Helly Hansen’s revenue grew 11% to $193 million in the third quarter as parent company Kontoor Brands, which acquired Helly Hansen earlier this year, raised its full-year guidance.
“What you’re seeing is … a company that’s thriving inside of another apparel company,” said CEO Scott Baxter on Kontoor Brands’ Monday earnings call. “They haven’t had that ecosystem before relative to where they’ve sat the last decade or so and now they’re inside our ecosystem. We’re thriving as far as partners working together.”
Tapping into the U.S. Market
Nowhere is the growth opportunity greater than in the United States. Despite its international recognition, Helly Hansen’s brand awareness in the U.S. is only 29%. However, this figure has grown by six points since 2019, while revenue in the region has more than doubled, Baxter said.
To build on this momentum, the company will increase investments in new distribution, DTC growth, and investments in demand creation to increase brand awareness, Baxter said.
“It’s ski shops, it’s independents, it’s definitely U.S. wholesale,” he said. “It’s across the board, it’s digital, it’s owned and operated retail. We’ve got multiple plans that come into different stages. As you can imagine, we’ve thought (that) out from a capital standpoint and how we’re going to embrace each one.”
Helly Hansen Workwear and International Opportunities
Helly Hansen has grown across both its sport and workwear categories.
Within the workwear segment, Helly Hansen’s connection to technical outdoor products has made it a leader in professional-grade workwear in Europe. In the U.S., the strategy is to lead with footwear in regions where the sport category has high penetration, with plans to expand into apparel.
Beyond the U.S., the company sees significant opportunities in Asia and key European markets like Germany, Austria and Switzerland. The joint venture in China is on track for over 70% growth this year.
The Spring-Summer 2026 order book for the sport category has accelerated, and workwear preorders are up at a double-digit rate.
Synergies
The second strategic pillar is to double the operating margin from high single-digits to the mid-teens. This goal will be achieved through a combination of gross margin expansion and SG&A benefits, leveraging the company’s global operating model, supply chain and technology platforms.
Executive Vice President & CFO Joseph A. Alkire said that the integration has a clear line of sight to more than $25 million in run-rate synergies that will meaningfully impact profitability in 2026.
“These synergies will help fund investments in the business, including geographic and category expansion, demand creation, DTC, supply chain capabilities and our technology platform,” Alkire said.
Financial Highlights and Future Outlook
Kontoor’s total revenue was $853 million in Q3, a 27% increase compared to the prior year, which did not include Helly Hansen at the time.
Wrangler brand global revenue was $471 million, a 2% year-over-year increase.
Lee brand global revenue was $187 million, an 8% year-over-year decrease.
Kontoor Brands’ net income was $37 million compared to $71 million in the same period last year – a drop of 48%.
For the full year, Helly Hansen is now expected to contribute $460 million to revenue, up from the previous outlook of $455 million.
For Kontoor:
- Revenue is now expected to be at the high end of the prior outlook range of $3.09 to $3.12 billion, an increase of approximately 19% to 20% compared to the prior year.
- Excluding the impact of Helly Hansen, Kontoor expects full year 2025 revenue growth of approximately 2%.
- Fourth-quarter revenue will be between $970 million to $980 million, an increase of 39% to 40%, including an approximate four-point benefit from a 53rd week.
- Adjusted gross margin is now expected to be approximately 46.4%, representing an increase of 130 basis points compared to the prior year. This compares to the prior outlook of 100 basis points of gross margin expansion.
Looking ahead, the company is confident in Helly Hansen’s continued success.
“We couldn’t be more pleased with our acquisition and how it’s going,” Baxter said. “It’s been a really thoughtful merger of our two companies and is just going really well.”
Kate Robertson can be reached at kate@shop-eat-surf-outdoor.com.
