Fashion
US’ Kontoor Brands lifts FY25 outlook as Q2 revenue hits $658 mn
The company’s gross margin stood at 46.3 per cent, while adjusted gross margin improved by 120 basis points (bps) YoY to 46.4 per cent, including a 20-bps contribution from Helly Hansen. The adjusted operating income grew 25 per cent to $100 million, with organic adjusted operating income up 32 per cent to $105 million.
Kontoor Brands has reported a strong Q2 2025 result with revenue of $658 million, up 8 per cent YoY.
The adjusted gross margin rose to 46.4 per cent and adjusted EPS to $1.21.
Wrangler revenue grew 7 per cent while Lee declined 6 per cent.
Helly Hansen added $29 million.
FY25 revenue is forecast at $3.09–$3.12 billion with adjusted EPS of $5.45.
Cash flow is expected to exceed $375 million.
The adjusted earnings per share (EPS) was $1.21, a 23 per cent increase, or $1.33 excluding Helly Hansen’s integration, reflecting a 36 per cent rise.
“Our strong second quarter results were driven by better-than-expected organic revenue growth, gross margin expansion, operating efficiency and cash generation, as well as a stronger-than-expected contribution from Helly Hansen,” said Scott Baxter, president, CEO and chairman of the board. “We welcomed Helly Hansen to the Kontoor family in June and the integration is off to a great start.”
Brand-wise, Wrangler global revenue reached $461 million (up 7 per cent), with the US market seeing 9 per cent growth, while Lee global revenue declined 6 per cent to $166 million, though showed sequential improvement from Q1. Helly Hansen contributed $29 million in revenue for June, with the Musto sub-brand generating $3 million.
SG&A expenses were reported at $226 million, or 34.4 per cent of revenue, while adjusted SG&A expenses stood at $206 million (31.3 per cent of revenue). Organic SG&A expenses dropped 5 per cent YoY, driven by lower freight and discretionary spend, Kontoor said in a press release.
Kontoor raised its FY25 outlook, now expecting revenue in the range of $3.09 to $3.12 billion—representing 19–20 per cent growth YoY, including an 18 per cent benefit from Helly Hansen. Adjusted gross margin is projected at approximately 46.1 per cent, up 100 bps from the previous year, despite an estimated 50 bps impact from increased tariffs.
Adjusted operating income is expected to reach $443 million, up 16 per cent YoY, including a $30 million impact from tariffs and additional marketing investments. Full year adjusted EPS is now forecast at approximately $5.45, with Helly Hansen contributing around $0.20 and tariffs and added investments reducing EPS by $0.4.
“We are raising our full year outlook to reflect stronger first half results, greater visibility into our tariff mitigation initiatives, and the confidence we have in the outlook for our business for the balance of the year,” added Baxter. “Our ability to largely offset the impact from higher tariffs reflects the strength of our brands, the agility of our supply chain, and the benefits from Project Jeanius.”
The company anticipates third quarter (Q3) revenue of $855 million (up 28 per cent YoY) and adjusted EPS of $1.35. Helly Hansen is expected to break even in Q3, net of acquisition-related interest.
Kontoor expects cash flow from operations to exceed $375 million, up from the prior guidance of $350 million. Capital expenditures are pegged at $40 million. The company’s full-year tax rate is forecast at 21 per cent, with interest expense projected at $50 million.
Fibre2Fashion News Desk (SG)
Following earlier increases in purified terephthalic acid (PTA), melt and PSF, Indian producers have now raised PFY prices. POY, FDY and PTY prices have been increased by ****;* per kg across all deniers and lustres with effect from March *, reflecting rapid cost pass-through amid heightened volatility in crude-linked value chains, according to the market sources.
In the previous weekly revision effective February **, ****, PTA was increased by ****;*.** per kg to ****;**.** per kg, while monoethylene glycol (MEG) was retained at ****;**.** per kg. Polyester melt prices were raised by ****;*.** per kg to ****;**.** per kg. Downstream PSF prices were also revised upward by ****;*.** per kg from March *.
May 2026 cotton settled at 64.59 cents per pound, down 1.02 cents. This marked the lowest settlement price for May contract since February 20, effectively erasing all gains made over that period.
