10-Q 1 ktb-20240629.htm 10-Q ktb-20240629
false2024Q2000176096512/31xbrli:sharesiso4217:USDiso4217:USDxbrli:sharesktb:segmentxbrli:purektb:election00017609652023-12-312024-06-2900017609652024-07-2600017609652024-06-2900017609652023-12-3000017609652023-07-0100017609652024-03-312024-06-2900017609652023-04-022023-07-0100017609652023-01-012023-07-0100017609652022-12-310001760965us-gaap:CommonStockMember2023-12-300001760965us-gaap:AdditionalPaidInCapitalMember2023-12-300001760965us-gaap:RetainedEarningsMember2023-12-300001760965us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-300001760965us-gaap:RetainedEarningsMember2023-12-312024-03-3000017609652023-12-312024-03-300001760965us-gaap:CommonStockMember2023-12-312024-03-300001760965us-gaap:AdditionalPaidInCapitalMember2023-12-312024-03-300001760965us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-312024-03-300001760965us-gaap:CommonStockMember2024-03-300001760965us-gaap:AdditionalPaidInCapitalMember2024-03-300001760965us-gaap:RetainedEarningsMember2024-03-300001760965us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-3000017609652024-03-300001760965us-gaap:RetainedEarningsMember2024-03-312024-06-290001760965us-gaap:CommonStockMember2024-03-312024-06-290001760965us-gaap:AdditionalPaidInCapitalMember2024-03-312024-06-290001760965us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-312024-06-290001760965us-gaap:CommonStockMember2024-06-290001760965us-gaap:AdditionalPaidInCapitalMember2024-06-290001760965us-gaap:RetainedEarningsMember2024-06-290001760965us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-06-290001760965us-gaap:CommonStockMember2022-12-310001760965us-gaap:AdditionalPaidInCapitalMember2022-12-310001760965us-gaap:RetainedEarningsMember2022-12-310001760965us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001760965us-gaap:RetainedEarningsMember2023-01-012023-04-0100017609652023-01-012023-04-010001760965us-gaap:CommonStockMember2023-01-012023-04-010001760965us-gaap:AdditionalPaidInCapitalMember2023-01-012023-04-010001760965us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-04-010001760965us-gaap:CommonStockMember2023-04-010001760965us-gaap:AdditionalPaidInCapitalMember2023-04-010001760965us-gaap:RetainedEarningsMember2023-04-010001760965us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-04-0100017609652023-04-010001760965us-gaap:RetainedEarningsMember2023-04-022023-07-010001760965us-gaap:CommonStockMember2023-04-022023-07-010001760965us-gaap:AdditionalPaidInCapitalMember2023-04-022023-07-010001760965us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-04-022023-07-010001760965us-gaap:CommonStockMember2023-07-010001760965us-gaap:AdditionalPaidInCapitalMember2023-07-010001760965us-gaap:RetainedEarningsMember2023-07-010001760965us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-07-010001760965ktb:WranglerSegmentMemberus-gaap:SalesChannelThroughIntermediaryMemberus-gaap:OperatingSegmentsMembercountry:US2024-03-312024-06-290001760965ktb:LeeSegmentMemberus-gaap:SalesChannelThroughIntermediaryMemberus-gaap:OperatingSegmentsMembercountry:US2024-03-312024-06-290001760965us-gaap:SalesChannelThroughIntermediaryMembercountry:USus-gaap:MaterialReconcilingItemsMember2024-03-312024-06-290001760965us-gaap:SalesChannelThroughIntermediaryMembercountry:US2024-03-312024-06-290001760965ktb:WranglerSegmentMemberus-gaap:SalesChannelThroughIntermediaryMemberus-gaap:OperatingSegmentsMemberus-gaap:NonUsMember2024-03-312024-06-290001760965ktb:LeeSegmentMemberus-gaap:SalesChannelThroughIntermediaryMemberus-gaap:OperatingSegmentsMemberus-gaap:NonUsMember2024-03-312024-06-290001760965us-gaap:SalesChannelThroughIntermediaryMemberus-gaap:NonUsMemberus-gaap:MaterialReconcilingItemsMember2024-03-312024-06-290001760965us-gaap:SalesChannelThroughIntermediaryMemberus-gaap:NonUsMember2024-03-312024-06-290001760965ktb:WranglerSegmentMemberus-gaap:SalesChannelDirectlyToConsumerMemberus-gaap:OperatingSegmentsMember2024-03-312024-06-290001760965us-gaap:SalesChannelDirectlyToConsumerMemberktb:LeeSegmentMemberus-gaap:OperatingSegmentsMember2024-03-312024-06-290001760965us-gaap:SalesChannelDirectlyToConsumerMemberus-gaap:MaterialReconcilingItemsMember2024-03-312024-06-290001760965us-gaap:SalesChannelDirectlyToConsumerMember2024-03-312024-06-290001760965ktb:WranglerSegmentMemberus-gaap:OperatingSegmentsMember2024-03-312024-06-290001760965ktb:LeeSegmentMemberus-gaap:OperatingSegmentsMember2024-03-312024-06-290001760965us-gaap:MaterialReconcilingItemsMember2024-03-312024-06-290001760965ktb:WranglerSegmentMemberus-gaap:OperatingSegmentsMembercountry:US2024-03-312024-06-290001760965ktb:LeeSegmentMemberus-gaap:OperatingSegmentsMembercountry:US2024-03-312024-06-290001760965country:USus-gaap:MaterialReconcilingItemsMember2024-03-312024-06-290001760965country:US2024-03-312024-06-290001760965ktb:WranglerSegmentMemberus-gaap:OperatingSegmentsMemberus-gaap:NonUsMember2024-03-312024-06-290001760965ktb:LeeSegmentMemberus-gaap:OperatingSegmentsMemberus-gaap:NonUsMember2024-03-312024-06-290001760965us-gaap:NonUsMemberus-gaap:MaterialReconcilingItemsMember2024-03-312024-06-290001760965us-gaap:NonUsMember2024-03-312024-06-290001760965ktb:WranglerSegmentMemberus-gaap:SalesChannelThroughIntermediaryMemberus-gaap:OperatingSegmentsMembercountry:US2023-04-022023-07-010001760965ktb:LeeSegmentMemberus-gaap:SalesChannelThroughIntermediaryMemberus-gaap:OperatingSegmentsMembercountry:US2023-04-022023-07-010001760965us-gaap:SalesChannelThroughIntermediaryMembercountry:USus-gaap:MaterialReconcilingItemsMember2023-04-022023-07-010001760965us-gaap:SalesChannelThroughIntermediaryMembercountry:US2023-04-022023-07-010001760965ktb:WranglerSegmentMemberus-gaap:SalesChannelThroughIntermediaryMemberus-gaap:OperatingSegmentsMemberus-gaap:NonUsMember2023-04-022023-07-010001760965ktb:LeeSegmentMemberus-gaap:SalesChannelThroughIntermediaryMemberus-gaap:OperatingSegmentsMemberus-gaap:NonUsMember2023-04-022023-07-010001760965us-gaap:SalesChannelThroughIntermediaryMemberus-gaap:NonUsMemberus-gaap:MaterialReconcilingItemsMember2023-04-022023-07-010001760965us-gaap:SalesChannelThroughIntermediaryMemberus-gaap:NonUsMember2023-04-022023-07-010001760965ktb:WranglerSegmentMemberus-gaap:SalesChannelDirectlyToConsumerMemberus-gaap:OperatingSegmentsMember2023-04-022023-07-010001760965us-gaap:SalesChannelDirectlyToConsumerMemberktb:LeeSegmentMemberus-gaap:OperatingSegmentsMember2023-04-022023-07-010001760965us-gaap:SalesChannelDirectlyToConsumerMemberus-gaap:MaterialReconcilingItemsMember2023-04-022023-07-010001760965us-gaap:SalesChannelDirectlyToConsumerMember2023-04-022023-07-010001760965ktb:WranglerSegmentMemberus-gaap:OperatingSegmentsMember2023-04-022023-07-010001760965ktb:LeeSegmentMemberus-gaap:OperatingSegmentsMember2023-04-022023-07-010001760965us-gaap:MaterialReconcilingItemsMember2023-04-022023-07-010001760965ktb:WranglerSegmentMemberus-gaap:OperatingSegmentsMembercountry:US2023-04-022023-07-010001760965ktb:LeeSegmentMemberus-gaap:OperatingSegmentsMembercountry:US2023-04-022023-07-010001760965country:USus-gaap:MaterialReconcilingItemsMember2023-04-022023-07-010001760965country:US2023-04-022023-07-010001760965ktb:WranglerSegmentMemberus-gaap:OperatingSegmentsMemberus-gaap:NonUsMember2023-04-022023-07-010001760965ktb:LeeSegmentMemberus-gaap:OperatingSegmentsMemberus-gaap:NonUsMember2023-04-022023-07-010001760965us-gaap:NonUsMemberus-gaap:MaterialReconcilingItemsMember2023-04-022023-07-010001760965us-gaap:NonUsMember2023-04-022023-07-010001760965ktb:WranglerSegmentMemberus-gaap:SalesChannelThroughIntermediaryMemberus-gaap:OperatingSegmentsMembercountry:US2023-12-312024-06-290001760965ktb:LeeSegmentMemberus-gaap:SalesChannelThroughIntermediaryMemberus-gaap:OperatingSegmentsMembercountry:US2023-12-312024-06-290001760965us-gaap:SalesChannelThroughIntermediaryMembercountry:USus-gaap:MaterialReconcilingItemsMember2023-12-312024-06-290001760965us-gaap:SalesChannelThroughIntermediaryMembercountry:US2023-12-312024-06-290001760965ktb:WranglerSegmentMemberus-gaap:SalesChannelThroughIntermediaryMemberus-gaap:OperatingSegmentsMemberus-gaap:NonUsMember2023-12-312024-06-290001760965ktb:LeeSegmentMemberus-gaap:SalesChannelThroughIntermediaryMemberus-gaap:OperatingSegmentsMemberus-gaap:NonUsMember2023-12-312024-06-290001760965us-gaap:SalesChannelThroughIntermediaryMemberus-gaap:NonUsMemberus-gaap:MaterialReconcilingItemsMember2023-12-312024-06-290001760965us-gaap:SalesChannelThroughIntermediaryMemberus-gaap:NonUsMember2023-12-312024-06-290001760965ktb:WranglerSegmentMemberus-gaap:SalesChannelDirectlyToConsumerMemberus-gaap:OperatingSegmentsMember2023-12-312024-06-290001760965us-gaap:SalesChannelDirectlyToConsumerMemberktb:LeeSegmentMemberus-gaap:OperatingSegmentsMember2023-12-312024-06-290001760965us-gaap:SalesChannelDirectlyToConsumerMemberus-gaap:MaterialReconcilingItemsMember2023-12-312024-06-290001760965us-gaap:SalesChannelDirectlyToConsumerMember2023-12-312024-06-290001760965ktb:WranglerSegmentMemberus-gaap:OperatingSegmentsMember2023-12-312024-06-290001760965ktb:LeeSegmentMemberus-gaap:OperatingSegmentsMember2023-12-312024-06-290001760965us-gaap:MaterialReconcilingItemsMember2023-12-312024-06-290001760965ktb:WranglerSegmentMemberus-gaap:OperatingSegmentsMembercountry:US2023-12-312024-06-290001760965ktb:LeeSegmentMemberus-gaap:OperatingSegmentsMembercountry:US2023-12-312024-06-290001760965country:USus-gaap:MaterialReconcilingItemsMember2023-12-312024-06-290001760965country:US2023-12-312024-06-290001760965ktb:WranglerSegmentMemberus-gaap:OperatingSegmentsMemberus-gaap:NonUsMember2023-12-312024-06-290001760965ktb:LeeSegmentMemberus-gaap:OperatingSegmentsMemberus-gaap:NonUsMember2023-12-312024-06-290001760965us-gaap:NonUsMemberus-gaap:MaterialReconcilingItemsMember2023-12-312024-06-290001760965us-gaap:NonUsMember2023-12-312024-06-290001760965ktb:WranglerSegmentMemberus-gaap:SalesChannelThroughIntermediaryMemberus-gaap:OperatingSegmentsMembercountry:US2023-01-012023-07-010001760965ktb:LeeSegmentMemberus-gaap:SalesChannelThroughIntermediaryMemberus-gaap:OperatingSegmentsMembercountry:US2023-01-012023-07-010001760965us-gaap:SalesChannelThroughIntermediaryMembercountry:USus-gaap:MaterialReconcilingItemsMember2023-01-012023-07-010001760965us-gaap:SalesChannelThroughIntermediaryMembercountry:US2023-01-012023-07-010001760965ktb:WranglerSegmentMemberus-gaap:SalesChannelThroughIntermediaryMemberus-gaap:OperatingSegmentsMemberus-gaap:NonUsMember2023-01-012023-07-010001760965ktb:LeeSegmentMemberus-gaap:SalesChannelThroughIntermediaryMemberus-gaap:OperatingSegmentsMemberus-gaap:NonUsMember2023-01-012023-07-010001760965us-gaap:SalesChannelThroughIntermediaryMemberus-gaap:NonUsMemberus-gaap:MaterialReconcilingItemsMember2023-01-012023-07-010001760965us-gaap:SalesChannelThroughIntermediaryMemberus-gaap:NonUsMember2023-01-012023-07-010001760965ktb:WranglerSegmentMemberus-gaap:SalesChannelDirectlyToConsumerMemberus-gaap:OperatingSegmentsMember2023-01-012023-07-010001760965us-gaap:SalesChannelDirectlyToConsumerMemberktb:LeeSegmentMemberus-gaap:OperatingSegmentsMember2023-01-012023-07-010001760965us-gaap:SalesChannelDirectlyToConsumerMemberus-gaap:MaterialReconcilingItemsMember2023-01-012023-07-010001760965us-gaap:SalesChannelDirectlyToConsumerMember2023-01-012023-07-010001760965ktb:WranglerSegmentMemberus-gaap:OperatingSegmentsMember2023-01-012023-07-010001760965ktb:LeeSegmentMemberus-gaap:OperatingSegmentsMember2023-01-012023-07-010001760965us-gaap:MaterialReconcilingItemsMember2023-01-012023-07-010001760965ktb:WranglerSegmentMemberus-gaap:OperatingSegmentsMembercountry:US2023-01-012023-07-010001760965ktb:LeeSegmentMemberus-gaap:OperatingSegmentsMembercountry:US2023-01-012023-07-010001760965country:USus-gaap:MaterialReconcilingItemsMember2023-01-012023-07-010001760965country:US2023-01-012023-07-010001760965ktb:WranglerSegmentMemberus-gaap:OperatingSegmentsMemberus-gaap:NonUsMember2023-01-012023-07-010001760965ktb:LeeSegmentMemberus-gaap:OperatingSegmentsMemberus-gaap:NonUsMember2023-01-012023-07-010001760965us-gaap:NonUsMemberus-gaap:MaterialReconcilingItemsMember2023-01-012023-07-010001760965us-gaap:NonUsMember2023-01-012023-07-010001760965us-gaap:OperatingSegmentsMember2024-03-312024-06-290001760965us-gaap:OperatingSegmentsMember2023-04-022023-07-010001760965us-gaap:OperatingSegmentsMember2023-12-312024-06-290001760965us-gaap:OperatingSegmentsMember2023-01-012023-07-010001760965us-gaap:CorporateNonSegmentMember2024-03-312024-06-290001760965us-gaap:CorporateNonSegmentMember2023-04-022023-07-010001760965us-gaap:CorporateNonSegmentMember2023-12-312024-06-290001760965us-gaap:CorporateNonSegmentMember2023-01-012023-07-010001760965us-gaap:ForeignLineOfCreditMember2024-06-290001760965us-gaap:ForeignLineOfCreditMember2023-12-300001760965us-gaap:ForeignLineOfCreditMember2023-07-010001760965us-gaap:RevolvingCreditFacilityMember2024-06-290001760965us-gaap:RevolvingCreditFacilityMember2023-12-300001760965us-gaap:RevolvingCreditFacilityMember2023-07-010001760965ktb:TermLoanMemberktb:TermLoanAFacilityMember2024-06-290001760965ktb:TermLoanMemberktb:TermLoanAFacilityMember2023-12-300001760965ktb:TermLoanMemberktb:TermLoanAFacilityMember2023-07-010001760965us-gaap:SeniorNotesMemberktb:A4125SeniorNotesDue2029Member2021-11-180001760965us-gaap:SeniorNotesMemberktb:A4125SeniorNotesDue2029Member2024-06-290001760965us-gaap:SeniorNotesMemberktb:A4125SeniorNotesDue2029Member2023-12-300001760965us-gaap:SeniorNotesMemberktb:A4125SeniorNotesDue2029Member2023-07-010001760965ktb:TermLoanMemberktb:TermLoanAFacilityMember2021-11-182021-11-180001760965ktb:TermLoanMemberktb:TermLoanAFacilityMember2021-11-180001760965us-gaap:RevolvingCreditFacilityMember2021-11-182021-11-180001760965us-gaap:RevolvingCreditFacilityMember2021-11-180001760965ktb:TermLoanMemberktb:TermLoanAFacilityMember2023-12-312024-06-290001760965ktb:TermLoanMemberktb:TermLoanAFacilityMember2024-03-312024-06-290001760965us-gaap:LetterOfCreditMember2024-06-290001760965srt:MaximumMember2023-12-312024-06-290001760965srt:MinimumMember2023-12-312024-06-290001760965us-gaap:FairValueInputsLevel1Member2024-06-290001760965us-gaap:FairValueInputsLevel2Member2024-06-290001760965us-gaap:FairValueInputsLevel3Member2024-06-290001760965us-gaap:ForeignExchangeContractMember2024-06-290001760965us-gaap:ForeignExchangeContractMemberus-gaap:FairValueInputsLevel1Member2024-06-290001760965us-gaap:ForeignExchangeContractMemberus-gaap:FairValueInputsLevel2Member2024-06-290001760965us-gaap:ForeignExchangeContractMemberus-gaap:FairValueInputsLevel3Member2024-06-290001760965us-gaap:FairValueInputsLevel1Member2023-12-300001760965us-gaap:FairValueInputsLevel2Member2023-12-300001760965us-gaap:FairValueInputsLevel3Member2023-12-300001760965us-gaap:ForeignExchangeContractMember2023-12-300001760965us-gaap:ForeignExchangeContractMemberus-gaap:FairValueInputsLevel1Member2023-12-300001760965us-gaap:ForeignExchangeContractMemberus-gaap:FairValueInputsLevel2Member2023-12-300001760965us-gaap:ForeignExchangeContractMemberus-gaap:FairValueInputsLevel3Member2023-12-300001760965us-gaap:InterestRateSwapMember2023-12-300001760965us-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel1Member2023-12-300001760965us-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel2Member2023-12-300001760965us-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel3Member2023-12-300001760965us-gaap:ForeignExchangeContractMember2023-07-010001760965us-gaap:ForeignExchangeContractMember2023-12-312024-06-290001760965us-gaap:InterestRateSwapMember2023-07-010001760965us-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2024-06-290001760965us-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2023-12-300001760965us-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2023-07-010001760965us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateSwapMember2024-06-290001760965us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateSwapMember2023-12-300001760965us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateSwapMember2023-07-010001760965us-gaap:ForeignExchangeContractMemberus-gaap:NondesignatedMember2024-06-290001760965us-gaap:ForeignExchangeContractMemberus-gaap:NondesignatedMember2023-12-300001760965us-gaap:ForeignExchangeContractMemberus-gaap:NondesignatedMember2023-07-010001760965us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2024-06-290001760965us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2023-12-300001760965us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2023-07-010001760965us-gaap:AccruedLiabilitiesMember2024-06-290001760965us-gaap:AccruedLiabilitiesMember2023-12-300001760965us-gaap:AccruedLiabilitiesMember2023-07-010001760965us-gaap:OtherAssetsMember2024-06-