Kontoor Brands’ total costs and operating expenses fell five per cent in the second quarter. But revenue was down six per cent and profits fell almost 40 per cent. The maker of Lee and Wrangler jeans has streamlined supply chains and sourced materials for less and is looking at withdrawing from unprofitable markets and sourcing from new markets. The restructuring and cost savings actions taken by the company are paying off and are setting the foundation for improved profitability in the second half of 2019. The popularity of Lee in China has given Kontoor a strong base to launch Wrangler there next year but it has kept manufacturing spread out, allowing it to evade the risks of US-China trade tensions and the resulting tariffs. Kontoor has manufacturing bases in Mexico, Bangladesh and the United States, allowing it to supply the US market from outside China.

The company expects Wrangler sales to accelerate in the second half of the year. Kontoor’s internal brands include: Wrangler, Lee, Rock & Republic and the VF Outlet business. Kontoor Brands is strongly positioned as a leader in the global apparel industry. The business is founded upon a strategic sourcing model and best-in-class supply chain, with industry-leading sustainability standards.