A portfolio pivot at the apparel group positions Wrangler and Helly Hansen as twin growth engines, while Lee – an iconic denim label generating nearly $750 million a year – heads for the exit.
Kontoor Brands has launched a formal sale process for its Lee denim label while delivering first-quarter 2026 results that exceeded expectations – a combination that prompted the North Carolina-based group to raise its full-year earnings guidance.
Revenue from continuing operations – which now exclude Lee, reclassified as a discontinued business – reached $613 million in the quarter ended April 4, 2026, a 45 percent increase on the same period last year. The gain was driven almost entirely by the consolidation of Helly Hansen, the Norwegian outdoor and workwear brand acquired in the second quarter of 2025. Stripping out Helly Hansen, organic revenue from the Wrangler core was up 3 percent, carried by continued market share momentum.
| Kontoor Brands — Income Statement (Continuing Operations) | |||
| Q1, three months ended April 4, 2026 ($ millions)* | |||
| 2026 | 2025 | Change | |
| Net revenues | 613 | 423 | 45.0% |
| Cost of goods sold | 284 | 230 | 23.3% |
| Selling, general and administrative expenses | 239 | 161 | 48.3% |
| Total costs and operating expenses | 523 | 392 | 33.6% |
| Operating income | 90 | 31 | 187.2% |
| Interest expense | (16) | (10) | 64.0% |
| Interest income | 2 | 3 | -34.2% |
| Other expense, net | (3) | (10) | -74.7% |
| Income from continuing operations before income taxes | 74 | 15 | 404.6% |
| Income taxes | (18) | (4) | 314.2% |
| Income from equity method investment | 5 | – | – |
| Income from continuing operations | 61 | 10 | 495.6% |
| Income from discontinued operations, net of tax | 31 | 33 | -3.8% |
| Net income | 92 | 43 | 115.5% |
Source: Kontoor Brands Q1 2026 earnings release, May 7, 2026. Figures in $ millions, rounded from thousands.
* Figures reported in USD. € equivalents to be added at publication-date rate.
Helly Hansen outperforms
Wrangler, the group’s largest brand, generated $436 million globally in the quarter, a 4 percent year-on-year gain (2 percent in constant currency).
Helly Hansen contributed $176 million across the quarter, its first fully consolidated period within the Kontoor reporting structure. The brand’s sport segment generated $120 million, workwear $45 million, and the Musto sailing label $11 million. On a pro forma basis – that is, as if the acquisition had been completed at the start of 2025 – Helly Hansen revenue grew 16 percent year-on-year, ahead of internal expectations.
| Kontoor Brands — Segment Revenues (Continuing Operations) | ||||
| Q1, three months ended April 4, 2026 ($ millions)* | ||||
| 2026 | 2025 | Change | CC change⁽ᵃ⁾ | |
| Wrangler | 436 | 420 | 3.7% | 2.0% |
| Helly Hansen | 165 | – | – | – |
| Total reportable segment revenues | 601 | 420 | 43.1% | 37.0% |
| Other revenues⁽ᵇ⁾ | 12 | 3 | 335.7% | 289.0% |
| Total net revenues | 613 | 423 | 45.0% | 39.0% |
Source: Kontoor Brands Q1 2026 earnings release, May 7, 2026. Figures in $ millions, rounded from thousands.
(a) Constant currency (CC) excludes the translation impact of changes in foreign currency exchange rates. CC % changes sourced directly from company disclosure; not independently recalculated.
(b) Other revenues include sales and licensing of the Musto and Chic brands, other company-owned brands and private label apparel.
* Figures reported in USD. € equivalents to be added at publication-date rate.
Fewer brands, more focus: what the focus on Helly Hansen means for the outdoor market
Kontoor’s board approved the Lee divestiture process during the first quarter of 2026. The company says multiple parties have expressed interest and that it expects to sign a definitive agreement before year-end.
Over the past three years, several holding companies – including VF Corporation and PVH Corp – have shed heritage labels to concentrate capital on brands with higher growth trajectories. For Kontoor specifically, the expected proceeds are earmarked to accelerate debt reduction (long-term debt stood at $1.13 billion at end-March 2026), fund a new buyback program and increase investment behind Wrangler’s international expansion and Helly Hansen’s European distribution.
The restructuring has direct implications for the European sporting goods and workwear market. Helly Hansen moves from junior partner in a three-brand group to co-headline act alongside Wrangler, with capital and organizational bandwidth likely to shift accordingly. Its position across Nordic ski retail, professional workwear and sailing – and its established European distribution network – makes the brand strategically relevant to retailers and category managers operating in those segments across EMEA.
The Lee sale, once concluded, will transfer one of the world’s better-known denim labels to a new owner. Prospective buyers are likely to include private equity consolidators, regional apparel operators or licensing-focused holding companies. The price achieved – not yet disclosed – will provide an early signal of current market appetite for mid-tier heritage fashion labels.