290001760965us-gaap:OtherAssetsMember2023-12-300001760965us-gaap:OtherAssetsMember2023-07-010001760965us-gaap:OtherLiabilitiesMember2024-06-290001760965us-gaap:OtherLiabilitiesMember2023-12-300001760965us-gaap:OtherLiabilitiesMember2023-07-010001760965us-gaap:ForeignExchangeContractMember2024-03-312024-06-290001760965us-gaap:ForeignExchangeContractMember2023-04-022023-07-010001760965us-gaap:ForeignExchangeContractMember2023-01-012023-07-010001760965us-gaap:InterestRateSwapMember2024-03-312024-06-290001760965us-gaap:InterestRateSwapMember2023-04-022023-07-010001760965us-gaap:InterestRateSwapMember2023-12-312024-06-290001760965us-gaap:InterestRateSwapMember2023-01-012023-07-010001760965us-gaap:SalesMember2024-03-312024-06-290001760965us-gaap:SalesMember2023-04-022023-07-010001760965us-gaap:SalesMember2023-12-312024-06-290001760965us-gaap:SalesMember2023-01-012023-07-010001760965us-gaap:CostOfSalesMember2024-03-312024-06-290001760965us-gaap:CostOfSalesMember2023-04-022023-07-010001760965us-gaap:CostOfSalesMember2023-12-312024-06-290001760965us-gaap:CostOfSalesMember2023-01-012023-07-010001760965us-gaap:OtherNonoperatingIncomeExpenseMember2024-03-312024-06-290001760965us-gaap:OtherNonoperatingIncomeExpenseMember2023-04-022023-07-010001760965us-gaap:OtherNonoperatingIncomeExpenseMember2023-12-312024-06-290001760965us-gaap:OtherNonoperatingIncomeExpenseMember2023-01-012023-07-010001760965us-gaap:InterestExpenseMember2024-03-312024-06-290001760965us-gaap:InterestExpenseMember2023-04-022023-07-010001760965us-gaap:InterestExpenseMember2023-12-312024-06-290001760965us-gaap:InterestExpenseMember2023-01-012023-07-010001760965us-gaap:CommonStockMember2023-12-312024-06-290001760965us-gaap:AccumulatedTranslationAdjustmentMember2024-06-290001760965us-gaap:AccumulatedTranslationAdjustmentMember2023-12-300001760965us-gaap:AccumulatedTranslationAdjustmentMember2023-07-010001760965us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2024-06-290001760965us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-12-300001760965us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-07-010001760965us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2024-06-290001760965us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-12-300001760965us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-07-010001760965us-gaap:AccumulatedTranslationAdjustmentMember2024-03-300001760965us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2024-03-300001760965us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2024-03-300001760965us-gaap:AccumulatedTranslationAdjustmentMember2024-03-312024-06-290001760965us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2024-03-312024-06-290001760965us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2024-03-312024-06-290001760965us-gaap:AccumulatedTranslationAdjustmentMember2023-04-010001760965us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-04-010001760965us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-04-010001760965us-gaap:AccumulatedTranslationAdjustmentMember2023-04-022023-07-010001760965us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-04-022023-07-010001760965us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-04-022023-07-010001760965us-gaap:AccumulatedTranslationAdjustmentMember2023-12-312024-06-290001760965us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-12-312024-06-290001760965us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-12-312024-06-290001760965us-gaap:AccumulatedTranslationAdjustmentMember2022-12-310001760965us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-12-310001760965us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-12-310001760965us-gaap:AccumulatedTranslationAdjustmentMember2023-01-012023-07-010001760965us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-01-012023-07-010001760965us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-01-012023-07-010001760965us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2024-03-312024-06-290001760965us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-04-022023-07-010001760965us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-12-312024-06-290001760965us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-01-012023-07-010001760965us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:ForeignExchangeContractMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2024-03-312024-06-290001760965us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:ForeignExchangeContractMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-04-022023-07-010001760965us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:ForeignExchangeContractMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-12-312024-06-290001760965us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:ForeignExchangeContractMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-01-012023-07-010001760965us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:InterestRateContractMember2024-03-312024-06-290001760965us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:InterestRateContractMember2023-04-022023-07-010001760965us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:InterestRateContractMember2023-12-312024-06-290001760965us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:InterestRateContractMember2023-01-012023-07-010001760965us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2024-03-312024-06-290001760965us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-04-022023-07-010001760965us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-12-312024-06-290001760965us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-01-012023-07-010001760965us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2024-03-312024-06-290001760965us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-04-022023-07-010001760965us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-12-312024-06-290001760965us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-01-012023-07-010001760965ktb:PerformanceBasedRestrictedStockUnitsMemberus-gaap:ShareBasedPaymentArrangementEmployeeMember2024-04-012024-04-010001760965us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedPaymentArrangementEmployeeMember2024-04-012024-04-010001760965us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedPaymentArrangementNonemployeeMembersrt:DirectorMember2024-04-012024-04-010001760965us-gaap:RestrictedStockUnitsRSUMember2024-04-012024-04-010001760965ktb:PerformanceBasedRestrictedStockUnitsMembersrt:MinimumMemberus-gaap:ShareBasedPaymentArrangementEmployeeMember2024-03-312024-06-290001760965srt:MaximumMemberktb:PerformanceBasedRestrictedStockUnitsMemberus-gaap:ShareBasedPaymentArrangementEmployeeMember2024-03-312024-06-290001760965ktb:PerformanceBasedRestrictedStockUnitsMemberus-gaap:ShareBasedPaymentArrangementEmployeeMember2024-03-312024-06-290001760965srt:MaximumMemberktb:PerformanceBasedRestrictedStockUnitsMember2024-06-290001760965ktb:PerformanceBasedRestrictedStockUnitsMembersrt:MinimumMember2024-06-290001760965ktb:PerformanceBasedRestrictedStockUnitsMember2024-03-312024-06-290001760965us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedPaymentArrangementEmployeeMember2024-03-312024-06-290001760965us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedPaymentArrangementNonemployeeMembersrt:DirectorMember2024-03-312024-06-290001760965ktb:PerformanceBasedRestrictedStockUnitsMember2024-03-312024-06-290001760965ktb:PerformanceBasedRestrictedStockUnitsMember2023-12-312024-06-290001760965ktb:PerformanceBasedRestrictedStockUnitsMember2023-04-022023-07-010001760965ktb:PerformanceBasedRestrictedStockUnitsMember2023-01-012023-07-010001760965us-gaap:SellingGeneralAndAdministrativeExpensesMember2024-03-312024-06-290001760965us-gaap:SellingGeneralAndAdministrativeExpensesMember2023-12-312024-06-290001760965us-gaap:SellingGeneralAndAdministrativeExpensesMember2023-04-022023-07-010001760965us-gaap:SellingGeneralAndAdministrativeExpensesMember2023-01-012023-07-010001760965ktb:CorporateAndReconcilingItemsMember2024-03-312024-06-290001760965ktb:CorporateAndReconcilingItemsMember2023-04-022023-07-010001760965ktb:CorporateAndReconcilingItemsMember2023-12-312024-06-290001760965ktb:CorporateAndReconcilingItemsMember2023-01-012023-07-010001760965us-gaap:SubsequentEventMemberus-gaap:DividendDeclaredMember2024-07-25

