Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 27, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Entity Transition Report | false | |
Entity File Number | 001-38854 | |
Entity Registrant Name | KONTOOR BRANDS, INC. | |
Entity Incorporation, State or Country Code | NC | |
Entity Tax Identification Number | 83-2680248 | |
Entity Address, Address Line One | 400 N. Elm Street | |
Entity Address, City or Town | Greensboro | |
Entity Address, State or Province | NC | |
Entity Address, Postal Zip Code | 27401 | |
City Area Code | 336 | |
Local Phone Number | 332-3400 | |
Title of 12(b) Security | Common Stock, no par value | |
Trading Symbol | KTB | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 56,180,152 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001760965 | |
Current Fiscal Year End Date | --12-31 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Oct. 01, 2022 |
Current assets | |||
Cash and cash equivalents | $ 77,828 | $ 59,179 | $ 58,053 |
Accounts receivable, net | 236,816 | 225,858 | 234,569 |
Inventories | 605,234 | 596,836 | 678,207 |
Prepaid expenses and other current assets | 113,186 | 100,396 | 102,425 |
Total current assets | 1,033,064 | 982,269 | 1,073,254 |
Property, plant and equipment, net | 110,399 | 104,465 | 101,407 |
Operating lease assets | 63,114 | 51,029 | 47,831 |
Intangible assets, net | 12,553 | 13,361 | 13,242 |
Goodwill | 209,413 | 209,627 | 209,012 |
Other assets | 197,387 | 221,510 | 208,264 |
TOTAL ASSETS | 1,625,930 | 1,582,261 | 1,653,010 |
Current liabilities | |||
Short-term borrowings | 0 | 7,280 | 7,093 |
Current portion of long-term debt | 17,500 | 10,000 | 7,500 |
Accounts payable | 182,448 | 206,262 | 306,278 |
Accrued liabilities | 168,356 | 196,989 | 167,690 |
Operating lease liabilities, current | 20,975 | 19,898 | 18,885 |
Total current liabilities | 389,279 | 440,429 | 507,446 |
Operating lease liabilities, noncurrent | 41,348 | 31,506 | 30,255 |
Other liabilities | 79,084 | 76,950 | 82,417 |
Long-term debt | 768,595 | 782,619 | 824,793 |
Commitments and contingencies | |||
Total liabilities | 1,278,306 | 1,331,504 | 1,444,911 |
Equity | |||
Preferred Stock, no par value; shares authorized, 90,000,000; no shares outstanding at September 2023, December 2022 and September 2022 | 0 | 0 | 0 |
Common Stock, no par value; shares authorized, 600,000,000; shares outstanding of 56,173,518 at September 2023; 55,516,872 at December 2022 and 55,464,569 at September 2022 | 0 | 0 | 0 |
Additional paid-in capital | 261,966 | 243,696 | 237,934 |
Retained earnings | 156,491 | 86,726 | 62,448 |
Accumulated other comprehensive loss | (70,833) | (79,665) | (92,283) |
Total equity | 347,624 | 250,757 | 208,099 |
TOTAL LIABILITIES AND EQUITY | $ 1,625,930 | $ 1,582,261 | $ 1,653,010 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 | Oct. 01, 2022 |
Statement of Financial Position [Abstract] | |||
Preferred stock, no par value (in USD per share) | $ 0 | $ 0 | $ 0 |
Preferred stock, shares authorized (in shares) | 90,000,000 | 90,000,000 | 90,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 | 0 |
Common stock, no par value (in USD per share) | $ 0 | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 600,000,000 | 600,000,000 | 600,000,000 |
Common stock, shares outstanding (in shares) | 56,173,518 | 55,516,872 | 55,464,569 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | |
Income Statement [Abstract] | ||||
Net revenues | $ 654,540 | $ 606,521 | $ 1,937,672 | $ 1,899,836 |
Costs and operating expenses | ||||
Cost of goods sold | 383,075 | 342,460 | 1,129,245 | 1,064,190 |
Selling, general and administrative expenses | 185,983 | 188,995 | 564,599 | 563,614 |
Total costs and operating expenses | 569,058 | 531,455 | 1,693,844 | 1,627,804 |
Operating income | 85,482 | 75,066 | 243,828 | 272,032 |
Interest expense | (10,454) | (8,858) | (30,390) | (25,115) |
Interest income | 964 | 263 | 2,074 | 1,028 |
Other expense, net | (3,764) | (2,219) | (9,142) | (5,187) |
Income before income taxes | 72,228 | 64,252 | 206,370 | 242,758 |
Income taxes | 12,697 | 13,169 | 44,147 | 48,870 |
Net income | $ 59,531 | $ 51,083 | $ 162,223 | $ 193,888 |
Earnings per common share | ||||
Basic (in USD per share) | $ 1.06 | $ 0.92 | $ 2.90 | $ 3.47 |
Diluted (in USD per share) | $ 1.05 | $ 0.90 | $ 2.85 | $ 3.40 |
Weighted average shares outstanding | ||||
Basic (in shares) | 56,151 | 55,428 | 55,962 | 55,830 |
Diluted (in shares) | 56,956 | 56,550 | 56,914 | 57,060 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 59,531 | $ 51,083 | $ 162,223 | $ 193,888 |
Other comprehensive (loss) income | ||||
Net change in foreign currency translation | (6,916) | (11,568) | 5,936 | (28,457) |
Net change in defined benefit pension plans | (37) | 6 | (107) | 17 |
Net change in derivative financial instruments | (3,787) | 11,236 | 3,003 | 28,913 |
Total other comprehensive (loss) income, net of related taxes | (10,740) | (326) | 8,832 | 473 |
Comprehensive income | $ 48,791 | $ 50,757 | $ 171,055 | $ 194,361 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
OPERATING ACTIVITIES | ||
Net income | $ 162,223 | $ 193,888 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization | 27,405 | 27,827 |
Stock-based compensation | 9,017 | 17,758 |
Provision for doubtful accounts | 87 | 2,202 |
Other | 10,331 | 8,536 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (10,660) | 37,673 |
Inventories | (6,354) | (323,449) |
Accounts payable | (23,145) | 98,556 |
Income taxes | (24,064) | (11,682) |
Accrued liabilities | (10,170) | (33,473) |
Other assets and liabilities | 12,856 | (5,107) |
Cash provided by operating activities | 147,526 | 12,729 |
INVESTING ACTIVITIES | ||
Property, plant and equipment expenditures | (21,553) | (13,091) |
Capitalized computer software | (8,940) | (7,633) |
Other | (837) | (990) |
Cash used by investing activities | (31,330) | (21,714) |
FINANCING ACTIVITIES | ||
Borrowings under revolving credit facility | 288,000 | 76,000 |
Repayments under revolving credit facility | (288,000) | (36,000) |
Repayments of term loan | (7,500) | 0 |
Repurchases of Common Stock | 0 | (62,494) |
Dividends paid | (80,719) | (77,021) |
Shares withheld for taxes, net of proceeds from issuance of Common Stock | (2,506) | (12,643) |
Other | (7,297) | 7,002 |
Cash used by financing activities | (98,022) | (105,156) |
Effect of foreign currency rate changes on cash and cash equivalents | 475 | (13,128) |
Net change in cash and cash equivalents | 18,649 | (127,269) |
Cash and cash equivalents – beginning of period | 59,179 | 185,322 |
Cash and cash equivalents – end of period | $ 77,828 | $ 58,053 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss |
Balance, beginning (in shares) at Jan. 01, 2022 | 56,381,000 | ||||
Balance, beginning at Jan. 01, 2022 | $ 148,138 | $ 0 | $ 218,259 | $ 22,635 | $ (92,756) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 80,810 | 80,810 | |||
Stock-based compensation, net (in shares) | 387,000 | ||||
Stock-based compensation, net | (5,371) | 6,462 | (11,833) | ||
Other comprehensive income (loss) | 9,059 | 9,059 | |||
Dividends on Common Stock | (26,033) | (26,033) | |||
Repurchase of common stock (in shares) | (492,000) | ||||
Repurchases of Common Stock | (22,513) | (22,513) | |||
Balance, ending (in shares) at Apr. 02, 2022 | 56,276,000 | ||||
Balance, ending at Apr. 02, 2022 | 184,090 | $ 0 | 224,721 | 43,066 | (83,697) |
Balance, beginning (in shares) at Jan. 01, 2022 | 56,381,000 | ||||
Balance, beginning at Jan. 01, 2022 | 148,138 | $ 0 | 218,259 | 22,635 | (92,756) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 193,888 | ||||
Other comprehensive income (loss) | $ 473 | ||||
Balance, ending (in shares) at Oct. 01, 2022 | 55,464,569 | 55,465,000 | |||
Balance, ending at Oct. 01, 2022 | $ 208,099 | $ 0 | 237,934 | 62,448 | (92,283) |
Balance, beginning (in shares) at Apr. 02, 2022 | 56,276,000 | ||||
Balance, beginning at Apr. 02, 2022 | 184,090 | $ 0 | 224,721 | 43,066 | (83,697) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 61,995 | 61,995 | |||
Stock-based compensation, net (in shares) | 109,000 | ||||
Stock-based compensation, net | 6,820 | 7,320 | (500) | ||
Other comprehensive income (loss) | (8,260) | (8,260) | |||
Dividends on Common Stock | (25,475) | (25,475) | |||
Repurchase of common stock (in shares) | (1,003,000) | ||||
Repurchases of Common Stock | (39,981) | (39,981) | |||
