Shares of Kontoor Brands, Inc. (KTB) plummeted 5.43% in pre-market trading on Monday, despite the company reporting better-than-expected third-quarter earnings and raising its full-year outlook. The sharp decline appears to be driven by the company's revenue miss and concerns about its fourth-quarter guidance.
Kontoor Brands, known for its Wrangler and Lee jeans brands, reported fiscal Q3 adjusted earnings of $1.44 per share, surpassing analysts' expectations of $1.36. However, the company's revenue of $853.2 million fell short of the $855.5 million forecast by analysts. This revenue miss, albeit slight, seems to have rattled investors, overshadowing the earnings beat.
Adding to the market's concerns, Kontoor provided fourth-quarter revenue guidance in the range of $970 million to $980 million, which may be viewed as conservative by some investors. The company also raised its full-year 2025 adjusted EPS outlook to approximately $5.50, up from its previous guidance of $5.45, and now expects revenue to be at the high end of its previously issued range of $3.09 billion to $3.12 billion. Despite this improved outlook, the market's reaction suggests that investors were hoping for even stronger guidance, particularly in light of the current economic uncertainties and competitive retail landscape.
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