American clothing company Kontoor Brands has reported revenues of $853 million in the third quarter (Q3) of 2025, a 27 per cent increase year-on-year (YoY), which included a two-point impact from the timing of shipments shifting from the third quarter to the fourth.

Adjusted gross margin expanded 80 basis points (bps) to 45.8 per cent, while reported gross margin stood at 41.3 per cent. Adjusted operating income rose 14 per cent to $122 million, and adjusted earnings per share (EPS) increased 5 per cent to $1.44.

Kontoor Brands has posted a 27 per cent YoY revenue rise to $853 million in Q3 2025, driven by Wrangler and Helly Hansen.
Adjusted gross margin climbed to 45.8 per cent, and adjusted EPS rose 5 per cent to $1.44.
The company raised FY25 guidance, forecasting revenue of $3.09–3.12 billion and adjusted EPS of $5.5, citing strong brand performance and operational efficiencies.

The company made a $25 million voluntary term loan repayment and declared a quarterly dividend of $0.53 per share, reflecting a 2 per cent increase, Kontoor Brands said in a press release.

“Our third quarter results exceeded expectations driven by the strength of our expanded brand portfolio, gross margin expansion, and operational execution. Wrangler delivered another quarter of growth, Helly Hansen outperformed, and we improved marketplace health through disciplined inventory management. Based on strong year-to-date performance, we are raising our full-year outlook and are positioned to finish a record year with momentum,” said Scott Baxter, president, CEO, and chairman at Kontoor Brands.

Brand-wise, Wrangler global revenue reached $471 million, up 2 per cent YoY, despite shipment timing impacts. US revenue rose 1 per cent, driven by an 11 per cent increase in direct-to-consumer (DTC) sales, while wholesale remained flat.

International revenue grew 6 per cent, supported by gains in both wholesale and DTC channels. Lee brand global revenue was $187 million, down 8 per cent YoY, impacted by proactive inventory management actions in China worth $7 million.

US revenue decreased 9 per cent, as an 11 per cent drop in wholesale was partly offset by a 15 per cent increase in digital sales.

International revenue declined 5 per cent, reflecting inventory adjustments, with an 8 per cent rise in brick-and-mortar mitigating some declines.

Helly Hansen contributed $193 million in global revenue, comprising $143 million from sport, $42 million from workwear. The company recorded $7 million from Musto brand. The brand generated $40 million in US sales and $153 million internationally, performing above expectations in both revenue and profitability.

Kontoor’s adjusted gross margin improved to 45.8 per cent, reflecting benefits from its Project Jeanius initiative, product mix optimisation, and targeted pricing actions. The company noted a 60-bps impact from the Helly Hansen acquisition. Excluding Helly Hansen, adjusted gross margin increased 140 basis points, offsetting higher product costs and newly imposed tariffs, added the release.

Selling, general and administrative (SG&A) expenses were $288 million reported and $269 million adjusted, equating to 31.5 per cent of revenue. Excluding Helly Hansen, adjusted SG&A remained stable at $195 million, aided by reduced distribution and freight costs.

Adjusted operating income reached $122 million, up 14 per cent, representing a 14.3 per cent margin. Excluding Helly Hansen, operating income rose 4 per cent, with margin improving to 16.9 per cent. Adjusted EPS was $1.44, up 5 per cent, including a $0.03 contribution from Helly Hansen.

Kontoor ended the quarter with $82 million in cash and $1.34 billion in long-term debt. The company had no outstanding borrowings under its revolving credit facility and maintained $494 million available for borrowing.

Inventory stood at $765 million, inclusive of Helly Hansen. Excluding it, inventory increased 21 per cent to $560 million, driven by earlier receipts due to improved supply chain lead times and tariff effects. The company expects inventory to fall to about $645 million by the fourth quarter.

For the full fiscal 2025 (FY25), Kontoor Brands raised its guidance, projecting revenue to reach the high end of the $3.09–3.12 billion range, representing 19–20 per cent YoY growth. Adjusted gross margin is expected to reach 46.4 per cent, a 130-bps improvement over 2024. Adjusted operating income is forecast at $449 million, up 18 per cent, compared to the prior outlook of $443 million. Adjusted EPS is anticipated at $5.50, a 12 per cent rise from 2024 levels, slightly above the previous projection of $5.45.

Cash from operations is expected to approximate $400 million, higher than the earlier forecast of exceeding $375 million. The company plans an additional $185 million voluntary term loan repayment in Q4, bringing total 2025 repayments to $235 million.

