In its first quarter of the current financial year Kontoor Brands, Inc. a global lifestyle apparel company, increased its revenues by 29 per cent to $652 million on a reported basis and by 27 per cent on constant currency basis.
The company’s revenue increases compared to the prior year were primarily driven by strength in digital, including its own website and digital wholesale, as well as improved performance across the US. wholesale business and accelerating trends in international markets.
Its revenues in the US increased by 29 per cent to $488 million over the same period in the prior year driven by growth in US wholesale, new business development wins and strength in Digital. Compared to adjusted revenue in the first quarter of 2019, reported revenue increased 11 percent, with its own website increasing 70 percent and digital wholesale increasing 132 percent.
Kontoor Brands’ gross margin increased by 830 basis points to 46.1 percent of revenue, compared to gross margin during the same period in the prior year, or 820 basis points on an adjusted basis. Favorable channel, customer and product mix, as well as quality-of-sales initiatives, were the primary drivers of gross margin gains in the quarter.
Operating income on a reported basis was $93 million. Adjusted operating income was $119 million, increasing 437 percent compared to the same period in the prior year. Adjusted operating margin increased 1,390 basis points to 18.3 percent of revenue, reflecting the benefits of gross margin improvements, fixed cost leverage on better revenue and tight expense control. Adjusted operating margin increased 750 basis points compared to the first quarter of 2019.
Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) on a reported basis was $102 million. Adjusted EBITDA was $127 million, increasing 325 percent compared to the same period in the prior year. Adjusted EBITDA margin increased 1,360 basis points to 19.5 percent of revenue. Adjusted EBITDA margin increased 750 basis points compared to the first quarter of 2019.