Balance, ending (in shares) at Jul. 02, 2022 | 55,382,000 | ||||
Balance, ending at Jul. 02, 2022 | 179,189 | $ 0 | 232,041 | 39,105 | (91,957) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 51,083 | 51,083 | |||
Stock-based compensation, net (in shares) | 83,000 | ||||
Stock-based compensation, net | 3,666 | 5,893 | (2,227) | ||
Other comprehensive income (loss) | (326) | (326) | |||
Dividends on Common Stock | $ (25,513) | (25,513) | |||
Balance, ending (in shares) at Oct. 01, 2022 | 55,464,569 | 55,465,000 | |||
Balance, ending at Oct. 01, 2022 | $ 208,099 | $ 0 | 237,934 | 62,448 | (92,283) |
Balance, beginning (in shares) at Dec. 31, 2022 | 55,516,872 | 55,517,000 | |||
Balance, beginning at Dec. 31, 2022 | $ 250,757 | $ 0 | 243,696 | 86,726 | (79,665) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 66,296 | 66,296 | |||
Stock-based compensation, net (in shares) | 417,000 | ||||
Stock-based compensation, net | (2,617) | 7,412 | (10,029) | ||
Other comprehensive income (loss) | 11,660 | 11,660 | |||
Dividends on Common Stock | (26,808) | (26,808) | |||
Balance, ending (in shares) at Apr. 01, 2023 | 55,934,000 | ||||
Balance, ending at Apr. 01, 2023 | $ 299,288 | $ 0 | 251,108 | 116,185 | (68,005) |
Balance, beginning (in shares) at Dec. 31, 2022 | 55,516,872 | 55,517,000 | |||
Balance, beginning at Dec. 31, 2022 | $ 250,757 | $ 0 | 243,696 | 86,726 | (79,665) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 162,223 | ||||
Other comprehensive income (loss) | $ 8,832 | ||||
Balance, ending (in shares) at Sep. 30, 2023 | 56,173,518 | 56,174,000 | |||
Balance, ending at Sep. 30, 2023 | $ 347,624 | $ 0 | 261,966 | 156,491 | (70,833) |
Balance, beginning (in shares) at Apr. 01, 2023 | 55,934,000 | ||||
Balance, beginning at Apr. 01, 2023 | 299,288 | $ 0 | 251,108 | 116,185 | (68,005) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 36,396 | 36,396 | |||
Stock-based compensation, net (in shares) | 176,000 | ||||
Stock-based compensation, net | 6,603 | 7,241 | (638) | ||
Other comprehensive income (loss) | 7,912 | 7,912 | |||
Dividends on Common Stock | (26,948) | (26,948) | |||
Balance, ending (in shares) at Jul. 01, 2023 | 56,110,000 | ||||
Balance, ending at Jul. 01, 2023 | 323,251 | $ 0 | 258,349 | 124,995 | (60,093) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 59,531 | 59,531 | |||
Stock-based compensation, net (in shares) | 64,000 | ||||
Stock-based compensation, net | 2,545 | 3,617 | (1,072) | ||
Other comprehensive income (loss) | (10,740) | (10,740) | |||
Dividends on Common Stock | $ (26,963) | (26,963) | |||
Balance, ending (in shares) at Sep. 30, 2023 | 56,173,518 | 56,174,000 | |||
Balance, ending at Sep. 30, 2023 | $ 347,624 | $ 0 | $ 261,966 | $ 156,491 | $ (70,833) |
Consolidated Statements of Eq_2
Consolidated Statements of Equity (Parenthetical) - $ / shares | 3 Months Ended | |||||
Sep. 30, 2023 | Jul. 01, 2023 | Apr. 01, 2023 | Oct. 01, 2022 | Jul. 02, 2022 | Apr. 02, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||||||
Dividends on Common Stock (in USD per share) | $ 0.48 | $ 0.48 | $ 0.48 | $ 0.46 | $ 0.46 | $ 0.46 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Description of Business Kontoor Brands, Inc. ("Kontoor," the "Company," "we," "us" or "our") is a global lifestyle apparel company headquartered in the United States ("U.S."). The Company designs, produces, procures, markets, distributes and licenses apparel, footwear and accessories, primarily under the brand names Wrangler ® and Lee ® . The Company's products are sold in the U.S. through mass merchants, specialty stores, mid-tier and traditional department stores, company-operated stores and online. The Company's products are also sold internationally, primarily in the Europe and Asia-Pacific regions, through department, specialty, company-operated, concession retail and independently-operated partnership stores and online. Fiscal Year The Company operates and reports using a 52/53-week fiscal year ending on the Saturday closest to December 31 of each year. Accordingly, this Form 10-Q presents the third quarter of the Company's fiscal year ending December 30, 2023 ("fiscal 2023"), which is a 52-week fiscal year. For presentation purposes herein, all references to periods ended September 2023, December 2022 and September 2022 correspond to the fiscal periods ended September 30, 2023, December 31, 2022 and October 1, 2022, respectively. Macroeconomic Environment and Other Recent Developments Macroeconomic conditions, including inflation, rising interest rates, recessionary concerns, fluctuating foreign currency exchange rates and uncertainty in global credit and banking markets, as well as global supply chain issues, labor challenges and uneven economic recovery following the COVID-19 pandemic, especially in China, continue to adversely impact global economic conditions, as well as the Company's operations. Additionally, the conflict between Russia and Ukraine, as well as the conflict in Israel, are causing disruption in the surrounding areas and greater uncertainty in the global economy. The Company considered the impact of these developments on the assumptions and estimates used when preparing these quarterly financial statements including, but not limited to, our allowance for doubtful accounts, inventory valuations, liabilities for variable consideration, deferred tax valuation allowances, fair value measurements including asset impairment evaluations, the effectiveness of the Company’s hedging instruments and expected compliance with all applicable financial covenants in our Credit Agreement (as defined in Note 7 Basis of Presentation - Interim Financial Statements The accompanying unaudited interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X and do not include all of the information and notes required by generally accepted accounting principles in the U.S. ("GAAP") for complete financial statements. In the opinion of management, the accompanying financial statements contain all normal and recurring adjustments necessary to fairly state the financial position, results of operations and cash flows of the Company for the interim periods presented. Operating results for the three and nine months ended September 2023 are not necessarily indicative of results that may be expected for any other interim period or for fiscal 2023. The unaudited financial statements should be read in conjunction with the audited consolidated financial statements included in the Company's 2022 Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as filed with the Securities and Exchange Commission on March 1, 2023 ("2022 Annual Report on Form 10-K"). Out-of-Period Adjustment During the three months ended September 2023, management identified inaccuracies in processing certain transactions with U.S. Customs and Border Protection ("U.S. Customs") arising from the implementation of the Company's enterprise resource planning system, which resulted in underpayment of duties owed to U.S. Customs for the 2021 to 2023 periods. Accordingly, the Company recorded a $13.1 million adjustment in the current period within "cost of goods sold" for additional duty expense related to prior periods. The Company concluded that the out-of-period adjustment was not material to the consolidated financial statements for the current interim period or to any previously reported annual or interim periods. Recently Adopted Accounting Standards In September 2022, the Financial Accounting Standards Board issued Accounting Standards Update 2022-04, "Disclosure of Supplier Finance Program Obligations," which requires entities that use supplier finance programs in connection with the purchase of goods and services to disclose key terms of the programs, outstanding confirmed amounts as of period end, a description of where those obligations are presented in the balance sheet and an annual rollforward of obligations. This guidance was adopted by the Company during the first quarter of 2023, except for the requirement to include a rollforward of obligations which is effective beginning in 2024 with early adoption permitted. Refer to Note 6 |
REVENUES
