Helly Hansen’s fourth-quarter revenue grew 10 percent and the brand’s earnings outperformed plan by 50 percent, Kontoor Brands’ officials said on an analyst call. Boosted by further investments in marketing and talent as well as expanded distribution, Helly’s sales growth is expected to accelerate starting in 2027.

Kontoor, a spin-off from VF Corp. which also owns the Wrangler and Lee denim brands, acquired Helly from Canadian Tire Corporation on June 2, 2025 for approximately $900 million.

“Helly is a growth asset,” said Scott Baxter, Kontoor’s CEO and chairman, on the call. “In 2026, we will further integrate the business while taking steps to accelerate growth and profitability. Integration and growth are not sequential; they are parallel. In the seven months under our ownership, we have strengthened the leadership team, delivered better-than-expected revenue and earnings accretion, and leveraged our multi-brand platform to drive greater synergies, operational discipline, and cash generation. We are bringing a renewed sense of focus to Helly’s strategy while leveraging synergy opportunities to accelerate investments across the organization.

He added, “We are in the early innings of unlocking geographic, category, and channel opportunities that will begin to accelerate in 2027 and beyond.”

Kontoor Brands’ officials promised to offer a more detailed vision of its growth strategy for Helly at an Investor Day being held on September 2 at Helly’s headquarters in Oslo, Norway.

Helly’s Sales Climb 10 percent in Q4, 7 percent in Full Year

In the fourth quarter, Helly’s global sales increased 10 percent on a pro-forma basis to $251 million, with broad-based growth across both sport and workwear, and in all geographies and product categories.

On a reported basis, Helly’s sales were $254 million, including the benefit of $3 million from the 53rd week. Sport and Workwear revenue was $194 million and $54 million, respectively. Musto brand revenue was $7 million. U.S. revenue was $68 million and international revenue was $186 million.

On a full-year pro forma basis, Helly’s revenue of over $700 million increased 7 percent.

Within Sport, full-year pro-forma revenue at Helly increased at a high single-digit rate, to $354 million. Growth was balanced across wholesale, digital, and brick-and-mortar retail.

“We saw sell-through was strong during the fall/winter season,” said Joe Alkire, CFO and global head of operations, about Helly’s Sport segment. “Retail inventory levels are lean, and we are chasing demand across several of the brand’s largest product franchises.”

In Workwear, Helly’s full-year pro forma revenue also increased at a high single-digit rate, to $105 million. Growth accelerated to a mid-teen rate in the second half of the year, driven by greater focus on new customer acquisition and key account growth as well as improving construction activity in Europe. Alkire said, “We have seen this momentum continue in early 2026. The global workwear opportunity is significant.”

By region, U.S. revenue was $113 million and international revenue was $362 million. Musto brand revenue was $16 million.

Baxter said Helly is benefiting from product wins.

“We won six Red Dot Design Awards, our most ever in a single year, and recently we were awarded four ISPO awards, including a gold for LIFA Merino Kit EVO,” said Baxter. “Our innovation engine is fueled by our connection with professionals. In 2025, we celebrated the fourth anniversary of International Ski Patrol Day, partnered with national ski teams in Norway and Canada, and deepened our connection with the ocean and sail communities as an official partner of The Ocean Race Europe.”

He added, “The connection to professionals distinguishes Helly from among our peers and will be foundational to the growth acceleration in the coming years.”

Alkire added, “Helly’s product and innovation pipeline is unmatched, and demand for premium workwear is increasing around the world driven by a combination of structural factors and consumer trends we believe will support years of profitable growth at scale.”

Helly’s China Joint-Venture Business Delivering Healthy Growth

Helly Hansen’s revenue results exclude the direct contribution of the China joint venture with its partner Youngor, as the results are not consolidated under the equity method of accounting. On a full-year basis, Helly’s China business generated revenue of approximately $100 million, increasing 95 percent. Including the China JV, Helly’s global revenue increased at a mid-teen rate on a pro-forma basis for the full year.

Said Alkire, “As a reminder, the China JV for Helly was established just five years ago, so the business is just getting started and the market opportunity is massive.”

Alkire said the economics of the 50/50 JV are reflected in royalty income and Kontoor’s share of the net income contribution, as accounted for under the equity method. The China JV generates a mid-teen operating margin, and another year of strong revenue and profit growth is projected in 2026.

