KTB: Management Meeting Takes: Breaking Up with Lee, Accelerating Growth

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KTB: Management Meeting Takes: Breaking Up with Lee, Accelerating Growth

Equity Research

Company Update — May 18, 2026

Retailing, Specialty Softlines, and E-commerce

Kontoor Brands, Inc.

Management Meeting Takes: Breaking Up with Lee, Overweight

Accelerating Growth Price Target: $100.00

Our Call Ticker KTB

Upside/(Downside) to Target 61.9%

We spent last week with KTB mgmt (CFO + IR), coming away comfortably reiterating our

"Top Pick" call - w/ recent weakness creating a compelling buying oppy. Notably, post Lee Price (05/15/2026) $61.76

sale, they see a faster growing/more profitable portfolio into the future. 52 Week Range $53.55 - 87.00

Market Cap (MM) $3,458

All About Lee. As expected, one of the main topics was why divest Lee. For KTB, now is Enterprise Value (MM) $3,865

the best time to sell given: 1) the turnaround is in full swing and set to inflect (growth Average Daily Value (MM) $52

planned in 2Q) - aiding asset value, 2) the brand became strategically misaligned with Dividend Yield 3.3%

KTB goals/hurdles (focus shifts 100% to HH + Wrangler) and 3) potential to pull-fwd cash

flows while freeing up investment dollars for greater ROI initiatives. We estimate a sale $ (Dec) Q1 Q2 Q3 Q4 FY

price likely fetches ~$625M (not confirmed by mgmt). EPS

2026E 1.06 A 0.91 E 1.37 E 1.94 E 5.25 E

More on Lee Breakup. KTB’s focus today is on function over fashion. Specifically, there 2027E 1.34 E 1.19 E 1.83 E 2.56 E 6.86 E

is very little overlap where Lee plays (mid-tier/undifferentiated retail) relative to the much

Source: Company Data, Wells Fargo Securities estimates, and Factset.

stronger Wrangler (mass/Western specialty). Wrangler is a 20%+ margin, replenishment NA = Not Available, NC = No Change, NE = No Estimate

brand.