REVENUES | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | REVENUES Disaggregation of Revenue The following tables present revenues disaggregated by channel and geography. Revenues from licensing arrangements are included within the U.S. or Non-U.S. Wholesale channels, based on the respective region where the licensee sells the product. Direct-to-Consumer revenues include sales from company-operated Wrangler ® and Lee ® branded full-price and outlet stores, online and international concession arrangements. Other includes sales and licensing of Rock & Republic ® , other company-owned brands and private label apparel. Three Months Ended September 2023 (In thousands) Wrangler Lee Other Total Channel revenues U.S. Wholesale $ 355,608 $ 103,564 $ 1,799 $ 460,971 Non-U.S. Wholesale 53,644 71,433 — 125,077 Direct-to-Consumer 35,287 33,030 175 68,492 Total $ 444,539 $ 208,027 $ 1,974 $ 654,540 Geographic revenues U.S. $ 385,501 $ 118,352 $ 1,974 $ 505,827 International 59,038 89,675 — 148,713 Total $ 444,539 $ 208,027 $ 1,974 $ 654,540 Three Months Ended September 2022 (In thousands) Wrangler Lee Other Total Channel revenues U.S. Wholesale $ 324,564 $ 84,122 $ 1,771 $ 410,457 Non-U.S. Wholesale 50,448 81,682 28 132,158 Direct-to-Consumer 31,149 32,661 96 63,906 Total $ 406,161 $ 198,465 $ 1,895 $ 606,521 Geographic revenues U.S. $ 351,624 $ 98,862 $ 1,867 $ 452,353 International 54,537 99,603 28 154,168 Total $ 406,161 $ 198,465 $ 1,895 $ 606,521 Nine Months Ended September 2023 (In thousands) Wrangler Lee Other Total Channel revenues U.S. Wholesale $ 1,048,491 $ 337,081 $ 7,393 $ 1,392,965 Non-U.S. Wholesale 143,667 188,670 10 332,347 Direct-to-Consumer 101,013 110,933 414 212,360 Total $ 1,293,171 $ 636,684 $ 7,817 $ 1,937,672 Geographic revenues U.S. $ 1,132,741 $ 382,290 $ 7,807 $ 1,522,838 International 160,430 254,394 10 414,834 Total $ 1,293,171 $ 636,684 $ 7,817 $ 1,937,672 Nine Months Ended September 2022 (In thousands) Wrangler Lee Other Total Channel revenues U.S. Wholesale $ 1,003,753 $ 341,125 $ 6,425 $ 1,351,303 Non-U.S. Wholesale 143,724 212,591 903 357,218 Direct-to-Consumer 89,051 102,022 242 191,315 Total $ 1,236,528 $ 655,738 $ 7,570 $ 1,899,836 Geographic revenues U.S. $ 1,078,998 $ 384,035 $ 6,667 $ 1,469,700 International 157,530 271,703 903 430,136 Total $ 1,236,528 $ 655,738 $ 7,570 $ 1,899,836 Contract Balances and Performance Obligations The following table presents information about contract balances recorded in the Company's balance sheets: (In thousands) September 2023 December 2022 September 2022 Accounts receivable, net $ 236,816 $ 225,858 $ 234,569 Contract assets (a) 8,704 5,050 6,599 Contract liabilities (b) 1,348 1,057 919 (a) Included within "prepaid expenses and other current assets" in the Company's balance sheets. (b) Included within "accrued liabilities" in the Company's balance sheets. For the three and nine months ended September 2023 and September 2022, no significant revenue was recognized that was included in contract liabilities as of December 2022 and December 2021, respectively. For the three and nine months ended September 2023, no significant revenue was recognized from performance obligations satisfied, or partially satisfied, in prior periods. As of September 2023, the Company has contractual rights under its licensing agreements to receive $62.1 million of fixed consideration related to the future minimum guarantees through December 2028. |
BUSINESS SEGMENT INFORMATION
BUSINESS SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENT INFORMATION | BUSINESS SEGMENT INFORMATION The Company has two reportable segments: • Wrangler — Wrangler ® branded denim, apparel, footwear and accessories. • Lee — Lee ® branded denim, apparel, footwear and accessories. The Company considers its chief executive officer to be its chief operating decision maker. The chief operating decision maker allocates resources and assesses performance based on the global brand operating results of Wrangler ® and Lee ® , which are the Company's operating and reportable segments. In addition, we report an "Other" category to reconcile segment revenues and segment profit to the Company's operating results, but the Other category does not meet the criteria to be considered a reportable segment. Other includes sales and licensing of Rock & Republic ® , other company-owned brands and private label apparel. Accounting policies utilized for internal management reporting at the individual segments are consistent with those disclosed in the Company's 2022 Annual Report on Form 10-K. Corporate and other expenses and interest income and expense are not controlled by segment management and therefore are excluded from the measurement of segment profit. The following table presents financial information for the Company's reportable segments and income before income taxes: Three Months Ended September Nine Months Ended September (In thousands) 2023 2022 2023 2022 Segment revenues: Wrangler $ 444,539 $ 406,161 $ 1,293,171 $ 1,236,528 Lee 208,027 198,465 636,684 655,738 Total reportable segment revenues 652,566 604,626 1,929,855 1,892,266 Other revenues 1,974 1,895 7,817 7,570 Total net revenues $ 654,540 $ 606,521 $ 1,937,672 $ 1,899,836 Segment profit: Wrangler $ 81,556 $ 75,597 $ 223,639 $ 226,049 Lee 20,735 26,703 77,473 101,837 Total reportable segment profit $ 102,291 $ 102,300 $ 301,112 $ 327,886 Corporate and other expenses (20,091) (28,775) (65,815) (60,774) Interest expense (10,454) (8,858) (30,390) (25,115) Interest income 964 263 2,074 1,028 Loss related to other revenues (482) (678) (611) (267) Income before income taxes $ 72,228 $ 64,252 $ 206,370 $ 242,758 |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 9 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE Allowance for Doubtful Accounts The following table presents a rollforward of the allowance for doubtful accounts: Nine Months Ended September (In thousands) 2023 2022 Balance, December $ 9,918 $ 11,705 Increase in provision for expected credit losses 87 2,116 Accounts receivable balances written off (1,247) (1,069) Other (1) (105) (1,197) Balance, September $ 8,653 $ 11,555 (1) Other primarily includes the impact of foreign currency translation and recoveries of amounts previously written off, none of which were individually significant. Sale of Trade Accounts Receivable The Company is party to an agreement with a financial institution to sell selected trade accounts receivable on a nonrecourse basis. Under this agreement, up to $377.5 million of the Company’s trade accounts receivable may be sold to the financial institution and remain outstanding at any point in time. The Company removes the sold balances from "accounts receivable, net" in its balance sheet at the time of sale. The Company does not retain any interests in the sold trade accounts receivable but continues to service and collect outstanding trade accounts receivable on behalf of the financial institution. During the nine months ended September 2023 and September 2022, the Company sold total trade accounts receivable of $1,023.5 million and $1,016.0 million, respectively. As of September 2023, December 2022 and September 2022, $216.2 million, $246.0 million and $197.8 million, respectively, of the sold trade accounts receivable had been removed from the Company's balance sheets but remained outstanding with the financial institution. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES The following table presents components of "inventories" recorded in the Company's balance sheets: (In thousands) September 2023 December 2022 September 2022 Finished products $ 526,633 $ 509,554 $ 584,480 Work-in-process 34,325 34,316 37,823 Raw materials 44,276 52,966 55,904 Total inventories $ 605,234 $ 596,836 $ 678,207 |
Supply Chain Financing
Supply Chain Financing | 9 Months Ended |
Sep. 30, 2023 | |
Supply Chain Financing [Abstract] | |
Supply Chain Financing | SUPPLY CHAIN FINANCINGThe Company facilitates voluntary Supply Chain Finance ("SCF") programs with its financial institutions that allow certain suppliers the option to sell or assign their rights to receivables due from the Company, enabling the suppliers to receive payment from the financial institutions sooner than our negotiated payment terms. Participation in an SCF program is based on terms and conditions negotiated directly between the suppliers and the financial institutions. The Company agrees to commercial terms with suppliers independent of their participation in an SCF program, and thus their participation has no impact on our payment terms. The Company is not a party to the agreements between our suppliers and the financial institutions, and has no economic interest in our suppliers' decision to participate in an SCF program. Suppliers who participate in an SCF program have sole discretion to determine which invoices, if any, are to be sold to the financial institutions. All amounts payable to suppliers who participate in SCF programs are included within "accounts payable" in the Company's balance sheets, and the Company's associated payments are included in operating activities in the Company's statements of cash flows. At September 2023, December 2022 and September 2022, accounts payable included total outstanding balances of $21.9 million, $24.7 million and $21.0 million, respectively, due to suppliers that participate in the SCF programs. |