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 29, 2024
or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission file number: 001-38854
kontoorlogotmpurplea16.jpg
KONTOOR BRANDS, INC.
(Exact name of registrant as specified in its charter)
North Carolina83-2680248
(State or other jurisdiction of incorporation or organization)(I.R.S. employer identification number)

400 N. Elm Street
Greensboro, North Carolina 27401
(Address of principal executive offices)

(336) 332-3400
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common Stock, no par valueKTBNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.     Yes þ    No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes þ    No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☑Accelerated filer☐Non-accelerated filer☐Smaller reporting company☐Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ☐   No þ 
The number of shares of Common Stock of the registrant outstanding as of July 26, 2024 was 55,685,269.


KONTOOR BRANDS, INC.
Table of Contents
 Page

Kontoor Brands, Inc. Q2 FY24 Form 10-Q 2


PART I — FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

KONTOOR BRANDS, INC.
Consolidated Balance Sheets
(Unaudited)
(In thousands, except share amounts)June 2024December 2023June 2023
ASSETS
Current assets
Cash and cash equivalents$224,296 $215,050 $82,418 
Accounts receivable, net 205,019 217,673 186,024 
Inventories488,340 500,353 626,885 
Prepaid expenses and other current assets104,357 110,808 114,345 
Total current assets1,022,012 1,043,884 1,009,672 
Property, plant and equipment, net108,150 112,045 106,878 
Operating lease assets55,850 54,812 65,388 
Intangible assets, net11,854 12,497 12,941 
Goodwill209,493 209,862 209,969 
Other assets205,080 212,339 203,469 
TOTAL ASSETS$1,612,439 $1,645,439 $1,608,317 
LIABILITIES AND EQUITY
Current liabilities
Short-term borrowings$— $— $62 
Current portion of long-term debt— 20,000 15,000 
Accounts payable196,460 180,220 195,282 
Accrued and other current liabilities153,903 171,414 156,766 
Operating lease liabilities, current22,714 21,003 21,899 
Total current liabilities373,077 392,637 389,009 
Operating lease liabilities, noncurrent35,911 36,753 42,044 
Other liabilities86,646 80,215 80,743 
Long-term debt749,654 763,921 773,270 
Total liabilities1,245,288 1,273,526 1,285,066 
Commitments and contingencies
Equity
Preferred Stock, no par value; shares authorized, 90,000,000; no shares outstanding at June 2024, December 2023 and June 2023
— — — 
Common Stock, no par value; shares authorized, 600,000,000; shares outstanding of 55,673,753 at June 2024; 55,720,251 at December 2023 and 56,109,508 at June 2023
— — — 
Additional paid-in capital297,518 273,197 258,349 
Retained earnings164,569 166,567 124,995 
Accumulated other comprehensive loss(94,936)(67,851)(60,093)
Total equity
367,151 371,913 323,251 
TOTAL LIABILITIES AND EQUITY$1,612,439 $1,645,439 $1,608,317 
See accompanying notes to unaudited consolidated financial statements.

3 Kontoor Brands, Inc. Q2 FY24 Form 10-Q

KONTOOR BRANDS, INC.
Consolidated Statements of Operations
(Unaudited)
Three Months Ended JuneSix Months Ended June
(In thousands, except per share amounts)2024202320242023
Net revenues $606,898 $616,009 $1,238,100 $1,283,132 
Costs and operating expenses
Cost of goods sold335,538 365,748 681,596 746,170 
Selling, general and administrative expenses196,117 186,864 396,831 378,616 
Total costs and operating expenses531,655 552,612 1,078,427 1,124,786 
Operating income75,243 63,397 159,673 158,346 
Interest expense(10,382)(9,663)(19,674)(19,936)
Interest income2,616 691 5,041 1,110 
Other expense, net(3,021)(3,152)(5,904)(5,378)
Income before income taxes64,456 51,273 139,136 134,142 
Income taxes12,687 14,877 27,860 31,450 
Net income$51,769 $36,396 $111,276 $102,692 
Earnings per common share
Basic$0.93 $0.65 $2.00 $1.84 
Diluted$0.92 $0.64 $1.97 $1.80 
Weighted average shares outstanding
Basic55,810 56,089 55,772 55,868 
Diluted56,456 56,846 56,597 56,893 
See accompanying notes to unaudited consolidated financial statements.



Kontoor Brands, Inc. Q2 FY24 Form 10-Q 4


KONTOOR BRANDS, INC.
Consolidated Statements of Comprehensive Income
(Unaudited)
 Three Months Ended JuneSix Months Ended June
(In thousands)2024202320242023
Net income$51,769 $36,396 $111,276 $102,692 
Other comprehensive (loss) income
Net change in foreign currency translation(9,146)4,529 (11,669)12,852 
Net change in defined benefit pension plans(58)(35)(140)(70)
Net change in derivative financial instruments(17,500)3,418 (15,276)6,790 
Total other comprehensive (loss) income, net of related taxes(26,704)7,912 (27,085)19,572 
Comprehensive income$25,065 $44,308 $84,191 $122,264 
See accompanying notes to unaudited consolidated financial statements.