The CFO told analysts, “We are very pleased with the performance of the China JV. We have got a strong partner in Youngor. We have got a strong management team on the ground in China that is executing very well. Part of our acquisition thesis was a view that the China business was on the cusp of an inflection, and that is exactly what has played out. This business is beginning to contribute quite meaningfully to revenue and earnings. So, as part of our integration strategy, we are connecting the Helly China business more closely with the brand centered in Oslo. We are reaping the early benefits of that stronger collaboration between those two teams. So 2026, we expect another year of strong revenue and earnings growth for the JV, north of 50 percent.”

Helly’s Earnings Accretion Better Than Planned

Helly’s segment operating profit reached $28.6 million in the fourth quarter, exceeding Kontoor’s outlook by more than 50 percent driven by stronger revenue growth, gross margin expansion, and operating expense leverage due in part to synergies. Alkire said the integration of Helly is “progressing well. While still early, we are driving significant benefits as a more synergistic brand owner with a streamlined organizational structure and a strong management team in place in Oslo”

Alkire added, “Operationally, we are driving increased discipline into the Helly business globally. On the front end, we are optimizing distribution and elevating Helly’s premium position in the marketplace. We are investing more meaningfully in the commercial and product organizations and in areas such as consumer insights and innovation. We are also scaling demand creation investments with an increased focus on brand building to drive increased awareness ahead of Helly’s 150th anniversary next year.

“On the back end, we are strengthening the inventory management and demand planning capabilities of the business and investing in a more robust planning organization. We are seeing early returns on these investments such as improved sales quality, higher gross margin, and an ability to capture more revenue opportunities. Leveraging our strong supply chain and operational capabilities, we are also driving a significant increase in working capital efficiency. More specifically, we have reduced inventory days outstanding by approximately 100 days compared to prior year.”

In the seven months under Kontoor’s ownership, Helly generated $100 million of cash from operations. As a result, Kontoor is ahead of its planned deleverage path, supporting increasing capital allocation optionality over both the near and long term.

In 2026, Alkire expects to unlock additional working capital benefits and drive another year of strong cash generation at Helly.

“Helly Hansen is a growth asset,” said Alkire. “The brand provides access to significant growth vectors in the attractive outdoor and workwear TAMs [total addressable markets] globally. The business diversifies our portfolio and complements our operational strengths. We expect Helly to be one of Kontoor Brands, Inc.’s largest growth engines and a significant contributor to revenue and earnings growth in the years ahead. We are positioning the brand for accelerated growth in 2027 and beyond.”

Helly’s Sales Growth Seen Accelerating Starting in 2027

For the current year, Helly’s sales are expected to expand in the mid-single to high-single digit range, slowing from its recent pace of 10 percent in the fourth quarter and 11 percent in the third quarter.

Baxter said investments continued to be made to position the brand for accelerated growth starting in 2027. He said, “We are making a significant investment in the team from a product standpoint in headquarters in Oslo, building out a significant and real team in the U.S. in North America, which we have not had before. We have got some really strong leaders in that marketplace. But we need to surround that team with added talent and build a fully capable team, which is going to be a big unlock for us from a brand standpoint going forward.”

Baxter also said that in the first half of 2026, Helly has “not invested greatly from a marketing standpoint, but you are going to see it in a very significant way in the second half to build momentum going into 2027.”

Baxter said the expected growth uptick in 2027 is also expected to benefit from expanded distribution.

He said a major part of the reason Kontoor acquired Helly is because it sees the brand as underpenetrated in North America. He noted that Helly does “not have an incredible amount of distribution right now in North America or that large of a DTC channel.”

Baxter elaborated, “We are thinking about the right distribution in the U.S. marketplace going forward and making sure we seed that in the correct way and really creating an atmosphere that there is a lot of opportunity for growth for a very long time for the brand in this marketplace and then continuing to accelerate the rest of the world too.”

Baxter, who formerly oversaw brands including The North Face and Vans at VF as group president, Outdoor & Action Sports, Americas, believes retailers are hungry for a fresh outdoor brand. He told analysts, “From my vantage point of doing this with another big outdoor brand for a very long time, I think that what we are seeing from key retailers is that they would like to go ahead and have another big, strong, growing brand in their portfolio. I think there is just right now a little bit of fatigue with some other brands, and this is exciting. It is new. It is really good product. We are really dialed in.”

He added, “You heard us talk about some of the awards that we have won, and that brings footsteps into retailers and it brings excitement. So we are in a really great period right now where the opportunity—the phone calls are not outgoing, they are inbound—where people are asking, you know, ‘Hey, we would really like to talk to you about you being part of this year going forward,’ and we have the opportunity to be a little bit selective, which is really nice.”

