Earnings Update: Kontoor Brands, Inc. (NYSE:KTB) Just Reported Its Full-Year Results And Analysts Are Updating Their Forecasts

One of the biggest stories of last week was how Kontoor Brands, Inc. (NYSE:KTB) shares plunged 25% in the week since its latest annual results, closing yesterday at US$67.27. Results were roughly in line with estimates, with revenues of US$2.6b and statutory earnings per share of US$4.36. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Kontoor Brands

Taking into account the latest results, the most recent consensus for Kontoor Brands from six analysts is for revenues of US$2.66b in 2025. If met, it would imply a satisfactory 2.1% increase on its revenue over the past 12 months. Per-share earnings are expected to grow 15% to US$5.12. Before this earnings report, the analysts had been forecasting revenues of US$2.67b and earnings per share (EPS) of US$5.24 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

The consensus price target held steady at US$90.50, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Kontoor Brands at US$108 per share, while the most bearish prices it at US$59.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Kontoor Brands' past performance and to peers in the same industry. It's pretty clear that there is an expectation that Kontoor Brands' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 2.1% growth on an annualised basis. This is compared to a historical growth rate of 3.3% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.4% annually. Factoring in the forecast slowdown in growth, it seems obvious that Kontoor Brands is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Kontoor Brands' revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$90.50, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Kontoor Brands going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Kontoor Brands that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.