Kontoor Brands, Inc. (KTB) stock analysis

P/E above its 5-year median

Kontoor Brands's P/E of 22.1 is above its own 5-year median of 15.3.

P/E above the industry

Kontoor Brands's P/E of 22.1 is above the Apparel and Other Finished Products Made from Fabrics and Similar Materials median of 21.3.

EV/EBITDA below its 5-year median

Kontoor Brands's EV/EBITDA of 10.4 is below its 5-year median of 10.9.

P/B above the industry

Kontoor Brands's price-to-book of 7.73 is above the Apparel and Other Finished Products Made from Fabrics and Similar Materials median of 2.23.

Trading above fair value

The share price of $79.34 is above our fair value estimate of $71.67.

Margin of safety under 20%

The price is 10.7% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 6.2% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -2.1% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -7.5% over the last twelve months, against a 5-year average of 27.3% a year.

Growing faster than the industry

Revenue grew 51.4% over the last twelve months; the Apparel and Other Finished Products Made from Fabrics and Similar Materials median is 3.9%.

Guidance raised

Kontoor Brands raised its Full year 2026 total cash from operations outlook on Aug 12, 2026.

Gross margin improving

Gross margin was 49.9% over the last twelve months, against 43.6% a year earlier.

Return on equity over 15%

Return on equity was 36.9% over the last twelve months and averaged 95.2% over five years.

Return on capital over 10%

Return on invested capital was 14.4%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Kontoor Brands's return on equity of 36.9% is above the Apparel and Other Finished Products Made from Fabrics and Similar Materials median of 9.5%.

Earnings grew over 5 years

Net income grew 27.3% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 5.8% over the last twelve months, against a 5-year average of 8.5%.

Net margin above the industry

Kontoor Brands's net margin of 5.8% is above the Apparel and Other Finished Products Made from Fabrics and Similar Materials median of 3.9%.

High debt

Debt is 203% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 1080% five years ago to 203%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 38.1% of total debt.

Interest well covered

Operating income covers interest expense 6.9 times.

Short-term assets cover short-term debts

Current assets are 1.69 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 3.28; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Kontoor Brands paid dividends worth 2.7% of the share price over the last twelve months.

Yield below Treasuries

The 2.7% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Kontoor Brands yields 2.7%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 8 fiscal years.

Covered by earnings

Dividends take 58.0% of net income.

Covered by free cash flow

Dividends take 28.3% of free cash flow.