Baxter said Helly will see “some pretty significant rollouts” in the second half of this year.

Helly is also expected to deliver improved earnings in 2026. Said Alkire, “We do expect strong earnings growth from Helly in 2026. That is going to be driven by both gross and operating margin expansion. We expect to grow operating earnings somewhere in that low-teen rate kind of range in terms of the increase over 2025. That is inclusive of synergies, that is inclusive of the investments we are making behind the business.

Kontoor Brands’ Q4 Results Top Guidance

Companywide, Kontoor reported earnings on an adjusted basis that climbed 26 percent in the fourth quarter ended January 1 as revenues surged 46 percent, including a 36 percentage-point benefit from the acquisition of Helly Hansen. Results also benefited from strong growth from the Wrangler brand.

Sales in the quarter of $1.02 billion topped company guidance in the range of $970 to $980 million. Adjusted EPS of $1.73 topped guidance of $1.64.

Among Kontoor’s other brands, Wrangler’s global revenue was $562 million in the quarter, up 12 percent from the prior year. Revenue growth benefited by approximately 8 percentage points from the 53rd week. Wrangler U.S. revenue increased 12 percent, driven by a 16 percent increase in direct-to-consumer and an 11 percent increase in wholesale. Wrangler international revenue increased 10 percent compared to the prior year, driven by a 35 percent increase in direct-to-consumer and a 6 percent increase in wholesale.

Lee brand global revenue was $198 million, up 2 percent from the prior year. Revenue growth benefited by approximately 6 percentage points from the 53rd week. Lee U.S. revenue increased 9 percent, driven by 9 percent growth in wholesale and 8 percent in direct-to-consumer. Lee international revenue decreased 6 percent, driven by a decline in wholesale, partially offset by an increase in direct-to-consumer.

Gross margin increased 250 basis points to 46.2 percent on a reported basis and increased 210 basis points to 46.8 percent on an adjusted basis compared to the prior year, including a 180-basis point benefit from the acquisition of Helly Hansen. Excluding Helly Hansen, adjusted gross margin increased 30 basis points, driven by benefits from Project Jeanius and channel and product mix, partially offset by increased product costs and the impact of previously enacted tariff increases, net of pricing actions.

Selling, General & Administrative (SG&A) expenses were $350 million, or 34.3 percent of revenue on a reported basis. On an adjusted basis, SG&A expenses were $326 million, or 32.0 percent of revenue. Excluding Helly Hansen, adjusted SG&A expenses were $234 million, an increase of 11 percent, driven primarily by higher demand creation investments and volume-based variable expenses, including the impact of the 53rd week, partially offset by the benefits from Project Jeanius.

Operating income was $121 million on a reported basis. On an adjusted basis, operating income was $150 million, an increase of 48 percent compared to the prior year. Adjusted operating income includes $8 million of incremental demand creation and brand investments relative to the company’s prior outlook. Adjusted operating margin of 14.8 percent increased 30 basis points compared to the prior year. Excluding Helly Hansen, adjusted operating income was $110 million, up 9 percent from the prior year.

Earnings per share (EPS) were $1.31 on a reported basis. On an adjusted basis, EPS was $1.73, representing an increase of 26 percent, including a 44-cent contribution from Helly Hansen. Adjusted EPS includes 10 cents of incremental demand creation and brand investments relative to the company’s prior outlook.

Full Year 2025 Income Statement Review
Revenue was $3.15 billion and increased 21 percent compared to the prior year, including an 18-percentage point benefit from the acquisition of Helly Hansen. Excluding the revenue contribution from Helly Hansen and the 53rd week, revenue increased 1 percent.

Wrangler brand global revenue was $1.91 billion, up 6 percent from the prior year. Revenue growth benefited by approximately 2 percentage points from the 53rd week. Wrangler U.S. revenue increased 6 percent, driven by a 14 percent increase in direct-to-consumer and a 6 percent increase in wholesale. Wrangler international revenue increased 3 percent compared to the prior year, driven by a 10 percent increase in direct-to-consumer and a 2 percent increase in wholesale.

Lee brand’s global revenue was $750 million, down 5 percent from the prior year. Revenue growth benefited by approximately 1 percentage point from the 53rd week. Lee U.S. revenue decreased 4 percent, driven by a 5 percent decrease in wholesale, partially offset by a 5 percent increase in direct-to-consumer. Lee international revenue decreased 7 percent driven by a decline in wholesale, partially offset by an increase in direct-to-consumer.

