In FY23, Kontoor Brands expects revenue to increase at a low-single digit percentage over FY22, with first and second half performance relatively balanced. The US is expected to drive first-half performance, with momentum in point-of-sale (POS), share gains, and direct-to-consumer (DTC) sales. The second half of FY23 is expected to be more challenging, with macro consumer demand conditions in the US potentially being more affected, while the China market is expected to fully reopen, the company said in a press release.
The company plans to continue making investments in its brands and capabilities to support long-term profitable revenue growth. This includes investments in demand creation, DTC sales, and international expansion. Compared to adjusted selling, general, and administrative expense in FY22, the company expects full-year selling, general, and administrative expense to increase at a mid-single digit percentage. Capital expenditures are expected to be in the range of $35 million to $40 million, primarily to support IT projects, growth in owned retail stores, and manufacturing and distribution investments.
Kontoor Brands expects gross margin to be in the range of 43.5 per cent to 44 per cent in FY23, while the revenue is projected to increase at a low-single digit percentage over FY22.
The company plans to invest in demand creation, DTC sales, and international expansion.
Capital expenditures are expected to be in the range of $35 million to $40 million.
“We continue to assume macroeconomic pressures will weigh on consumer demand in the second half of 2023, particularly in the US. However, we believe that our increasingly diversified growth across channels, categories and geographies, enabled by strategic investments in DTC, demand creation and data analytics will generate more sustained, profitable growth over time. This gives us confidence in reaffirming our 2023 outlook, despite the uneven backdrop. These resilient fundamentals should, when coupled with our solid balance sheet and capital allocation optionality, uniquely position us to yield superior returns for all Kontoor Brands’ stakeholders going forward,” said Scott Baxter, president, chief executive officer and chair of Kontoor Brands.
Fibre2Fashion News Desk (DP)