5 Kontoor Brands, Inc. Q2 FY24 Form 10-Q

KONTOOR BRANDS, INC.
Consolidated Statements of Cash Flows
(Unaudited)
 Six Months Ended June
(In thousands)20242023
OPERATING ACTIVITIES
Net income$111,276 $102,692 
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization19,530 18,219 
Stock-based compensation13,669 7,023 
Provision for doubtful accounts828 (278)
Other3,264 9,113 
Changes in operating assets and liabilities:
Accounts receivable7,737 44,043 
Inventories8,444 (25,574)
Accounts payable17,992 (11,545)
Income taxes(1,505)(22,242)
Accrued and other current liabilities(16,401)(20,665)
Other assets and liabilities(12,163)10,890 
Cash provided by operating activities152,671 111,676 
INVESTING ACTIVITIES
Property, plant and equipment expenditures(8,122)(13,277)
Capitalized computer software(2,045)(6,756)
Other(1,265)(10)
Cash used by investing activities(11,432)(20,043)
FINANCING ACTIVITIES
Borrowings under revolving credit facility
— 268,000 
Repayments under revolving credit facility
— (268,000)
Repayments of term loan(35,000)(5,000)
Repurchases of Common Stock(45,271)— 
Dividends paid(55,732)(53,756)
Shares withheld for taxes, net of proceeds from issuance of Common Stock(1,037)(3,057)
Other— (7,236)
Cash used by financing activities(137,040)(69,049)
Effect of foreign currency rate changes on cash and cash equivalents5,047 655 
Net change in cash and cash equivalents 9,246 23,239 
Cash and cash equivalents – beginning of period215,050 59,179 
Cash and cash equivalents – end of period$224,296 $82,418 
See accompanying notes to unaudited consolidated financial statements.

Kontoor Brands, Inc. Q2 FY24 Form 10-Q 6


KONTOOR BRANDS, INC.
Consolidated Statements of Equity
(Unaudited)
Common StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive LossTotal Equity
 (In thousands, except per share amounts)SharesAmounts
Balance, December 202355,720 $— $273,197 $166,567 $(67,851)$371,913 
Net income— — — 59,507 — 59,507 
Stock-based compensation, net309 — 11,209 (7,106)— 4,103 
Other comprehensive loss— — — — (381)(381)
Dividends on Common Stock ($0.50 per share)
— — — (27,844)— (27,844)
Repurchases of Common Stock(337)— (105)(20,000)— (20,105)
Balance, March 202455,692 $— $284,301 $171,124 $(68,232)$387,193 
Net income— — — 51,769 — 51,769 
Stock-based compensation, net327 — 13,383 (5,436)— 7,947 
Other comprehensive loss— — — — (26,704)(26,704)
Dividends on Common Stock ($0.50 per share)
— — — (27,888)— (27,888)
Repurchases of Common Stock(345)— (166)(25,000)— (25,166)
Balance, June 202455,674 $— $297,518 $164,569 $(94,936)$367,151 
Common StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive LossTotal Equity
 (In thousands, except per share amounts)SharesAmounts
Balance, December 202255,517 $— $243,696 $86,726 $(79,665)$250,757 
Net income— — — 66,296 — 66,296 
Stock-based compensation, net417 — 7,412 (10,029)— (2,617)
Other comprehensive income— — — — 11,660 11,660 
Dividends on Common Stock ($0.48 per share)
— — — (26,808)— (26,808)
Balance, March 202355,934 $— $251,108 $116,185 $(68,005)$299,288 
Net income— — — 36,396 — 36,396 
Stock-based compensation, net176 — 7,241 (638)— 6,603 
Other comprehensive income— — — — 7,912 7,912 
Dividends on Common Stock ($0.48 per share)
— — — (26,948)— (26,948)
Balance, June 202356,110 $— $258,349 $124,995 $(60,093)$323,251 
See accompanying notes to unaudited consolidated financial statements.

7 Kontoor Brands, Inc. Q2 FY24 Form 10-Q

KONTOOR BRANDS, INC.
Notes to Consolidated Financial Statements
(Unaudited)

NOTE 1 — BASIS OF PRESENTATION
Description of Business
Kontoor Brands, Inc. ("Kontoor," the "Company," "we," "us" or "our") is a global lifestyle apparel company headquartered in the United States ("U.S."). The Company designs, manufactures, procures, sells and licenses apparel, footwear and accessories, primarily under the brand names Wrangler® and Lee®. The Company's products are sold in the U.S. through mass merchants, specialty stores, department stores, company-operated stores and online, including digital marketplaces. The Company's products are also sold internationally, primarily in the Europe, Asia-Pacific and Non-U.S. Americas regions, through department, specialty, company-operated, concession retail and independently-operated partnership stores and online, including digital marketplaces.
Fiscal Year
The Company operates and reports using a 52/53-week fiscal year ending on the Saturday closest to December 31 of each year. Accordingly, this Form 10-Q presents the second quarter of the Company's fiscal year ending December 28, 2024 ("fiscal 2024"), which is a 52-week fiscal year. For presentation purposes herein, all references to periods ended June 2024, December 2023 and June 2023 correspond to the fiscal periods ended June 29, 2024, December 30, 2023 and July 1, 2023, respectively.
Macroeconomic Environment and Other Recent Developments
Global macroeconomic conditions that continued to impact the Company include elevated interest rates, inflation, recessionary concerns, fluctuating foreign currency exchange rates, supply chain issues and inconsistent consumer demand, particularly in China. These factors continue to contribute to uncertain global economic conditions and consumer spending patterns, which are impacting retailers' and the Company's operations. Additionally, the conflicts in Ukraine and the Middle East are causing disruption in the surrounding areas and greater uncertainty in the global economy. The Company considered the impact of these developments on the assumptions and estimates used when preparing these quarterly financial statements including, but not limited to, our allowance for doubtful accounts, inventory valuations, liabilities for variable consideration, deferred tax valuation allowances, fair value measurements including asset impairment evaluations, the effectiveness of the Company’s hedging instruments and expected compliance with all applicable financial covenants in our Credit Agreement (as defined in Note 7 to the Company's financial statements). These assumptions and estimates may change as new events occur and additional information is obtained regarding the impact of the above conditions. Such future changes may have an adverse impact on the Company's results of operations, financial position and liquidity.
Basis of Presentation - Interim Financial Statements
The accompanying unaudited interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X and do not include all of the information and notes required by generally accepted accounting principles in the U.S. ("GAAP") for complete financial statements. In the opinion of management, the accompanying financial statements contain all normal and recurring adjustments necessary to fairly state the financial position, results of operations and cash flows of the Company for the interim periods presented. Operating results for the three and six months ended June 2024 are not necessarily indicative of results that may be expected for any other interim period or for fiscal 2024. The unaudited financial statements should be read in conjunction with the audited consolidated financial statements included in the Company's 2023 Annual Report on Form 10-K for the fiscal year ended December 30, 2023, as filed with the Securities and Exchange Commission on February 28, 2024 ("2023 Annual Report on Form 10-K").
Recently Adopted Accounting Standards
In September 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2022-04, "Disclosure of Supplier Finance Program Obligations," which requires entities that provide supplier finance programs in connection with the purchase of goods and services to disclose key terms of the programs, outstanding confirmed amounts as of period end, a description of where those obligations are presented in the balance sheets and an annual rollforward of obligations. This guidance was adopted by the Company during the first quarter of 2023, except for the requirement to include an annual rollforward of obligations which is effective beginning in 2024 and will be disclosed in our 2024 annual report on Form 10-K. Refer to Note 6 to the Company's financial statements for additional information related to our supply chain finance programs.
Recently Issued Accounting Standards
In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures," which requires enhanced disclosures about significant segment expenses. This guidance is effective for annual disclosures in fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. This guidance requires retrospective application to all prior periods presented in the financial statements. The Company is currently evaluating the impact that adoption of this guidance will have on its financial statements and disclosures.

