Kontoor Brands (KTB) AI Stock Analysis

• Market Cap: $3.58B
• Dividend Yield: 2.95%
• Average Volume (3M): 712.32K
• Price to Earnings (P/E): 14.5
• Beta (1Y): 0.83
• Revenue Growth: 1.19%
• EPS Growth: 3.19%
• Country: US
• Employees: 13,200
• Sector: Consumer Cyclical
• Sector Strength: 60
• Industry: Apparel - Manufacturers
• EPS (TTM): 1.20
• Shares Outstanding: 55,326,050
• 10 Day Avg. Volume: 636,232
• 30 Day Avg. Volume: 712,322
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.46
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 4.50
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $81.00
• Price Target Upside: 18.18% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

Kontoor Brands is performing well with strong cash flow and strategic growth initiatives, including the acquisition of Helly Hansen. Positive earnings call sentiment and financial stability are key strengths, though technical indicators suggest caution due to potential overbought conditions and recent price trends. The stock is moderately valued, with a reasonable dividend yield, supporting its attractiveness to income-focused investors.

Positive Factors

Acquisition Benefits

The acquisition of Helly Hansen is expected to add significant revenue with favorable financing terms, enhancing overall financial performance.

Debt Management

Kontoor Brands plans to pay down debt using free cash flow, indicating financial stability and strategic management.

Financial Performance

Project Jeanius is projected to generate significant cost savings and improve Kontoor Brands' financial performance through operational efficiencies.

Negative Factors

Brand Challenges

The Lee brand experienced softness in the fourth quarter and is expected to remain under pressure due to wholesale challenges.

Synergy Realization

Slower-than-expected synergies from Helly Hansen and weaker organic growth could result in less favorable financial outcomes for Kontoor Brands.

Tariff Risks

The potential reintroduction of a 25% tariff on goods sourced in Mexico poses a significant risk, equating to an unmitigated headwind of $50M or $0.70 in EPS.

Kontoor Brands Business Overview & Revenue Model

Company Description

Kontoor Brands, Inc. (KTB) is a global lifestyle apparel company, specializing in the design, manufacture, and distribution of high-quality denim and apparel products. The company operates predominantly in the apparel and retail sectors, focusing on iconic brands such as Wrangler and Lee. Kontoor Brands is committed to delivering innovative and sustainable clothing solutions, offering a wide range of apparel that includes jeans, casual wear, and workwear.

How the Company Makes Money

Kontoor Brands generates revenue through the design, production, and sale of its apparel products under the Wrangler and Lee brands. The company primarily sells its products through wholesale channels, which include major retailers and department stores globally, as well as through its direct-to-consumer operations, which encompass brand-specific e-commerce platforms and retail stores. Key revenue streams include the sale of denim products, casual wear, and workwear. Kontoor Brands focuses on maintaining strong relationships with retail partners and enhancing its digital presence to drive sales growth. Additionally, the company leverages its brand heritage and ongoing innovation in product development to appeal to a broad consumer base, supporting its revenue generation efforts.

Kontoor Brands Financial Statement Overview

Summary

Kontoor Brands exhibits financial stability with strong cash flow capabilities and consistent profitability, albeit with slight revenue fluctuations. The balance sheet shows a prudent approach to debt, though a higher equity ratio could enhance financial flexibility. The company is well-positioned in the apparel industry with a solid financial foundation.

Income Statement

Kontoor Brands shows a consistent gross profit and EBIT margin, with slight fluctuations in net profit margin. The revenue growth is stable, indicating a robust business model. However, there was a minor decline in revenue in 2022. The company maintains healthy EBITDA margins, which are crucial for maintaining operations in the apparel industry.

Balance Sheet

The company has a moderate debt-to-equity ratio, indicating a balanced approach to leveraging. The return on equity has improved over the years, showing effective management of shareholder funds. The equity ratio suggests a lower reliance on equity financing, which could be a risk if not managed carefully.

Cash Flow

Kontoor Brands has demonstrated strong free cash flow growth, underscoring its ability to generate cash efficiently. The operating cash flow to net income ratio is healthy, indicating good cash conversion. Despite fluctuations in financing cash flow, the company maintains a solid cash flow position, which is vital for business sustainability.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Mar 2022	Mar 2021
Income Statement		Total Revenue
2.61B	2.61B	2.63B	2.48B	2.10B
	Gross Profit
1.16B	1.09B	1.13B	1.11B	863.69M
	EBIT
342.29M	319.27M	356.67M	282.98M	123.83M
	EBITDA
342.29M	350.35M	407.48M	320.57M	183.77M
	Net Income Common Stockholders
245.80M	230.99M	245.49M	195.42M	67.92M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
334.07M	215.05M	59.18M	185.32M	248.14M
	Total Assets
1.65B	1.65B	1.58B	1.53B	1.55B
	Total Debt
791.16M	841.68M	851.30M	848.75M	981.21M
	Net Debt
457.09M	626.63M	792.12M	663.43M	733.07M
	Total Liabilities
1.25B	1.27B	1.33B	1.38B	1.46B
	Stockholders Equity
400.06M	371.91M	250.76M	148.14M	84.64M
Cash Flow		Free Cash Flow
368.23M	319.17M	55.19M	246.99M	179.58M
	Operating Cash Flow
368.23M	356.55M	83.58M	283.86M	241.97M
	Investing Cash Flow
-22.26M	-39.14M	-30.12M	-39.37M	-49.07M
	Financing Cash Flow
-240.35M	-155.70M	-170.91M	-304.07M	-57.69M

Kontoor Brands Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 68.54
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KTB, the sentiment is Neutral. The current price of 68.54 is above the 20-day moving average (MA) of 60.82, above the 50-day MA of 61.28, and below the 200-day MA of 75.80, indicating a neutral trend. The MACD of 1.51 indicates Negative momentum. The RSI at 65.18 is Neutral, neither overbought nor oversold. The STOCH value of 92.29 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for KTB.

Kontoor Brands Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KTB	73 Outperform	$3.58B	14.54	56.32%	2.95%	1.19%	3.19%
ZGN	66 Neutral	$3.22B	24.46	8.89%	1.56%	2.26%	-37.52%
COLM	63 Neutral	$3.49B	15.89	12.34%	1.78%	-1.69%	-4.01%
UA	62 Neutral	$2.40B	―	-6.12%	―	-7.47%	-131.70%
Sector *	61 Neutral	$6.66B	11.77	3.06%	3.96%	2.60%	-21.54%
HBI	53 Neutral	$1.68B	―	-23.24%	―	-33.72%	-892.32%
VFC	53 Neutral	$4.98B	―	-16.13%	2.68%	-8.42%	57.91%