Owner of Wrangler and Lee brands, Kontoor Brands has raised its outlook for 2022. The company now expects revenues to exceed $2.7 billion, increasing approximately 10 percent compared to 2021, and compared to prior guidance of a high-single-digit percentage gain.
The company now expects first-half revenues to increase in the mid-teens range compared to the prior year versus a low-teens range in previous guidance. Second quarter revenue, consistent with prior guidance, is forecast to be in the range of $640 million to $650 million, increasing 30 percent to 32 percent compared to last year.
Gross margin is projected to be consistent with the adjusted gross margin of 44.6 percent achieved in 2021. Kontoor expects higher inflationary pressures on input costs, transitory expenses, including freight, and adverse mix due to COVID lockdowns in China to weigh on gross margin. However, the benefits from continued structural mix shifts to accretive channels such as digital, ongoing cost saving initiatives and strategic pricing are anticipated to offset these higher costs.