Kontoor Brands raises quarterly dividend 2% to $0.54 a share

Key Facts

Kontoor Brands' board approved a 2% increase in the quarterly cash dividend on its common stock to $0.54 a share, the company said in its announcement on October 22, 2026. The increase amounts to $0.01 a share from the previous dividend, which the company set at $0.53 a share in its July announcement. The decision is part of a capital allocation program that includes cash dividends, share repurchases and voluntary debt repayment, according to the company. Kontoor returned $80 million to shareholders in the second quarter of 2026 through cash dividends and share repurchases. In its annual outlook, the company said it intended to "return more than $900 million of capital in 2026 through share repurchases, dividends and voluntary debt repayment," including expected proceeds from the sale of its Lee business.

On operating performance, revenue from continuing operations totaled $584 million in the second quarter of 2026, according to the company's earnings release. That represented growth of 19% from the same period a year earlier, with the Helly Hansen acquisition contributing to the increase. Kontoor attributed the improvement in its adjusted gross margin to benefits from Project Jeanius and the acquisition of the outdoor apparel brand. It also cited sales channel and product mix, as well as pricing, among the factors in its earnings release. The company raised its fiscal 2026 adjusted earnings per share guidance range for continuing operations to between $5.25 and $5.35. Its previous guidance range was between $5.15 and $5.25 a share, before the revision announced with its second-quarter results.

Kontoor's portfolio includes Wrangler, Lee and Helly Hansen, spanning lifestyle apparel, outdoor apparel and workwear, according to the company's description of its operations. In the first quarter, the company launched a competitive process to divest its Lee business, according to its earnings release for that period. It classified the business's results as discontinued operations, while the revenue and adjusted earnings per share cited in its second-quarter results are presented on a continuing operations basis. Kontoor signed a definitive agreement to sell its Lee business to Authentic Brands Group at an initial transaction value of $750 million. The agreement includes the opportunity to receive an additional $250 million in subsequent years after the sale. That additional consideration is tied to Lee's performance, according to the transaction announcement, and receipt remains conditional on the performance specified in the agreement.

In its growth plan for Helly Hansen, Kontoor set a revenue target for the brand of more than $1.1 billion by 2030, according to its strategy announcement. The figure represents the revenue target the company announced for the brand as part of its long-term plan, after the acquisition contributed to second-quarter revenue growth. Its announced financial targets also include cumulative cash generation of more than $500 million through 2030. At the group level, Kontoor forecast cash flow from operations of about $450 million for fiscal 2026, according to its second-quarter earnings release. That forecast includes a contribution from the Lee business, classified as discontinued operations, alongside the group's other businesses included in its expected operating cash flow for the year.

After completing the Lee sale, Kontoor intends to allocate $400 million of the expected transaction proceeds to fund an accelerated share repurchase agreement, according to the plan announced with its results. It intends to use the remaining proceeds for voluntary debt repayment. This use of the sale proceeds is contingent on completion of the transaction, according to the company. For the new quarterly cash dividend, the board set eligibility for shareholders of record at the close of business on December 8, 2026. The company is scheduled to pay the dividend to those shareholders on December 18, 2026, according to the date specified in the board's announcement.