SHORT-TERM BORROWINGS AND LONG-
SHORT-TERM BORROWINGS AND LONG-TERM DEBT | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
SHORT-TERM BORROWINGS AND LONG-TERM DEBT | SHORT-TERM BORROWINGS AND LONG-TERM DEBT Short-term Borrowings At September 2023, December 2022 and September 2022, the Company had $23.7 million, $24.8 million and $24.3 million, respectively, of international lines of credit with various banks, which are uncommitted and may be terminated at any time by either the Company or the banks. There was no outstanding balance under these arrangements at September 2023, and $7.1 million and $6.9 million of outstanding balances at December 2022 and September 2022, respectively. In addition, short-term borrowings included other debt of $0.2 million at both December 2022 and September 2022, with no balance remaining at September 2023. Long-term Debt The following table presents the components of "long-term debt" as recorded in the Company's balance sheets: (In thousands) September 2023 December 2022 September 2022 Revolving Credit Facility $ — $ — $ 40,000 Term Loan A 390,849 397,954 397,822 4.125% Notes, due 2029 395,246 394,665 394,471 Total long-term debt 786,095 792,619 832,293 Less: current portion (17,500) (10,000) (7,500) Long-term debt, due beyond one year $ 768,595 $ 782,619 $ 824,793 Credit Facilities On November 18, 2021, the Company completed a refinancing pursuant to which it issued $400.0 million of unsecured Notes (as defined below) and amended and restated its senior secured Credit Agreement (the “Credit Agreement”). The Credit Agreement provides for (i) a five-year $400.0 million term loan A facility (“Term Loan A”), with quarterly mandatory repayments which commenced in March 2023 and (ii) a five-year $500.0 million revolving credit facility (the “Revolving Credit Facility”) (collectively, the “Credit Facilities”) with the lenders and agents party thereto. Term Loan A had an outstanding principal amount of $392.5 million at September 2023, and $400.0 million at both December 2022 and September 2022, which is reported net of unamortized deferred financing costs. As of September 2023, interest expense on Term Loan A was being recorded at an effective annual interest rate of 4.4%, including the amortization of deferred financing costs and the impact of the Company’s interest rate swap. The Revolving Credit Facility may be used to borrow funds in both U.S. dollar and certain non-U.S. dollar currencies, and has a $75.0 million letter of credit sublimit. As of September 2023, the Company had no outstanding borrowings under the Revolving Credit Facility and $11.7 million of outstanding standby letters of credit issued on behalf of the Company, leaving $488.3 million available for borrowing against this facility. The interest rate per annum applicable to the Credit Agreement is an interest rate benchmark elected by the Company based on the currency and term of the borrowing plus an applicable margin, as defined therein. The Credit Agreement contains certain affirmative and negative covenants customary for financings of this type as well as customary events of default. In addition, the Credit Agreement contains financial covenants which require compliance with (i) a total leverage ratio not to exceed 4.50 to 1.00 as of the last day of any test period, with an allowance for up to two elections to increase the limit to 5.00 to 1.00 in connection with certain material acquisitions, and (ii) a consolidated interest coverage ratio as of the last day of any test period to be no less than 3.00 to 1.00. As of September 2023, the Company was in compliance with all covenants and expects to maintain compliance with the applicable covenants for at least one year from the issuance of these financial statements. Senior Notes On November 18, 2021, the Company entered into an indenture (the “Indenture”) by and among the Company and certain subsidiaries of the Company named as guarantors therein (the “Guarantors”), pursuant to which it issued $400.0 million of unsecured senior notes due November 2029 (the “Notes”) through a private placement pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended. The Notes bear interest at a fixed rate of 4.125% per annum, payable in cash in arrears on May 15 and November 15 of each year. The Notes had an outstanding principal amount of $400.0 million at September 2023, December 2022 and September 2022, which is reported net of unamortized deferred financing costs. As of September 2023, interest expense on the Notes was being recorded at an effective annual interest rate of 4.3%, including the amortization of deferred financing costs. The Notes are guaranteed on a senior unsecured basis by the Company’s existing and future domestic subsidiaries (other than certain excluded subsidiaries) that are borrowers under or guarantors of the Credit Facilities or certain other indebtedness. The Indenture governing the Notes contains customary negative covenants for financings of this type. The Indenture does not contain any financial covenants. As of September 2023, the Company was in compliance with the Indenture and expects to maintain compliance with the applicable covenants for at least one year from the issuance of these financial statements. Refer to Note 10 in the Company's 2022 Annual Report on Form 10-K for additional information regarding the Company’s debt obligations. Total cash paid for interest was $23.5 million and $18.7 million during the nine months ended September 2023 and September 2022, respectively. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Certain assets and liabilities measured and reported at fair value are classified in a three-level hierarchy that prioritizes the inputs used in the valuation process. Categorization within the valuation hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The hierarchy is based on the observability and objectivity of the pricing inputs, as follows: • Level 1 — Quoted prices in active markets for identical assets or liabilities. • Level 2 — Significant directly observable data (other than Level 1 quoted prices) or significant indirectly observable data through corroboration with observable market data. Inputs would normally be (i) quoted prices in active markets for similar assets or liabilities, (ii) quoted prices in inactive markets for identical or similar assets or liabilities or (iii) information derived from or corroborated by observable market data. • Level 3 — Prices or valuation techniques that require significant unobservable data inputs. These inputs would normally be the Company's own data and judgments about assumptions that market participants would use in pricing the asset or liability. Recurring Fair Value Measurements The following tables present financial assets and financial liabilities that are measured and recorded in the Company's financial statements at fair value on a recurring basis: Fair Value Measurement Using (In thousands) Total Fair Value Level 1 Level 2 Level 3 September 2023 Financial assets: Cash equivalents: Money market funds $ 53,655 $ 53,655 $ — $ — Time deposits 2,286 2,286 — — Foreign currency exchange contracts 19,731 — 19,731 — Interest rate swap agreements 6,067 — 6,067 — Investment securities 44,841 44,841 — — Financial liabilities: Foreign currency exchange contracts 1,774 — 1,774 — Deferred compensation 46,799 — 46,799 — Fair Value Measurement Using (In thousands) Total Fair Value Level 1 Level 2 Level 3 December 2022 Financial assets: Cash equivalents: Money market funds $ 20,097 $ 20,097 $ — $ — Time deposits 2,194 2,194 — — Foreign currency exchange contracts 15,565 — 15,565 — Interest rate swap agreements 