Kontoor Brands, Inc., a global lifestyle apparel company, with a portfolio led by two of the world’s most iconic consumer brands, Wrangler® and Lee®, has recently published its Outlook for Fiscal 2021.
2021 Fiscal Outlook–
- The Company is raising its fiscal 2021 Outlook. While the impacts from the COVID-19 pandemic and macroeconomic factors remain uncertain, the Company is updating its fiscal 2021 guidance as follows:
- Revenue is now expected to increase in the mid-teens range over 2020, to $2.39 billion to $2.42 billion, as compared to a low-teens range in the prior guidance, including a mid-single-digit impact from the VF Outlet actions and India business model change.
- Gross margin is now expected to increase by 330 to 380 basis points above the adjusted gross margin of 41.2 percent achieved in 2020 to 44.5 percent to 45.0 percent of revenue. This compares to prior guidance of a 230 to 270 basis points increase. The increase reflects higher anticipated growth in more accretive channels such as Digital and International.
- SG&A investments will continue to be made in brands and capabilities. Due to the strengthening revenue and gross margin outlook, the Company expects to amplify SG&A investments in demand creation, Digital and International expansion to support second half 2021 revenue and accelerate momentum for 2022. These increases will be partially mitigated by ongoing tight expense controls and sustained structural post-pandemic cost containment initiatives.
- Adjusted EPS is now expected to be in the range of $3.90 to $4.00 as compared to $3.70 to $3.80 in the prior guidance. This EPS guidance does not assume the benefit of any share repurchases.
- Capital Expenditures are expected to be in the range of $40 million to $50 million, including $25 million to $30 million associated with the implementation of the Company’s new global ERP system.
- For 2021, an effective tax rate of approximately 22 percent is expected, while interest expense is expected to be approximately $40 million to $45 million.