Cotton futures on Intercontinental Exchange (ICE) fell over 1 per cent, with May 2026 settling at 64.59 cents/lb, the lowest since Feb 20, amid Middle East tensions and a stronger US dollar.
Rising inventories and risk aversion pressured prices.
Speculators cut net shorts, while crude oil surged.
ICE cotton traded mixed in early Indian hours today.
Total trading volume for the session came in at 73,225 contracts. ICE-certified deliverable No. 2 cotton inventory rose to 126,178 bales as of February 26, up from 119,457 bales the previous trading day.
The US dollar climbed to its highest level in over a month, making dollar-denominated commodities like cotton more expensive for international buyers and reducing export demand.
Market analysts stated that the Middle East conflict is putting significant pressure on cotton and that a broader risk-aversion tone is affecting the market.
On March 2, Iran continued launching attacks on US military bases across multiple countries in the Middle East, with explosions reported in several locations. An advisor to the Iranian Islamic Revolutionary Guard Corps commander announced that the Strait of Hormuz had been closed, with Iran threatening to strike any vessels attempting to pass through it.
US President Trump indicated that military action against Iran could last four to five weeks, while also expressing readiness for operations to extend considerably longer.
Major Wall Street indices declined on Monday as the conflict raised fears of disrupted global trade routes and renewed inflationary pressures. Analysts warned that investors appear to be rebuilding short positions in cotton, suggesting continued downward price pressure in the near term. The earlier May contract low of 62.86 cents per pound as a key support level that could be tested again.
CFTC data released the prior Friday showed that speculators reduced their net short positions in ICE cotton futures and options by 26,508 contracts in the week ending February 24, bringing net shorts to 48,922 contracts.
International crude oil and natural gas prices surged sharply on Monday following US and Israeli strikes on Iran, with retaliatory actions forcing the closure of several energy facilities in the region.
This morning (Indian Standard Time), ICE cotton for May 2026 was traded at 64.75 cents per pound (up 0.16 cent), cash cotton at 62.59 cents (down 1.02 cent), the March 2026 contract at 62.59 cents ((down 1.02 cent)), the July 2026 contract at 66.75 cents (up 0.14 cent), the October 2026 contract at 68.18 cents (down 0.49 cent) and the December 2026 at 69.04 cents (up 0.12 cent). A few contracts remained at their previous closing levels, with no trading recorded so far today.
Fibre2Fashion News Desk (KUL)
If the US administration imposes a 15-per cent levy, the US ETR would rise to 11.3 per cent.
President Donald Trump reinstated tariffs immediately following the US Supreme Court’s February 20 ruling that invalidated the reciprocal tariffs imposed under the International Emergency Economic Powers Act (IEEPA). The new blanket 10-per cent tariff rate is authorised under Section 122 of the Trade Act of 1974 and expires in 150 days unless extended by Congress.
The 10-per cent blanket reciprocal tariff imposed by the US on most trading partners has reduced the US effective tariff rate (ETR) to 9.4 per cent from 12.7 per cent, Fitch Ratings said.
If a 15-per cent levy is imposed, the ETR would rise to 11.3 per cent.
China has the highest ETR among trading partners, followed by Vietnam, Japan and Brazil.
China’s ETR is around 19 per cent from 29 per cent earlier.
Section 122 permits a maximum rate of 15 per cent but does not allow for tariff adjustments for individual countries.
Prior to the court decision, China was subject to two reciprocal tariffs: a fentanyl tariff of 10 per cent that applied to all imports and a 10-per cent reciprocal tariff on an import base subject to carveouts. The two tariffs have been consolidated into the 10-per cent blanket tariff, reducing China’s ETR to around 19 per cent from 29 per cent, Fitch said in a release.
China still has the highest ETR among major trading partners, followed by Vietnam, Japan and Brazil. Of the United States’ 31 largest trading partners, 26 will see their ETRs decline. Brazil benefits the most, with its ETR decreasing by 18 percentage points (pp) to 11 per cent from 29 per cent.
ETRs for most countries largely remain unchanged following the switch in tariff regimes, and no country will see an increase in its ETR if the Section 122 tariff rate remains at 10 per cent.
Fibre2Fashion News Desk (DS)
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