11,357 — 11,357 — Investment securities 43,131 43,131 — — Financial liabilities: Foreign currency exchange contracts 2,307 — 2,307 — Deferred compensation 44,589 — 44,589 — The Company's cash equivalents include money market funds and short-term time deposits that approximate fair value based on Level 1 measurements. The fair value of derivative financial instruments, which consist of foreign currency exchange contracts and interest rate swap agreements, is determined based on observable market inputs (Level 2), including spot and forward exchange rates for foreign currencies and observable interest rate yield curves for interest rate swap agreements. Investment securities are held in the Company's deferred compensation plans as an economic hedge of the related deferred compensation liabilities and are comprised of mutual funds that are valued based on quoted prices in active markets (Level 1). Liabilities related to the Company's deferred compensation plans are recorded at amounts due to participants, based on the fair value of the participants’ selection of hypothetical investments (Level 2). Additionally, at September 2023, the carrying value of the Company's long-term debt was $786.1 million compared to a fair value of $720.5 million. At December 2022, the carrying value of the Company's long-term debt was $792.6 million compared to a fair value of $718.0 million. The fair value of long-term debt is a Level 2 estimate based on quoted market prices or values of comparable borrowings. All other financial assets and financial liabilities are recorded in the Company's financial statements at cost. These other financial assets and financial liabilities include cash held as demand deposits, accounts receivable, short-term borrowings, accounts payable, and accrued liabilities. At September 2023 and December 2022, their carrying values approximated fair value due to the short-term nature of these instruments. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES Summary of Derivative Financial Instruments The Company enters into derivative contracts with external counterparties to hedge certain foreign currency transactions. The notional amount of all outstanding foreign currency exchange contracts was $339.9 million at September 2023, $322.3 million at December 2022 and $292.8 million at September 2022, consisting primarily of contracts hedging exposures to the euro, Mexican peso, Canadian dollar, British pound, Polish zloty and Swedish krona. Foreign currency exchange contracts have maturities up to 20 months. During 2019, the Company entered into "floating to fixed" interest rate swap agreements to mitigate exposure to volatility in reference rates on the Company's future interest payments. The notional amount of the interest rate swap agreements was $300.0 million at September 2023, December 2022 and September 2022. Because these interest rate swap agreements meet the criteria for hedge accounting, all related gains and losses are deferred within accumulated other comprehensive loss ("AOCL") and are being amortized through April 18, 2024. The Company's outstanding derivative financial instruments met the criteria for hedge accounting at the inception of the hedging relationships. At each reporting period, the Company assesses whether the hedging relationships continue to be highly effective in offsetting changes in cash flows of hedged items. If the Company determines that a specific hedging relationship has ceased to be highly effective, it would discontinue hedge accounting for the hedging relationship. All designated hedging relationships were determined to be highly effective as of September 2023. The following table presents the fair value of outstanding derivatives on an individual contract basis: Fair Value of Derivatives Fair Value of Derivatives September December September September December September (In thousands) 2023 2022 2022 2023 2022 2022 Derivatives designated as hedging instruments: Foreign currency exchange contracts $ 19,717 $ 15,565 $ 21,329 $ (1,737) $ (2,307) $ (186) Interest rate swap agreements 6,067 11,357 11,494 — — — Derivatives not designated as hedging instruments: Foreign currency exchange contracts 14 — 30 (37) — — Total derivatives $ 25,798 $ 26,922 $ 32,853 $ (1,774) $ (2,307) $ (186) The Company records and presents the fair value of all derivative assets and liabilities in the Company's balance sheets on a gross basis, even though certain derivative contracts are subject to master netting agreements. If the Company were to offset and record the asset and liability balances of its derivative contracts on a net basis in accordance with the terms of its master netting agreements, the amounts presented in the Company's balance sheets would be adjusted from the current gross presentation to the net amounts. The following table presents a reconciliation of gross to net amounts for derivative asset and liability balances: September 2023 December 2022 September 2022 (In thousands) Derivative Asset Derivative Liability Derivative Asset Derivative Liability Derivative Asset Derivative Liability Gross amounts presented in the balance sheet $ 25,798 $ (1,774) $ 26,922 $ (2,307) $ 32,853 $ (186) Gross amounts not offset in the balance sheet (1,774) 1,774 (1,629) 1,629 (186) 186 Net amounts $ 24,024 $ — $ 25,293 $ (678) $ 32,667 $ — The following table presents the location of derivatives in the Company's balance sheets, with current or noncurrent classification based on maturity dates: (In thousands) September 2023 December 2022 September 2022 Prepaid expenses and other current assets $ 24,220 $ 14,183 $ 18,523 Accrued liabilities (1,442) (1,218) (134) Other assets 1,578 12,739 14,330 Other liabilities (332) (1,089) (52) Cash Flow Hedges The following tables present the pre-tax effects of cash flow hedges included in the Company's statements of operations and statements of comprehensive income: Gain (Loss) on Derivatives Recognized in AOCL (In thousands) Three Months Ended September Nine Months Ended September Cash Flow Hedging Relationships 2023 2022 2023 2022 Foreign currency exchange contracts $ 5,700 $ 12,414 $ 23,829 $ 26,654 Interest rate swap agreements 202 5,327 1,910 15,881 Total $ 5,902 $ 17,741 $ 25,739 $ 42,535 Gain (Loss) Reclassified from AOCL into Income (In thousands) Three Months Ended September Nine Months Ended September Location of Gain (Loss) 2023 2022 2023 2022 Net revenues $ (37) $ (401) $ (270) $ (794) Cost of goods sold 7,095 4,228 17,343 8,954 Other expense, net 128 168 424 67 Interest expense 2,664 346 7,200 (1,665) Total $ 9,850 $ 4,341 $ 24,697 $ 6,562 Other Derivative Information Any contracts that are not designated as hedges are recorded at fair value in the Company's balance sheets. Changes in the fair values of derivative contracts not designated as hedges are recognized directly in earnings. There were no significant amounts recognized in earnings for the ineffective portion of any hedging relationships or changes in the fair values of derivative contracts not designated as hedges during the three and nine months ended September 2023 and September 2022. At September 2023, AOCL included $27.1 million of pre-tax net deferred gains for foreign currency exchange contracts and interest rate swap agreements that are expected to be reclassified to earnings during the next 12 months. The amounts ultimately reclassified to earnings will depend on rates in effect when outstanding derivative contracts are settled. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS The following table presents deferred components of AOCL in equity, net of related taxes: (In thousands) September 2023 December 2022 September 2022 Foreign currency translation $ (101,526) $ (107,462) $ (121,582) Defined benefit pension plans 2,136 2,243 (2,160) Derivative financial instruments 28,557 25,554 31,459 Accumulated other comprehensive loss $ (70,833) $ (79,665) $ (92,283) The following tables present changes in AOCL, net of related tax impact: Three Months Ended September 2023 (In thousands) Foreign Currency Translation Defined Benefit Pension Plans Derivative Financial Instruments Total Balance, June 2023 $ (94,610) $ 2,173 $ 32,344 $ (60,093) Other comprehensive income (loss) due to gains (losses) arising before reclassifications (6,916) — 5,176 (1,740) Reclassifications to net income of previously deferred (gains) losses — (37) (8,963) (9,000) Net other comprehensive income (loss) (6,916) (37) (3,787) (10,740) Balance, September 2023 $ (101,526) $ 2,136 $ 28,557 $ (70,833) Three Months Ended September 2022 (In thousands) Foreign Currency Translation Defined Benefit Pension Plans Derivative Financial Instruments Total Balance, June 2022 $ (110,014) $ (2,166) $ 20,223 $ (91,957) Other comprehensive income (loss) due to gains (losses) arising before reclassifications (11,568) — 15,078 3,510 Reclassifications to net income of previously deferred (gains) losses — 6 (3,842) (3,836) Net other comprehensive income (loss) (11,568) 6 11,236 (326) Balance, September 2022 $ (121,582) $ (2,160) $ 31,459 $ (92,283) Nine Months Ended September 2023 (In thousands) Foreign Currency Translation Defined Benefit Pension Plans Derivative Financial Instruments Total Balance, December 2022 $ (107,462) $ 2,243 $ 25,554 $ (79,665) Other comprehensive income (loss) due to gains (losses) arising before reclassifications 5,936 — 24,910 30,846 Reclassifications to net income of previously deferred (gains) losses — (107) (21,907) (22,014) Net other comprehensive income (loss) 5,936 (107) 3,003 8,832 Balance, September 2023 $ (101,526) $ 2,136 $ 28,557 $ (70,833) Nine Months Ended September 2022 (In thousands) Foreign Currency Translation Defined Benefit Pension Plans Derivative Financial Instruments Total Balance, December 2021 $ (93,125) $ (2,177) $ 2,546 $ (92,756) Other comprehensive income (loss) due to gains (losses) arising before reclassifications (28,457) — 35,444 6,987 Reclassifications to net income of previously deferred (gains) losses — 17 (6,531) (6,514) Net other comprehensive income (loss) (28,457) 17 28,913 473 Balance, September 2022 $ (121,582) $ (2,160) $ 31,459 $ (92,283) The following table presents reclassifications out of AOCL: (In thousands) Three Months Ended September Nine Months Ended September Details About Accumulated Other Comprehensive Loss Reclassifications Affected Line Item in the Financial Statements 2023 2022 2023 2022 Defined benefit pension plans: Net change in deferred gains (losses) during the period Selling, general and administrative expenses $ 49 $ (8) $ 142 $ (23) Total before tax 49 (8) 142 (23) Income taxes Income taxes (12) 2 (35) 6 Net of tax 37 (6) 107 (17) Gains (losses) on derivative financial instruments: Foreign currency exchange contracts Net revenues $ (37) $ (401) $ (270) $ (794) Foreign currency exchange contracts Cost of goods sold 7,095 4,228 17,343 8,954 Foreign currency exchange contracts Other expense, net 128 168 424 67 Interest rate swap agreements Interest expense 2,664 346 7,200 (1,665) Total before tax 9,850 4,341 24,697 6,562 Income taxes Income taxes (887) (499) (2,790) (31) Net of tax 8,963 3,842 21,907 6,531 Total reclassifications for the period, net of tax $ 9,000 $ 3,836 $ 22,014 $ 6,514 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The effective income tax rate for the nine months ended September 2023 was 21.4% compared to 20.1% in the 2022 period. The nine months ended September 2023 included a net discrete tax expense primarily related to the remeasurement of deferred tax assets associated with a tax holiday from local income taxes in a foreign jurisdiction. The net discrete tax expense for the nine months ended September 2023 increased the effective income tax rate by 2.4%. The nine months ended September 2022 included a net discrete tax expense primarily related to the revaluation of deferred tax balances due to a change in tax jurisdiction, partially offset by benefits from stock-based compensation. The net discrete tax expense for the nine months ended September 2022 increased the effective income tax rate by 0.7%. The effective tax rate without discrete items for the nine months ended September 2023 was 19.0% compared to 19.4% in the 2022 period. The decrease was primarily due to changes in our jurisdictional mix of earnings. During the nine months ended September 2023, the amount of net unrecognized tax benefits and associated interest increased by $0.8 million to $15.8 million. Management believes that it is reasonably possible that the amount of unrecognized tax benefits may decrease by $2.5 million within the next 12 fiscal months due to expiration of statutes of limitations, which would reduce income tax expense. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The calculations of basic and diluted earnings per share ("EPS") are based on net income divided by the basic weighted average number of common shares and diluted weighted average number of common shares outstanding, respectively. The following table presents the calculations of basic and diluted EPS: Three Months Ended September Nine Months Ended September (In thousands, except per share amounts) 2023 2022 2023 2022 Net income $ 59,531 $ 51,083 $ 162,223 $ 193,888 Basic weighted average shares outstanding 56,151 55,428 55,962 55,830 Dilutive effect of stock-based awards 805 1,122 952 1,230 Diluted weighted average shares outstanding 56,956 56,550 56,914 57,060 Earnings per share: Basic earnings per common share $ 1.06 $ 0.92 $ 2.90 $ 3.47 Diluted earnings per common share $ 1.05 $ 0.90 $ 2.85 $ 3.40 For the three and nine months ended September 2023 and September 2022, an immaterial number of shares were excluded from the dilutive earnings per share calculations because the effect of their inclusion would have been anti-dilutive. For both the three and nine months ended September 2023, a total of 0.6 million shares of performance-based restricted stock units ("PRSUs") were excluded from the calculations of diluted earnings per share as the units were not considered to be contingent outstanding shares. For the three and nine months ended September 2022, a total of 0.4 million and 0.3 million shares, respectively, of PRSUs were excluded from the calculations of diluted earnings per share as the units were not considered to be contingent outstanding shares. |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
LEASES | LEASES The Company enters into operating leases for retail stores, operational facilities, vehicles and certain equipment, with terms expiring at various dates through 2033. Most leases have fixed rentals, with many of the real estate leases requiring additional payments for real estate taxes and occupancy-related costs. The following table presents supplemental cash flow and non-cash information related to operating leases: Nine Months Ended September (In thousands) 2023 2022 Cash paid for amounts included in the measurement of lease liabilities - operating cash flows $ 23,375 $ 22,608 Right-of-use operating assets obtained in exchange for new operating leases - non-cash activity $ 13,316 $ 12,780 |
RESTRUCTURING
RESTRUCTURING | 9 Months Ended |
Sep. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING | RESTRUCTURING The Company generally incurs restructuring charges related to cost optimization of business activities, primarily related to severance and employee-related benefits. During the second quarter of 2023, the Company took actions to drive efficiencies in our operations through a reduction in our global workforce and to streamline and transfer select production within our internal manufacturing network. Of the $7.8 million of restructuring charges recognized during the nine months ended September 2023, $5.4 million were reflected within "selling, general and administrative expenses" and $2.4 million were reflected within "cost of goods sold." All of the $13.7 million of restructuring charges recognized during the three and nine months ended September 2022 were reflected within "selling, general and administrative expenses." All of the $2.2 million restructuring accrual reported in the Company's balance sheet at September 2023 is expected to be paid out within the next 12 months and was classified within "accrued liabilities." All of the $10.7 million restructuring accrual reported in the Company's balance sheet at December 2022 was classified within "accrued liabilities." The following table presents the components of restructuring charges: Three Months Ended September Nine Months Ended September (In thousands) 2023 2022 2023 2022 Severance and employee-related benefits $ — $ 13,688 $ 6,614 $ 13,688 Other — — 1,182 — Total restructuring charges $ — $ 13,688 $ 7,796 $ 13,688 The following table presents the restructuring costs by business segment: Three Months Ended September Nine Months Ended September (In thousands) 2023 2022 2023 2022 Wrangler $ — $ — $ 995 $ — Lee — — 187 — Corporate and other — 13,688 6,614 13,688 Total $ — $ 13,688 $ 7,796 $ 13,688 The following table presents activity in the restructuring accrual for the nine-month period ended September 2023: (In thousands) Total Accrual at December 2022 $ 10,695 Charges 6,614 Cash payments (15,018) Adjustments to accruals (266) Currency translation 219 Balance, September 2023 $ 2,244 |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | SUBSEQUENT EVENTOn October 26, 2023, the Board of Directors declared a regular quarterly cash dividend of $0.50 per share of the Company's Common Stock. The cash dividend will be payable on December 18, 2023, to shareholders of record at the close of business on December 8, 2023. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jul. 01, 2023 | Apr. 01, 2023 | Oct. 01, 2022 | Jul. 02, 2022 | Apr. 02, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | |
Pay vs Performance Disclosure | ||||||||
Net income | $ 59,531 | $ 36,396 | $ 66,296 | $ 51,083 | $ 61,995 | $ 80,810 | $ 162,223 | $ 193,888 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Fiscal Year | Fiscal YearThe Company operates and reports using a 52/53-week fiscal year ending on the Saturday closest to December 31 of each year. Accordingly, this Form 10-Q presents the third quarter of the Company's fiscal year ending December 30, 2023 ("fiscal 2023"), which is a 52-week fiscal year. For presentation purposes herein, all references to periods ended September 2023, December 2022 and September 2022 correspond to the fiscal periods ended September 30, 2023, December 31, 2022 and October 1, 2022, respectively. |
Basis of Presentation - Interim Financial Statements | Basis of Presentation - Interim Financial Statements The accompanying unaudited interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X and do not include all of the information and notes required by generally accepted accounting principles in the U.S. ("GAAP") for complete financial statements. In the opinion of management, the accompanying financial statements contain all normal and recurring adjustments necessary to fairly state the financial position, results of operations and cash flows of the Company for the interim periods presented. Operating results for the three and nine months ended September 2023 are not necessarily indicative of results that may be expected for any other interim period or for fiscal 2023. The unaudited financial statements should be read in conjunction with the audited consolidated financial statements included in the Company's 2022 Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as filed with the Securities and Exchange Commission on March 1, 2023 ("2022 Annual Report on Form 10-K"). |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In September 2022, the Financial Accounting Standards Board issued Accounting Standards Update 2022-04, "Disclosure of Supplier Finance Program Obligations," which requires entities that use supplier finance programs in connection with the purchase of goods and services to disclose key terms of the programs, outstanding confirmed amounts as of period end, a description of where those obligations are presented in the balance sheet and an annual rollforward of obligations. This guidance was adopted by the Company during the first quarter of 2023, except for the requirement to include a rollforward of obligations which is effective beginning in 2024 with early adoption permitted. Refer to Note 6 |
Fair Value Measurements | Certain assets and liabilities measured and reported at fair value are classified in a three-level hierarchy that prioritizes the inputs used in the valuation process. Categorization within the valuation hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The hierarchy is based on the observability and objectivity of the pricing inputs, as follows: • Level 1 — Quoted prices in active markets for identical assets or liabilities. • Level 2 — Significant directly observable data (other than Level 1 quoted prices) or significant indirectly observable data through corroboration with observable market data. Inputs would normally be (i) quoted prices in active markets for similar assets or liabilities, (ii) quoted prices in inactive markets for identical or similar assets or liabilities or (iii) information derived from or corroborated by observable market data. • Level 3 — Prices or valuation techniques that require significant unobservable data inputs. These inputs would normally be the Company's own data and judgments about assumptions that market participants would use in pricing the asset or liability. |
REVENUES (Tables)
REVENUES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following tables present revenues disaggregated by channel and geography. Revenues from licensing arrangements are included within the U.S. or Non-U.S. Wholesale channels, based on the respective region where the licensee sells the product. Direct-to-Consumer revenues include sales from company-operated Wrangler ® and Lee ® branded full-price and outlet stores, online and international concession arrangements. Other includes sales and licensing of Rock & Republic ® , other company-owned brands and private label apparel. Three Months Ended September 2023 (In thousands) Wrangler Lee Other Total Channel revenues U.S. Wholesale $ 355,608 $ 103,564 $ 1,799 $ 460,971 Non-U.S. Wholesale 53,644 71,433 — 125,077 Direct-to-Consumer 35,287 33,030 175 68,492 Total $ 444,539 $ 208,027 $ 1,974 $ 654,540 Geographic revenues U.S. $ 385,501 $ 118,352 $ 1,974 $ 505,827 International 59,038 89,675 — 148,713 Total $ 444,539 $ 208,027 $ 1,974 $ 654,540 Three Months Ended September 2022 (In thousands) Wrangler Lee Other Total Channel revenues U.S. Wholesale $ 324,564 $ 84,122 $ 1,771 $ 410,457 Non-U.S. Wholesale 50,448 81,682 28 132,158 Direct-to-Consumer 31,149 32,661 96 63,906 Total $ 406,161 $ 198,465 $ 1,895 $ 606,521 Geographic revenues U.S. $ 351,624 $ 98,862 $ 1,867 $ 452,353 International 54,537 99,603 28 154,168 Total $ 406,161 $ 198,465 $ 1,895 $ 606,521 Nine Months Ended September 2023 (In thousands) Wrangler Lee Other Total Channel revenues U.S. Wholesale $ 1,048,491 $ 337,081 $ 7,393 $ 1,392,965 Non-U.S. Wholesale 143,667 188,670 10 332,347 Direct-to-Consumer 101,013 110,933 414 212,360 Total $ 1,293,171 $ 636,684 $ 7,817 $ 1,937,672 Geographic revenues U.S. $ 1,132,741 $ 382,290 $ 7,807 $ 1,522,838 International 160,430 254,394 10 414,834 Total $ 1,293,171 $ 636,684 $ 7,817 $ 1,937,672 Nine Months Ended September 2022 (In thousands) Wrangler Lee Other Total Channel revenues U.S. Wholesale $ 1,003,753 $ 341,125 $ 6,425 $ 1,351,303 Non-U.S. Wholesale 143,724 212,591 903 357,218 Direct-to-Consumer 89,051 102,022 242 191,315 Total $ 1,236,528 $ 655,738 $ 7,570 $ 1,899,836 Geographic revenues U.S. $ 1,078,998 $ 384,035 $ 6,667 $ 1,469,700 International 157,530 271,703 903 430,136 Total $ 1,236,528 $ 655,738 $ 7,570 $ 1,899,836 |
Contract Assets and Liabilities | The following table presents information about contract balances recorded in the Company's balance sheets: (In thousands) September 2023 December 2022 September 2022 Accounts receivable, net $ 236,816 $ 225,858 $ 234,569 Contract assets (a) 8,704 5,050 6,599 Contract liabilities (b) 1,348 1,057 919 (a) Included within "prepaid expenses and other current assets" in the Company's balance sheets. (b) Included within "accrued liabilities" in the Company's balance sheets. |
BUSINESS SEGMENT INFORMATION (T
BUSINESS SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Financial Information for Reportable Segments | The following table presents financial information for the Company's reportable segments and income before income taxes: Three Months Ended September Nine Months Ended September (In thousands) 2023 2022 2023 2022 Segment revenues: Wrangler $ 444,539 $ 406,161 $ 1,293,171 $ 1,236,528 Lee 208,027 198,465 636,684 655,738 Total reportable segment revenues 652,566 604,626 1,929,855 1,892,266 Other revenues 1,974 1,895 7,817 7,570 Total net revenues $ 654,540 $ 606,521 $ 1,937,672 $ 1,899,836 Segment profit: Wrangler $ 81,556 $ 75,597 $ 223,639 $ 226,049 Lee 20,735 26,703 77,473 101,837 Total reportable segment profit $ 102,291 $ 102,300 $ 301,112 $ 327,886 Corporate and other expenses (20,091) (28,775) (65,815) (60,774) Interest expense (10,454) (8,858) (30,390) (25,115) Interest income 964 263 2,074 1,028 Loss related to other revenues (482) (678) (611) (267) Income before income taxes $ 72,228 $ 64,252 $ 206,370 $ 242,758 |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