Kontoor Brands, Inc. Q2 FY24 Form 10-Q 8


KONTOOR BRANDS, INC.
Notes to Consolidated Financial Statements
(Unaudited)
In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures," which requires disclosure of specific categories and greater disaggregation within the income tax rate reconciliation, and disclosure of disaggregated income taxes paid. This guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact that adoption of this guidance will have on its financial statements and disclosures.

NOTE 2 — REVENUES
Disaggregation of Revenue
The following tables present revenues disaggregated by channel and geography. Revenues from licensing arrangements are included within the U.S. or Non-U.S. Wholesale channels, based on the respective region where the licensee sells the product. Direct-to-Consumer revenues include sales from company-operated Wrangler® and Lee® branded full-price and outlet stores, online and international concession arrangements.
Other includes sales and licensing of Rock & Republic®, other company-owned brands and private label apparel.
Three Months Ended June 2024
(In thousands)WranglerLeeOtherTotal
Channel revenues
U.S. Wholesale$353,376 $96,613 $2,162 $452,151 
Non-U.S. Wholesale40,294 41,662 — 81,956 
Direct-to-Consumer35,575 37,024 192 72,791 
Total$429,245 $175,299 $2,354 $606,898 
Geographic revenues
U.S.$382,977 $110,899 $2,354 $496,230 
International46,268 64,400 — 110,668 
Total$429,245 $175,299 $2,354 $606,898 
Three Months Ended June 2023
(In thousands)WranglerLeeOtherTotal
Channel revenues
U.S. Wholesale$355,207 $98,218 $2,366 $455,791 
Non-U.S. Wholesale38,104 51,232 — 89,336 
Direct-to-Consumer32,174 38,558 150 70,882 
Total$425,485 $188,008 $2,516 $616,009 
Geographic revenues
U.S.$382,111 $114,248 $2,516 $498,875 
International43,374 73,760 — 117,134 
Total$425,485 $188,008 $2,516 $616,009 

9 Kontoor Brands, Inc. Q2 FY24 Form 10-Q

KONTOOR BRANDS, INC.
Notes to Consolidated Financial Statements
(Unaudited)
Six Months Ended June 2024
(In thousands)WranglerLeeOtherTotal
Channel revenues
U.S. Wholesale$682,101 $215,760 $4,254 $902,115 
Non-U.S. Wholesale84,732 105,280 — 190,012 
Direct-to-Consumer71,906 73,702 365 145,973 
Total$838,739 $394,742 $4,619 $1,238,100 
Geographic revenues
U.S.$740,440 $243,182 $4,619 $988,241 
International98,299 151,560 — 249,859 
Total$838,739 $394,742 $4,619 $1,238,100 
Six Months Ended June 2023
(In thousands)WranglerLeeOtherTotal
Channel revenues
U.S. Wholesale$692,883 $233,517 $5,594 $931,994 
Non-U.S. Wholesale90,023 117,237 10 207,270 
Direct-to-Consumer65,726 77,903 239 143,868 
Total$848,632 $428,657 $5,843 $1,283,132 
Geographic revenues
U.S.$747,240 $263,938 $5,833 $1,017,011 
International101,392 164,719 10 266,121 
Total$848,632 $428,657 $5,843 $1,283,132 
Contract Balances and Performance Obligations
The following table presents information about contract balances recorded in the Company's balance sheets:
(In thousands)June 2024December 2023June 2023
Accounts receivable, net$205,019 $217,673 $186,024 
Contract assets (a)
7,772 10,929 6,034 
Contract liabilities (b)
2,426 1,713 1,921 
(a) Included within "prepaid expenses and other current assets" in the Company's balance sheets.
(b) Included within "accrued and other current liabilities" in the Company's balance sheets.
For the three and six months ended June 2024 and June 2023, no significant revenue was recognized that was included in contract liabilities as of December 2023 and December 2022, respectively. For the three and six months ended June 2024, no significant revenue was recognized from performance obligations satisfied, or partially satisfied, in prior periods. As of June 2024, the Company has contractual rights under its licensing agreements to receive $84.9 million of fixed consideration related to the future minimum guarantees through December 2029.


Kontoor Brands, Inc. Q2 FY24 Form 10-Q 10


KONTOOR BRANDS, INC.
Notes to Consolidated Financial Statements
(Unaudited)
NOTE 3 — BUSINESS SEGMENT INFORMATION
The Company has two reportable segments:
•Wrangler — Wrangler® branded denim, apparel, footwear and accessories.
•Lee — Lee® branded denim, apparel, footwear and accessories.
The Company considers its chief executive officer to be its chief operating decision maker. The chief operating decision maker allocates resources and assesses performance based on the global brand operating results of Wrangler® and Lee®, which are the Company's operating and reportable segments.
In addition, we report an "Other" category to reconcile segment revenues and segment profit to the Company's operating results, but the Other category does not meet the criteria to be considered a reportable segment. Other includes sales and licensing of Rock & Republic®, other company-owned brands and private label apparel.
Accounting policies utilized for internal management reporting at the individual segments are consistent with those disclosed in the Company's 2023 Annual Report on Form 10-K. Corporate and other expenses, including certain restructuring and transformation costs, and interest income and expense are not controlled by segment management and therefore are excluded from the measurement of segment profit.
The following table presents financial information for the Company's reportable segments and income before income taxes:
 Three Months Ended JuneSix Months Ended June
(In thousands)2024202320242023
Segment revenues:
Wrangler$429,245 $425,485 $838,739 $848,632 
Lee175,299 188,008 394,742 428,657 
Total reportable segment revenues604,544 613,493 1,233,481 1,277,289 
Other revenues 2,354 2,516 4,619 5,843 
Total net revenues$606,898 $616,009 $1,238,100 $1,283,132 
Segment profit:
Wrangler$88,339 $70,976 $163,005 $142,083 
Lee13,367 17,165 48,461 56,738 
Total reportable segment profit$101,706 $88,141 $211,466 $198,821 
Corporate and other expenses(28,378)(27,660)(56,438)(45,724)
Interest expense(10,382)(9,663)(19,674)(19,936)
Interest income2,616 691 5,041 1,110 
Loss related to other revenues(1,106)(236)(1,259)(129)
Income before income taxes$64,456 $51,273 $139,136 $134,142 


11 Kontoor Brands, Inc. Q2 FY24 Form 10-Q

KONTOOR BRANDS, INC.
Notes to Consolidated Financial Statements
(Unaudited)
NOTE 4 — ACCOUNTS RECEIVABLE
Allowance for Doubtful Accounts
The following table presents a rollforward of the allowance for doubtful accounts:
Six Months Ended June
(In thousands)20242023
Balance, December$7,215 $9,918 
Increase (decrease) in provision for expected credit losses828 (278)
Accounts receivable balances written off(298)(1,107)
Other (1)
(117)263 
Balance, June$7,628 $8,796 
(1) Other primarily includes the impact of foreign currency translation and recoveries of amounts previously written off, none of which were individually significant.
Sale of Trade Accounts Receivable
The Company is party to an agreement with a financial institution to sell selected trade accounts receivable on a nonrecourse basis. Under this agreement, up to $377.5 million of the Company’s trade accounts receivable may be sold to the financial institution and remain outstanding at any point in time. The Company removes the sold balances from "accounts receivable, net" in its balance sheet at the time of sale. The Company does not retain any interests in the sold trade accounts receivable but continues to service and collect outstanding trade accounts receivable on behalf of the financial institution.
During the six months ended June 2024 and June 2023, the Company sold total trade accounts receivable of $647.5 million and $704.2 million, respectively. As of June 2024, December 2023 and June 2023, $179.6 million, $197.7 million and $211.5 million, respectively, of the sold trade accounts receivable had been removed from the Company's balance sheets but remained outstanding with the financial institution.
The funding fees charged by the financial institution for this program are reflected in the Company's statements of operations within "other expense, net" and were $2.9 million and $5.8 million for the three and six months ended June 2024, respectively, and $3.1 million and $6.1 million for the three and six months ended June 2023, respectively. Net proceeds of this program are reflected as operating activities in the Company's statements of cash flows.

