Kontoor Brands, Inc. (NYSE:KTB) announced Thursday that it will sell its Lee business to Authentic Brands Group in a deal valued at up to $1 billion, including an initial $750 million payment and a potential $250 million earnout tied to future performance.

The company said the sale will help sharpen its focus on higher-growth brands, including Wrangler and Helly Hansen, while improving capital flexibility and supporting share repurchases and debt reduction.

The transaction is expected to close in the second half of 2026, pending regulatory approvals and customary closing conditions.

Earnings Snapshot

This month, Kontoor Brands reported first-quarter adjusted earnings of $1.06 per share, missing analyst estimates of $1.12. Revenue totaled $613.3 million, below Wall Street expectations of $782.0 million.

Kontoor Brands raised its full-year 2026 outlook following the planned divestiture of its Lee business, which will now be reported as discontinued operations.

The company expects total 2026 revenue, including discontinued operations, to range from $3.41 billion to $3.46 billion, slightly above its prior forecast of $3.40 billion to $3.45 billion. Revenue from continuing operations is projected at $2.66 billion to $2.71 billion, while the Lee business is expected to contribute about $750 million in revenue.

Adjusted EPS, including discontinued operations, is now forecast between $6.60 and $6.70, up from the previous range of $6.40 to $6.50. The Lee business is expected to contribute about 90 cents per share, or about $1.45 per share, including overhead costs previously allocated to the segment.

Adjusted EPS from continuing operations is expected in the range of $5.15 to $5.25, reflecting approximately 55 cents per share in unmitigated overhead and other expenses tied to the Lee business.

Kontoor said it expects the Lee divestiture to have an immaterial impact on EPS within 12 to 18 months as it offsets lost earnings through capital deployment, restructuring, and cost-reduction measures.

In addition, the company announced a new $750 million share repurchase authorization.

Analyst Consensus & Recent Actions: The stock carries a Buy rating with an average price forecast of $100.33. Recent analyst moves include:

  • Barclays: Overweight (Raises forecast to $96.00) (May 11)
  • BTIG: Buy (Maintains forecast to $100.00) (May 1)
  • Goldman Sachs: Buy (Raises forecast to $95.00) (March 4)

Kontoor Brands Price Action

KTB Price Action: Kontoor Brands shares were up 7.97% at $70.28 at the time of publication on Thursday, according to Benzinga Pro data.

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