Kontoor Brands, the US apparel group behind Wrangler, Lee and Helly Hansen, has initiated a competitive process to divest its Lee business as it pivots toward higher-growth labels and stronger shareholder returns.
The Greensboro-based company said the sale process began in the first quarter of 2026 and has advanced to a stage where multiple parties have shown interest, with a definitive agreement expected within the year. Following the move, Lee has been reclassified under discontinued operations in Kontoor’s financial reporting.
Founded in 1889, Lee is among the world’s oldest denim brands and has long competed in global jeanswear and casual apparel markets alongside Wrangler, Kontoor’s core western and lifestyle label. Helly Hansen, acquired in 2025, has expanded the group’s presence in outdoor and workwear segments.
Kontoor president, chief executive and chairman Scott Baxter said the divestiture is intended to sharpen the company’s portfolio focus on faster-growing opportunities and improve capital allocation efficiency.
Chief financial officer Joe Alkire said the process is in an advanced stage and has attracted strong market interest, adding that the company expects to complete the transaction within 2026, unlocking additional capital allocation flexibility and supporting longer-term shareholder returns.
Kontoor said the planned divestiture is expected to have an immaterial impact on earnings per share over 12 to 18 months, with Lee’s contribution to be offset by stronger deployment of capital, restructuring actions and reduced overhead allocation.
Lee generated $195 million in revenue in the first quarter, with full-year revenue projected at about $750 million ahead of the sale. Total group revenue for the quarter stood at $808 million, including Lee operations, while continuing operations excluding Lee reached $613 million, up 45 per cent year on year, supported by the Helly Hansen acquisition completed in the second quarter of 2025.
Wrangler recorded $436 million in global revenue, rising 4 per cent, with US sales up 1 per cent and international revenue increasing 20 per cent. Helly Hansen generated $176 million in revenue, including $120 million from sport and workwear and $45 million from core segments, while Musto contributed $11 million.
Kontoor raised its full-year 2026 revenue outlook to $3.41 billion–$3.46 billion from $3.40 billion–$3.45 billion, and increased adjusted earnings per share guidance to $6.60–$6.70 from $6.40–$6.50. Excluding Lee, continuing operations revenue is projected at $2.66 billion–$2.71 billion, with adjusted EPS of $5.15–$5.25.
The company also approved a new $750 million share repurchase programme, replacing the December 2023 plan, citing confidence in its reshaped portfolio and growth trajectory. It said buybacks will be funded through operating cash flow and proceeds from the Lee divestiture, alongside potential additional debt reduction beyond planned $225 million term loan repayments scheduled for 2026.
Kontoor ended the quarter with $56 million in cash and cash equivalents and $1.14 billion in long-term debt. The company is listed on the New York Stock Exchange under the ticker KTB.