NOTE 5 — INVENTORIES
The following table presents components of "inventories" recorded in the Company's balance sheets:
(In thousands)June 2024December 2023June 2023
Finished products$417,217 $421,051 $548,967 
Work-in-process32,667 35,722 33,502 
Raw materials38,456 43,580 44,416 
Total inventories$488,340 $500,353 $626,885 

NOTE 6 — SUPPLY CHAIN FINANCING
The Company facilitates voluntary Supply Chain Finance ("SCF") programs with its financial institutions that allow certain suppliers the option to sell or assign their rights to receivables due from the Company, enabling the suppliers to receive payment from the financial institutions sooner than our negotiated payment terms. At June 2024, December 2023 and June 2023, accounts payable included total outstanding balances of $32.7 million, $19.7 million and $30.6 million, respectively, due to suppliers that participate in the SCF programs.


Kontoor Brands, Inc. Q2 FY24 Form 10-Q 12


KONTOOR BRANDS, INC.
Notes to Consolidated Financial Statements
(Unaudited)
NOTE 7 — SHORT-TERM BORROWINGS AND LONG-TERM DEBT
Short-term Borrowings
At June 2024, December 2023 and June 2023, the Company had $19.3 million, $24.1 million and $23.9 million, respectively, of international lines of credit with various banks, which are uncommitted and may be terminated at any time by either the Company or the banks. There were no outstanding balances under these arrangements at June 2024, December 2023 and June 2023. In addition, short-term borrowings included other debt of $0.1 million at June 2023, with no balance remaining at June 2024 and December 2023.
Long-term Debt
The following table presents the components of "long-term debt" as recorded in the Company's balance sheets:
(In thousands)June 2024December 2023June 2023
Revolving Credit Facility$— $— $— 
Term Loan A353,827 388,481 393,218 
4.125% Notes, due 2029
395,827 395,440 395,052 
Total long-term debt749,654 783,921 788,270 
Less: current portion— (20,000)(15,000)
Long-term debt, due beyond one year$749,654 $763,921 $773,270 
Credit Facilities
The Company is party to a senior secured Credit Agreement, as amended and restated on November 18, 2021 (the “Credit Agreement”), which provides for (i) a five-year $400.0 million term loan A facility (“Term Loan A”) and (ii) a five-year $500.0 million revolving credit facility (the “Revolving Credit Facility”), collectively referred to as “Credit Facilities,” with the lenders and agents party thereto.
Term Loan A requires quarterly repayments of $5.0 million through September 2026, and the remaining principal of $335.0 million is due at maturity in November 2026. During the six months ended June 2024, the Company repaid a total of $35.0 million of the principal outstanding on Term Loan A, including $25.0 million of voluntary early quarterly repayments during the second quarter of 2024. Term Loan A had an outstanding principal amount of $355.0 million, $390.0 million and $395.0 million at June 2024, December 2023 and June 2023, respectively, which is reported net of unamortized deferred financing costs. As of June 2024, interest expense on Term Loan A was being recorded at an effective annual interest rate of 7.1%, including the amortization of deferred financing costs.
The Revolving Credit Facility may be used to borrow funds in both U.S. dollar and certain non-U.S. dollar currencies, and has a $75.0 million letter of credit sublimit. As of June 2024, the Company had no outstanding borrowings under the Revolving Credit Facility and $6.5 million of outstanding standby letters of credit issued on behalf of the Company, leaving $493.5 million available for borrowing against this facility.
The interest rate per annum applicable to borrowings under the Credit Facilities is an interest rate benchmark elected by the Company based on the currency and term of the borrowing plus an applicable margin, as defined therein.
The Credit Agreement contains certain affirmative and negative covenants customary for financings of this type as well as customary events of default. In addition, the Credit Agreement contains financial covenants which require compliance with (i) a total leverage ratio not to exceed 4.50 to 1.00 as of the last day of any test period, with an allowance for up to two elections to increase the limit to 5.00 to 1.00 in connection with certain material acquisitions, and (ii) a consolidated interest coverage ratio as of the last day of any test period to be no less than 3.00 to 1.00. As of June 2024, the Company was in compliance with all covenants and expects to maintain compliance with the applicable covenants for at least one year from the issuance of these financial statements.

13 Kontoor Brands, Inc. Q2 FY24 Form 10-Q

KONTOOR BRANDS, INC.
Notes to Consolidated Financial Statements
(Unaudited)
Senior Notes
On November 18, 2021, the Company entered into an indenture (the “Indenture”) by and among the Company and certain subsidiaries of the Company named as guarantors therein (the “Guarantors”), pursuant to which it issued $400.0 million of unsecured senior notes due November 2029 (the “Notes”) through a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and outside the United States to non-U.S. persons pursuant to Regulation S under the Securities Act. The Notes bear interest at a fixed rate of 4.125% per annum, payable in cash in arrears on May 15 and November 15 of each year.
The Notes had an outstanding principal amount of $400.0 million at June 2024, December 2023 and June 2023, which is reported net of unamortized deferred financing costs. As of June 2024, interest expense on the Notes was being recorded at an effective annual interest rate of 4.3%, including the amortization of deferred financing costs.
The Notes are guaranteed on a senior unsecured basis by the Company’s existing and future domestic subsidiaries (other than certain excluded subsidiaries) that are borrowers under or guarantors of the Credit Facilities or certain other indebtedness. The Indenture governing the Notes contains customary negative covenants for financings of this type. The Indenture does not contain any financial covenants. As of June 2024, the Company was in compliance with the Indenture and expects to maintain compliance with the applicable non-financial covenants for at least one year from the issuance of these financial statements.
Refer to Note 11 in the Company's 2023 Annual Report on Form 10-K for additional information regarding the Company’s debt obligations.

NOTE 8 — FAIR VALUE MEASUREMENTS
Certain assets and liabilities measured and reported at fair value are classified in a three-level hierarchy that prioritizes the inputs used in the valuation process. Categorization within the valuation hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The hierarchy is based on the observability and objectivity of the pricing inputs, as follows:
•Level 1 — Quoted prices in active markets for identical assets or liabilities.
•Level 2 — Significant directly observable data (other than Level 1 quoted prices) or significant indirectly observable data through corroboration with observable market data. Inputs would normally be (i) quoted prices in active markets for similar assets or liabilities, (ii) quoted prices in inactive markets for identical or similar assets or liabilities or (iii) information derived from or corroborated by observable market data.
•Level 3 — Prices or valuation techniques that require significant unobservable data inputs. These inputs would normally be the Company's own data and judgments about assumptions that market participants would use in pricing the asset or liability.

Kontoor Brands, Inc. Q2 FY24 Form 10-Q 14


KONTOOR BRANDS, INC.
Notes to Consolidated Financial Statements
(Unaudited)
Recurring Fair Value Measurements
The following tables present financial assets and financial liabilities that are measured and recorded in the Company's financial statements at fair value on a recurring basis:
 Fair Value Measurement Using
(In thousands)Total Fair ValueLevel 1Level 2Level 3
June 2024
Financial assets:
Cash equivalents:
Money market funds$166,613 $166,613 $— $— 
Time deposits2,280 2,280 — — 
Foreign currency exchange contracts5,750 — 5,750 — 
Investment securities48,711 48,711 — — 
Financial liabilities:
Foreign currency exchange contracts4,786 — 4,786 — 
Deferred compensation51,933 — 51,933 — 
 Fair Value Measurement Using
(In thousands)Total Fair ValueLevel 1Level 2Level 3
December 2023
Financial assets:
Cash equivalents:
Money market funds$145,554 $145,554 $— $— 
Time deposits2,283 2,283 — — 
Foreign currency exchange contracts16,504 — 16,504 — 
Interest rate swap agreements3,253 — 3,253 — 
Investment securities46,250 46,250 — — 
Financial liabilities:
Foreign currency exchange contracts5,121 — 5,121 — 
Deferred compensation49,139 — 49,139 — 
The Company's cash equivalents include money market funds and short-term time deposits that approximate fair value based on Level 1 measurements. The fair value of derivative financial instruments, which consist of foreign currency exchange contracts and, at December 2023, interest rate swap agreements, is determined based on observable market inputs (Level 2), including spot and forward exchange rates for foreign currencies and observable interest rate yield curves for interest rate swap agreements. Investment securities are held in the Company's deferred compensation plans as an economic hedge of the related deferred compensation liabilities and are comprised of mutual funds that are valued based on quoted prices in active markets (Level 1). Liabilities related to the Company's deferred compensation plans are recorded at amounts due to participants, based on the fair value of the participants’ selection of hypothetical investments (Level 2).
Additionally, at June 2024, the carrying value of the Company's long-term debt was $749.7 million compared to a fair value of $711.2 million. At December 2023, the carrying value of the Company's long-term debt was $783.9 million compared to a fair value of $747.1 million. The fair value of long-term debt is a Level 2 estimate based on quoted market prices or values of comparable borrowings.
All other financial assets and financial liabilities are recorded in the Company's financial statements at cost. These other financial assets and financial liabilities include cash held as demand deposits, accounts receivable, short-term borrowings, accounts payable and accrued liabilities. At June 2024 and December 2023, their carrying values approximated fair value due to the short-term nature of these instruments.