Operating income was $337 million on a reported basis. On an adjusted basis, operating income was $468 million, an increase of 23 percent compared to the prior year. Adjusted operating margin of 14.9 percent increased 30 basis points compared to the prior year. Excluding Helly Hansen, adjusted operating income was $423 million, up 11 percent from the prior year, resulting in a 120-basis point increase in adjusted operating margin to 15.8 percent of revenue.

Earnings per share (EPS) were $4.05 on a reported basis. On an adjusted basis, EPS was $5.59, representing an increase of 14 percent, including a $0.35 contribution from Helly Hansen.

Balance Sheet and Liquidity Review
The company ended the fourth quarter with $108 million in cash and cash equivalents and $1.13 billion in long-term debt. During the quarter, the company made a $200 million voluntary term loan payment.

At the end of the fourth quarter, the company had no outstanding borrowings under the Revolving Credit Facility and $493 million available for borrowing against this facility. At the end of the fourth quarter, the company’s pro-forma net leverage ratio was 2.0 times.

Inventory at the end of the fourth quarter was $567 million, including inventory from the acquisition of Helly Hansen. Total inventory at the end of the fourth quarter decreased $198 million on a sequential basis from the third quarter.

As previously announced, the company’s Board of Directors declared a regular quarterly cash dividend of $0.53 per share, payable on March 20, 2026, to shareholders of record at the close of business on March 10, 2026.

The company returned $54 million to shareholders through dividends and share repurchases during the fourth quarter, including the repurchase of $25 million of common stock. For the full year, the company returned approximately $140 million to shareholders through dividends and share repurchases. The company has $190 million remaining under its authorized share repurchase program.

Full Year 2026 Outlook
The company’s outlook includes the impact of increased tariffs on all countries from which it sources products, except Mexico. Based on currently available information, the company’s imports from Mexico to the U.S. remain exempt under USMCA.

The company’s outlook assumes a 15 percent reciprocal tariff rate on applicable inventory receipts effective February 24, 2026. The company’s outlook assumes a reciprocal tariff rate of at least 20 percent on applicable inventory owned prior to February 24, 2026.

The company is evaluating the impact of the recent U.S. Supreme Court ruling on tariffs and trade agreements with Bangladesh. The company uses U.S.-grown cotton in more than 80 percent of the products sourced from Bangladesh, which may qualify for a duty exemption under the trade agreement.

“We are entering 2026 from a position of strength, with sharp strategic clarity and a relentless focus on execution,” said Baxter. “We have the team and platforms in place to drive another year of record revenue and earnings, cash generation, and investment behind our brands. The strength and resiliency of our model provide significant capital allocation optionality to deliver superior returns for our shareholders.”

The company’s full-year 2026 outlook includes the following assumptions:

  • Revenue is expected to be in the range of $3.40 to $3.45 billion, representing growth of approximately 9 percent compared to the prior year, including an approximate 2 percent impact from the 53rd week in the prior year.
  • Adjusted gross margin is expected to be in the range of 47.2 percent to 47.4 percent, representing an increase of 60 to 80 basis points compared to the prior year. The benefits from Project Jeanius, channel and product mix, and the contribution from Helly Hansen are expected to offset the impact from increases in tariffs, net of pricing actions.
  • Adjusted SG&A expenses are expected to increase approximately 12 percent compared to the prior year. Excluding Helly Hansen, SG&A expenses are expected to be consistent with the prior year, including an increase in investment in demand creation and other strategic growth initiatives, offset by disciplined expense management, Project Jeanius and the impact of the 53rd week in the prior year.
  • Adjusted operating income is expected to be in the range of $506 to $512 million, representing an increase of 8 percent to 9 percent compared to the prior year, including the impact of tariff increases.
  • Adjusted EPS is expected to be in the range of $6.40 to $6.50, representing an increase of 15 percent to 16 percent compared to the prior year, including the impact from increases in tariffs.
  • Capital expenditures are expected to be approximately $45 million.
  • The company expects an effective tax rate of approximately 20 percent on adjusted earnings, including the benefit of synergies from Helly Hansen.
  • Interest expense is expected to be approximately $55 million. Other expense is expected to be approximately $15 million. Average shares outstanding are expected to be approximately 56 million. There are no share repurchases contemplated in the company’s outlook.
  • The company expects cash from operations of approximately $425 million.
  • The company expects to make voluntary term loan payments of $225 million and to achieve a net leverage ratio below 1.5 times by year-end.