KTB Stock Forecast & Price Target

Kontoor Brands Inc. anticipates a revenue increase of 0.3% to $2.61 billion for the fiscal year 2024, demonstrating a stable outlook amidst slight growth expectations. The company is projected to see an expansion in adjusted gross margin by 230 basis points to 44.8%, attributed to lower product costs and improved supply chain efficiencies, which highlights operational effectiveness. Furthermore, strong point-of-sales growth for both Wrangler and Lee brands and favorable trends in the denim category indicate positive momentum that could benefit the company in both the short and long term.

Kontoor Brands is experiencing challenges that contribute to a negative outlook, particularly due to revenue projections that suggest stagnation and potential declines across its brands, with Lee expected to see a decrease of 1.5% year-over-year. Despite achieving some growth in the Wrangler segment, the company's overall revenue estimates for upcoming quarters have been revised downward, reflecting a cautious sentiment as it anticipates only modest increases. Additionally, the reliance on the U.S. market, where retailer inventory management actions have negatively impacted sales, raises concerns about the sustainability of Kontoor Brands' revenue growth moving forward.