15 Kontoor Brands, Inc. Q2 FY24 Form 10-Q

KONTOOR BRANDS, INC.
Notes to Consolidated Financial Statements
(Unaudited)
NOTE 9 — DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
Summary of Derivative Financial Instruments
The Company enters into derivative contracts with external counterparties to hedge certain foreign currency transactions. The notional amount of all outstanding foreign currency exchange contracts was $340.1 million at June 2024, $348.8 million at December 2023 and $333.0 million at June 2023, consisting primarily of contracts hedging exposures to the euro, Mexican peso, Canadian dollar, British pound, Polish zloty and Swedish krona. Foreign currency exchange contracts have maturities up to 20 months.
During 2019, the Company entered into "floating to fixed" interest rate swap agreements to mitigate exposure to volatility in reference rates on the Company's future interest payments. Because these interest rate swap agreements met the criteria for hedge accounting, all related gains and losses were deferred within accumulated other comprehensive loss ("AOCL") and were amortized through the expiration date of April 18, 2024. The notional amount of the interest rate swap agreements was $300.0 million at December 2023 and June 2023.
The Company's outstanding derivative financial instruments met the criteria for hedge accounting at the inception of the hedging relationship. At each reporting period, the Company assesses whether the hedging relationships continue to be highly effective in offsetting changes in cash flows of hedged items. If the Company determines that a specific hedging relationship has ceased to be highly effective, it discontinues hedge accounting. All designated hedging relationships were determined to be highly effective as of June 2024.
The following table presents the fair value of outstanding derivatives on an individual contract basis:
Fair Value of Derivatives
with Unrealized Gains		Fair Value of Derivatives
with Unrealized Losses
JuneDecemberJuneJuneDecemberJune
(In thousands)202420232023202420232023
Derivatives designated as hedging instruments:
Foreign currency exchange contracts$5,735 $16,490 $23,358 $(4,757)$(5,098)$(4,629)
Interest rate swap agreements— 3,253 8,529 — — — 
Derivatives not designated as hedging instruments:
Foreign currency exchange contracts15 14 24 (29)(23)(336)
Total derivatives$5,750 $19,757 $31,911 $(4,786)$(5,121)$(4,965)
The Company records and presents the fair value of all derivative assets and liabilities in the Company's balance sheets on a gross basis, even though certain derivative contracts are subject to master netting agreements. If the Company were to offset and record the asset and liability balances of its derivative contracts on a net basis in accordance with the terms of its master netting agreements, the amounts presented in the Company's balance sheets would be adjusted from the current gross presentation to the net amounts.
The following table presents a reconciliation of gross to net amounts for derivative asset and liability balances:
June 2024December 2023June 2023
(In thousands)Derivative AssetDerivative LiabilityDerivative AssetDerivative LiabilityDerivative AssetDerivative Liability
Gross amounts presented in the balance sheet$5,750 $(4,786)$19,757 $(5,121)$31,911 $(4,965)
Gross amounts not offset in the balance sheet(2,983)2,983 (894)894 (2,038)2,038 
Net amounts$2,767 $(1,803)$18,863 $(4,227)$29,873 $(2,927)

Kontoor Brands, Inc. Q2 FY24 Form 10-Q 16


KONTOOR BRANDS, INC.
Notes to Consolidated Financial Statements
(Unaudited)
The following table presents the location of derivatives in the Company's balance sheets, with current or noncurrent classification based on maturity dates:
(In thousands)June 2024December 2023June 2023
Prepaid expenses and other current assets$5,322 $18,319 $29,167 
Accrued and other current liabilities(2,950)(4,009)(4,497)
Other assets428 1,438 2,744 
Other liabilities(1,836)(1,112)(468)
Cash Flow Hedges
The following tables present the pre-tax effects of cash flow hedges included in the Company's statements of operations and statements of comprehensive income:
Gain (Loss) on Derivatives Recognized in AOCL
(In thousands)Three Months Ended JuneSix Months Ended June
Cash Flow Hedging Relationships2024202320242023
Foreign currency exchange contracts$(11,334)$7,792 $(1,188)$18,129 
Interest rate swap agreements(27)2,017 47 1,708 
Total$(11,361)$9,809 $(1,141)$19,837 
Gain (Loss) Reclassified from AOCL into Income
(In thousands)Three Months Ended JuneSix Months Ended June
Location of Gain (Loss)2024202320242023
Net revenues$(1,215)$(62)$(1,162)$(233)
Cost of goods sold6,290 4,256 11,581 10,248 
Other expense, net85 136 167 296 
Interest expense569 2,435 3,300 4,536 
Total$5,729 $6,765 $13,886 $14,847 
Other Derivative Information
Any contracts that are not designated as hedges are recorded at fair value in the Company's balance sheets. Changes in the fair values of derivative contracts not designated as hedges are recognized directly in earnings. There were no significant amounts recognized in earnings for changes in the fair values of derivative contracts not designated as hedges or the ineffective portion of any hedging relationships during the three and six months ended June 2024 and June 2023.
At June 2024, AOCL included $7.4 million of pre-tax net deferred gains for foreign currency exchange contracts and interest rate swap agreements that are expected to be reclassified to earnings during the next 12 months. The amounts ultimately reclassified to earnings will depend on rates in effect when outstanding derivative contracts are settled.

NOTE 10 — CAPITAL AND ACCUMULATED OTHER COMPREHENSIVE LOSS
Common Stock
During the six months ended June 2024, the Company repurchased 0.7 million shares of Common Stock for $45.0 million, including commissions, under its $300.0 million share repurchase program authorized by the Company's Board of Directors. All shares reacquired in connection with the repurchase program are treated as authorized and unissued shares upon repurchase.

17 Kontoor Brands, Inc. Q2 FY24 Form 10-Q

KONTOOR BRANDS, INC.
Notes to Consolidated Financial Statements
(Unaudited)
Accumulated Other Comprehensive Loss
The following table presents deferred components of AOCL in equity, net of related taxes:
(In thousands)June 2024December 2023June 2023
Foreign currency translation$(102,726)$(91,057)$(94,610)
Defined benefit pension plans2,773 2,913 2,173 
Derivative financial instruments5,017 20,293 32,344 
Accumulated other comprehensive loss$(94,936)$(67,851)$(60,093)
The following tables present changes in AOCL, net of related tax impact:
Three Months Ended June 2024
(In thousands)Foreign Currency TranslationDefined Benefit Pension PlansDerivative Financial InstrumentsTotal
Balance, March 2024$(93,580)$2,831 $22,517 $(68,232)
Other comprehensive income (loss) due to gains (losses) arising before reclassifications(9,146)— (11,861)(21,007)
Reclassifications to net income of previously deferred (gains) losses— (58)(5,639)(5,697)
Net other comprehensive income (loss)(9,146)(58)(17,500)(26,704)
Balance, June 2024$(102,726)$2,773 $5,017 $(94,936)
Three Months Ended June 2023
(In thousands)