Helly Hansen is expected to contribute $460 million in annual revenue and $0.20 to adjusted EPS, consistent with earlier guidance. Fourth-quarter revenue is projected between $970 million and $980 million, representing 39–40 per cent growth, with a four-point benefit from a 53^rd week.

Kontoor anticipates capital expenditures of around $25 million and an effective tax rate of 21 per cent for the year. Interest expense should total $50 million and adjusted other expense approximately $11 million.

“We are raising our full year outlook to reflect stronger revenue and earnings growth, accelerating cash generation, and the scaling benefits from Project Jeanius,” added Baxter. “We expect the near-term environment to remain dynamic, but I am confident our strong fundamentals, operational execution, and increasing capital allocation optionality will continue to drive strong value creation for our shareholders.”

Fibre2Fashion News Desk (SG)

US economic growth solidified in the third quarter (Q3) this year, with steady business investment and consumer demand, data received till September 30 suggest, but each week of the unnecessary government shutdown is adding drag to the fourth quarter (Q4 2025) gross domestic product (GDP) and introduces downside risk to the near-term outlook.

Artificial intelligence (AI) could have disruptive impacts on the economy and labour markets as businesses and individuals integrate it or fail to, according to the Economy Statement for the Treasury Borrowing Advisory Committee.

US economic growth solidified in Q3 2025, with steady business investment and consumer demand, but each week of the unnecessary government shutdown is adding drag to Q4 GDP and introduces downside risk to the near-term outlook, the Economy Statement for the Treasury Borrowing Advisory Committee said.
AI could disrupt the economy and labour markets as businesses and individuals integrate it or fail to.

Yields on US Treasury notes and bills eased over Q3 2025 and labour markets stabilised in July and August, with modest employment growth consistent with that of Q2, the statement said.

Forced deportation and voluntary self-deportation of illegal immigrants has reduced labour supply, but labour demand has similarly decreased. This has kept aggregate labour markets roughly in balance.

With modest hiring but low layoff rates, firms appear to be planning for output growth via productivity improvements, a release from the treasury department said.

In just July and August, real personal consumption expenditures (PCE) were up by 2.8 per cent at an annual rate, picking up modestly from the Q2 figure.

Total payroll job growth averaged 51,000 per month during July and August, after averaging 55,000 per month during Q2 2025. The slower growth from the second to third quarters, however, partly reflected the shedding of federal government jobs—with a monthly average decrease of 12,500 in federal employment.

By contrast, private sector job creation remained steady at 58,000 jobs per month in July and August. Although this growth rate is below the roughly 100,000 jobs added per month in Q1 2025, it likely reflects the drop in population growth related to the forced and self-deportation of illegal immigrants, the release noted.

From May 2024 to July 2025, monthly unemployment rates fluctuated within a narrow range of 4 per cent and 4.2 per cent. In August, the unemployment rate ticked up to 4.3 per cent of the labour force, and the average for July and August was 4.29 per cent.

Unemployment rates in Q3 2025 remained just below the Congressional Budget Office’s 4.4-per cent estimate of the non-cyclical unemployment rate—or the rate of unemployment that is consistent with stable inflation and excludes fluctuations in aggregate demand.

Meanwhile, layoffs and discharges remained low. Private-sector layoffs and discharges accounted for just 1.3 per cent of employment in July and August, in line with the low rates that persisted during President Donald Trump’s first term before the pandemic.

Inflation remained above the target of 2 per cent in Q3 2025. As of September 2025, CPI inflation was 3 per cent on a twelve-month basis. The elevated annual growth partly reflects the strong price pressures from September 2024 to January 2025, in which headline CPI rose by 4.1 per cent at an annualised rate. From January 2025 to September 2025, CPI growth was more moderate at 2.5 per cent at an annual rate.

Monthly core CPI inflation averaged 0.3 per cent in Q3 2025. Over the twelve months through September 2025, the core inflation rate was 3 per cent. So far this year, annual core inflation has ranged between 2.8 per cent and 3.1 per cent, save for the 3.3-per cent rating realised in January from when President Trump assumed office.

Fibre2Fashion News Desk (DS)

Exports of knitted and crocheted clothing and accessories (HS Chapter **) fell by *.* per cent to $*,***.*** million, down from $*,***.*** million in January–September ****. Non-knitted apparel and accessories (HS Chapter **) declined by *.* per cent, dropping to $*,***.*** million from $*,***.*** million during the same period last year, as per the trade report on the top twenty chapters.

The sharper decline in woven apparel highlights the stronger impact of cost inflation and global retail destocking on higher-value segments, while knitwear showed relatively greater resilience due to sustained demand for basic, affordable categories.