Kontoor Brands Inc. (NYSE: KTB) reported Q3 EPS of $0.95, $0.06 better than the analyst estimate of $0.89. Revenue for the quarter came in at $638 million versus the consensus estimate of $646.46 million.

“Third quarter 2019 results were in line with our expectations, as we continued to execute on our strategy of setting the foundation for long-term operational success,” said Scott Baxter, President and Chief Executive Officer, Kontoor Brands. “We’re beginning to realize the benefits of the previously announced restructuring and cost-savings initiatives, while we continue to stabilize and globalize our organization. And, we\'re improving the quality of our sales, including exiting unprofitable points of distribution, changing business models and rationalizing underperforming SKUs. These actions create the building blocks for healthy, sustainable future growth.”

Full-Year 2019 Outlook

“We’ve made great progress and our strategic actions are on track,” Baxter said. “We remain confident that we will continue to drive improved profitability and generate significant cash flow in support of achieving our long-term annualized total shareholder return goal of 8 to 10 percent.”

In the back half of the year, actions in India are expected to drive an adverse adjusted EBITDA impact of approximately $16 million, which includes $8 million in the fourth quarter. Despite the magnitude of actions in India, the Company anticipates delivering on the lower half of the previously announced adjusted EBITDA outlook for fiscal 2019 of $340 million to $360 million. While favorable mix from restructuring and strategic quality-of-sales actions will benefit gross margin in the fourth quarter, unfavorable mix in India will temper the underlying strength.

Kontoor Brands’ outlook for the fiscal year ended December 28, 2019, is as follows:

• Adjusted EBITDA is now expected to be in the lower half of our previously announced range of $340 million to $360 million, reflecting a high-single digit to low-double digit decline compared with full-year 2018 adjusted EBITDA.
• Revenue is still expected to exceed $2.5 billion, reflecting a mid-single digit decline compared with full-year 2018 adjusted revenue. Excluding the negative impact of foreign currency exchange rates, impacts of a prior year U.S. retailer bankruptcy and strategic business exits, full-year 2019 revenue is expected to be relatively consistent with full-year 2018 adjusted revenue. The Company continues to expect second half revenue to improve relative to the first half of 2019, with the fourth quarter benefiting the most from strategic actions and the fourth quarter 2018 customer bankruptcy comparison.
• Capital Expenditures are still expected to range between $55 million and $65 million, including approximately $30 million to $40 million to support the design and implementation of a global enterprise resource planning (ERP) system. As previously announced, the global ERP system implementation is expected to require approximately $80 million to $90 million of capital investment during a two-to-three-year period and is expected to result in significant efficiencies and cost savings, once fully implemented.
• Other full-year assumptions include an effective tax rate of approximately 24 percent. Interest expense should be approximately $40 million in 2019, or $60 million on an annualized basis.
• We anticipate the total reduction in long-term debt for fiscal 2019 will be approximately $100 million.

Reaffirmed 2020 to 2021 Financial Roadmap

• Revenue is expected to increase at a low-single digit compound annual growth rate (CAGR) over the period.
• Adjusted EBITDA is expected to increase at a mid-single digit CAGR over the period.
• Capital Expenditures are expected to range between $105 million and $110 million in aggregate over the two-year period.

For earnings history and earnings-related data on Kontoor Brands Inc. (KTB) click here.