal in the stock based on activities of 4 hedge funds. Notably, Chuck Royce’s Royce & Associates has a holding worth ~$1.16 million in Kontoor.
Download the TipRanks mobile app now
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Read full Disclaimer & Disclosure
Related News:
Asana Posts Lower-than-Feared Q4 Loss; Shares Crash on Mixed Outlook
Bumble Rises 18% After-Hours Despite Weaker-Than-Expected Q4 Results
Dick’s Sporting Goods’ Q4 Results Surpass Expectations
