The owner of Lee and Wrangler saw its share price tumble this morning after it missed third-quarter estimates.
Kontoor Brands Inc.’s shares slid 8.5 percent, or $3.23, to $34.98 on the back of worse than expected results.
Revenue decreased 9 percent year-over-year to $638 million in the third quarter ended Sept. 28. Analysts polled by FactSet had been predicting $646 million.
It cited the impact of the Sears bankruptcy, foreign currency headwinds and actions taken to exit an underperforming country as reasons behind the decline.
A breakdown of the sales numbers showed that Wrangler’s revenue decreased 7 percent to $367 million, while Lee’s fell 8 percent to $232 million.
Net income was $14.5 million, or 25 cents a share. A year earlier, it was $72 million, or $1.25 a share.
Nevertheless, management remained optimistic. “Third-quarter 2019 results were in line with our expectations, as we continued to execute on our strategy of setting the foundation for long-term operational success,” said Scott Baxter, president and chief executive officer of Kontoor.
“We’re beginning to realize the benefits of the previously announced restructuring and cost-savings initiatives, while we continue to stabilize and globalize our organization,” he added.
For the full year, the company anticipates delivering on the lower half of the previously announced adjusted EBITDA outlook for fiscal 2019 of $340 million to $360 million.
Revenue is still expected to exceed $2.5 billion, reflecting a mid-single-digit decline compared with full-year 2018.
The Greensboro, N.C.-based Kontoor was previously part of VF Corp., but was spun off into a separate entity earlier this year.