Kontoor Brands wraps up 2024 with an uptick in direct sales for Wrangler and Lee

Kontoor Brands, the parent company of Wrangler and Lee, has reported promising financial results for 2024, maintaining steady sales while increasing profit margins. The group, which recently acquired outdoor and watersports brand Helly Hansen, continues strengthening its financial position with improved profitability.

Kontoor Brands reported annual revenue of $2.61 billion, driven by Wrangler’s 3% increase to $1.81 billion, while Lee, which has a stronger international presence than Wrangler, declined by 6% to $791 million. The group remains heavily focused on its domestic market, which generated $2.09 billion, up 1% from the previous year, with wholesale sales accounting for $1.89 billion. Digital sales grew by 8%, whereas store sales declined by 1%. Operating profit for the year stood at $342 million.

In 2024, Kontoor invested heavily in the U.S. market, launching a national campaign—”Good Morning, Makes Better Days”—that blends American culture, music, and local communities.

“According to Circana and our core U.S. menswear business, Wrangler gained 130 basis points in market share in 2024,” said Tom Waldron, Kontoor’s chief operating officer. “In the fourth quarter, this growth accelerated to 220 basis points, marking our 11th consecutive quarter of market share expansion. It’s clear that Wrangler resonates with consumers across multiple passion points, particularly in sports, culture, and music. By tapping into the intersection of country music and Western culture, we continue to build momentum with successful collaborations, including Cody Johnson—one of the biggest country stars of his generation—and our highly anticipated collection with Grammy Award-winning superstar Lainey Wilson, our biggest collaboration to date.”

International revenue totaled $521 million, down 5% from 2023, despite a 15% increase in digital sales. Wholesale sales declined 7%, with Europe and Asia each contracting by 5% and non-U.S. markets across the Americas declining by 4%.

While sales remained steady, the group’s adjusted gross margin rose 260 basis points, reaching 45.1%. CEO Scott Baxter emphasized the impact of “Jeanius,” Kontoor’s transformation plan aimed at improving profitability, which also led to the acquisition of Helly Hansen. Speaking at an investor conference, Baxter outlined the company’s denim brand growth strategy:

“In 2025, we are actively exploring the introduction of shop-in-shops with key retailers to strengthen our presence and enhance the consumer experience,” he said. “We’ve also made strides in diversifying our product categories. Non-denim bottoms, tops, and T-shirts grew between 4% and 6% in 2024, now accounting for about a third of our total revenue. We plan to continue this trajectory in 2025 with another year of growth.”

Lee is also a key part of this strategy. The group expects its Lee X and MVP Heritage projects to open premium distribution channels and attract new consumer profiles. The brand is working to harmonize its global offering, mainly through new product lines and an expanded women’s non-denim range. In 2025, Lee will launch collaborations with California-based Buck Mason and British designer Paul Smith, following past partnerships with Diesel and Basquiat.

Meanwhile, Wrangler will capitalize on Lainey Wilson’s European tour to strengthen its brand presence and showcase its Western heritage across the continent.

Kontoor Brands expects its revenue to grow between 1% and 3% in 2025. “Our outlook reflects continued sales growth, market share gains, an expanding gross margin, strong operating income, and robust cash generation. The scale advantages of the Jeanius project will support increased investment in our brands and platforms while further enhancing our industry-leading return on investment,” said Scott Baxter, president, CEO, and chairman of the board.

During a conference call with financial analysts, Baxter noted that after a strong January, the company saw a slowdown in U.S. business in February, which he attributed to economic uncertainty.

“Consumers today feel unsettled. If you put yourself in their shoes, they’re worried about their jobs, about the companies they work for. Will those companies face layoffs, tariffs, or other disruptions? When will this uncertainty end, and when will they regain a sense of normalcy? Anytime consumers feel under pressure like this, they tend to become very conservative. Right now, I believe we’re seeing that caution play out across the U.S.,” he explained.

Despite the challenging landscape, Baxter expressed confidence in Kontoor’s ability to navigate market conditions. The company’s current projections do not yet factor in revenue from Helly Hansen, making its integration one of the key challenges for Baxter and his team in 2025.