The February year-to-date revenue of Kontoor Brands declined by mid-single digits compared to adjusted results in the prior year, with approximately one-third of the drop-off due to China, as impacts from COVID-19 weighed heavily in the region.

The brand’s March revenue declined significantly, particularly in the U.S. and Europe, as retail and owned-door closures and governmental stay-at-home orders spread. Given that the wholesale channel represented approximately 85 percent of the company’s global revenue in 2019, continued customer door closures resulted in a material decline for April revenue, but digital trends have been improving in recent weeks.

In the US, the company’s largest online and brick-and-mortar retail partners are leaders in their respective channels of distribution, and while volumes have been reduced, sales to most of the company’s largest customers are continuing.

So far, Kontoor has not experienced significant service disruptions to customers given its global, diversified supply chain network. As order volumes decelerated late in the first quarter, production in the company’s owned manufacturing facilities was adjusted to align with demand and tightly manage inventory.

Kontoor finished the first quarter with $479 million in cash and cash equivalents, and approximately $1.4 billion in total long-term debt. Over the past 60 days, the company has taken several proactive actions to enhance liquidity, including drawing down $475 million from its revolving credit facility and amending the terms of its credit facility to provide future period covenant relief and increased flexibility, but requiring netted cash not to exceed $250 million.