Rollforward of the Allowance for Doubtful Accounts | The following table presents a rollforward of the allowance for doubtful accounts: Nine Months Ended September (In thousands) 2023 2022 Balance, December $ 9,918 $ 11,705 Increase in provision for expected credit losses 87 2,116 Accounts receivable balances written off (1,247) (1,069) Other (1) (105) (1,197) Balance, September $ 8,653 $ 11,555 (1) Other primarily includes the impact of foreign currency translation and recoveries of amounts previously written off, none of which were individually significant. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | The following table presents components of "inventories" recorded in the Company's balance sheets: (In thousands) September 2023 December 2022 September 2022 Finished products $ 526,633 $ 509,554 $ 584,480 Work-in-process 34,325 34,316 37,823 Raw materials 44,276 52,966 55,904 Total inventories $ 605,234 $ 596,836 $ 678,207 |
SHORT-TERM BORROWINGS AND LON_2
SHORT-TERM BORROWINGS AND LONG-TERM DEBT (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The following table presents the components of "long-term debt" as recorded in the Company's balance sheets: (In thousands) September 2023 December 2022 September 2022 Revolving Credit Facility $ — $ — $ 40,000 Term Loan A 390,849 397,954 397,822 4.125% Notes, due 2029 395,246 394,665 394,471 Total long-term debt 786,095 792,619 832,293 Less: current portion (17,500) (10,000) (7,500) Long-term debt, due beyond one year $ 768,595 $ 782,619 $ 824,793 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Classes of Financial Assets and Financial Liabilities Measured and Recorded at Fair Value on Recurring Basis | The following tables present financial assets and financial liabilities that are measured and recorded in the Company's financial statements at fair value on a recurring basis: Fair Value Measurement Using (In thousands) Total Fair Value Level 1 Level 2 Level 3 September 2023 Financial assets: Cash equivalents: Money market funds $ 53,655 $ 53,655 $ — $ — Time deposits 2,286 2,286 — — Foreign currency exchange contracts 19,731 — 19,731 — Interest rate swap agreements 6,067 — 6,067 — Investment securities 44,841 44,841 — — Financial liabilities: Foreign currency exchange contracts 1,774 — 1,774 — Deferred compensation 46,799 — 46,799 — Fair Value Measurement Using (In thousands) Total Fair Value Level 1 Level 2 Level 3 December 2022 Financial assets: Cash equivalents: Money market funds $ 20,097 $ 20,097 $ — $ — Time deposits 2,194 2,194 — — Foreign currency exchange contracts 15,565 — 15,565 — Interest rate swap agreements 11,357 — 11,357 — Investment securities 43,131 43,131 — — Financial liabilities: Foreign currency exchange contracts 2,307 — 2,307 — Deferred compensation 44,589 — 44,589 — |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The following table presents the fair value of outstanding derivatives on an individual contract basis: Fair Value of Derivatives Fair Value of Derivatives September December September September December September (In thousands) 2023 2022 2022 2023 2022 2022 Derivatives designated as hedging instruments: Foreign currency exchange contracts $ 19,717 $ 15,565 $ 21,329 $ (1,737) $ (2,307) $ (186) Interest rate swap agreements 6,067 11,357 11,494 — — — Derivatives not designated as hedging instruments: Foreign currency exchange contracts 14 — 30 (37) — — Total derivatives $ 25,798 $ 26,922 $ 32,853 $ (1,774) $ (2,307) $ (186) The following table presents a reconciliation of gross to net amounts for derivative asset and liability balances: September 2023 December 2022 September 2022 (In thousands) Derivative Asset Derivative Liability Derivative Asset Derivative Liability Derivative Asset Derivative Liability Gross amounts presented in the balance sheet $ 25,798 $ (1,774) $ 26,922 $ (2,307) $ 32,853 $ (186) Gross amounts not offset in the balance sheet (1,774) 1,774 (1,629) 1,629 (186) 186 Net amounts $ 24,024 $ — $ 25,293 $ (678) $ 32,667 $ — The following table presents the location of derivatives in the Company's balance sheets, with current or noncurrent classification based on maturity dates: (In thousands) September 2023 December 2022 September 2022 Prepaid expenses and other current assets $ 24,220 $ 14,183 $ 18,523 Accrued liabilities (1,442) (1,218) (134) Other assets 1,578 12,739 14,330 Other liabilities (332) (1,089) (52) |
Pre-Tax Effects of Cash Flow Hedges Included in the Statement of Operations and Statements of Comprehensive Income (Loss) | The following tables present the pre-tax effects of cash flow hedges included in the Company's statements of operations and statements of comprehensive income: Gain (Loss) on Derivatives Recognized in AOCL (In thousands) Three Months Ended September Nine Months Ended September Cash Flow Hedging Relationships 2023 2022 2023 2022 Foreign currency exchange contracts $ 5,700 $ 12,414 $ 23,829 $ 26,654 Interest rate swap agreements 202 5,327 1,910 15,881 Total $ 5,902 $ 17,741 $ 25,739 $ 42,535 Gain (Loss) Reclassified from AOCL into Income (In thousands) Three Months Ended September Nine Months Ended September Location of Gain (Loss) 2023 2022 2023 2022 Net revenues $ (37) $ (401) $ (270) $ (794) Cost of goods sold 7,095 4,228 17,343 8,954 Other expense, net 128 168 424 67 Interest expense 2,664 346 7,200 (1,665) Total $ 9,850 $ 4,341 $ 24,697 $ 6,562 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Deferred Components of AOCL in Equity, Net of Related Taxes, and Changes in AOCL | The following table presents deferred components of AOCL in equity, net of related taxes: (In thousands) September 2023 December 2022 September 2022 Foreign currency translation $ (101,526) $ (107,462) $ (121,582) Defined benefit pension plans 2,136 2,243 (2,160) Derivative financial instruments 28,557 25,554 31,459 Accumulated other comprehensive loss $ (70,833) $ (79,665) $ (92,283) The following tables present changes in AOCL, net of related tax impact: Three Months Ended September 2023 (In thousands) Foreign Currency Translation Defined Benefit Pension Plans Derivative Financial Instruments Total Balance, June 2023 $ (94,610) $ 2,173 $ 32,344 $ (60,093) Other comprehensive income (loss) due to gains (losses) arising before reclassifications (6,916) — 5,176 (1,740) Reclassifications to net income of previously deferred (gains) losses — (37) (8,963) (9,000) Net other comprehensive income (loss) (6,916) (37) (3,787) (10,740) Balance, September 2023 $ (101,526) $ 2,136 $ 28,557 $ (70,833) Three Months Ended September 2022 (In thousands) Foreign Currency Translation Defined Benefit Pension Plans Derivative Financial Instruments Total Balance, June 2022 $ (110,014) $ (2,166) $ 20,223 $ (91,957) Other comprehensive income (loss) due to gains (losses) arising before reclassifications (11,568) — 15,078 3,510 Reclassifications to net income of previously deferred (gains) losses — 6 (3,842) (3,836) Net other comprehensive income (loss) (11,568) 6 11,236 (326) Balance, September 2022 $ (121,582) $ (2,160) $ 31,459 $ (92,283) Nine Months Ended September 2023 (In thousands) Foreign Currency Translation Defined Benefit Pension Plans Derivative Financial Instruments Total Balance, December 2022 $ (107,462) $ 2,243 $ 25,554 $ (79,665) Other comprehensive income (loss) due to gains (losses) arising before reclassifications 5,936 — 24,910 30,846 Reclassifications to net income of previously deferred (gains) losses — (107) (21,907) (22,014) Net other comprehensive income (loss) 5,936 (107) 3,003 8,832 Balance, September 2023 $ (101,526) $ 2,136 $ 28,557 $ (70,833) Nine Months Ended September 2022 (In thousands) Foreign Currency Translation Defined Benefit Pension Plans Derivative Financial Instruments Total Balance, December 2021 $ (93,125) $ (2,177) $ 2,546 $ (92,756) Other comprehensive income (loss) due to gains (losses) arising before reclassifications (28,457) — 35,444 6,987 Reclassifications to net income of previously deferred (gains) losses — 17 (6,531) (6,514) Net other comprehensive income (loss) (28,457) 17 28,913 473 Balance, September 2022 $ (121,582) $ (2,160) $ 31,459 $ (92,283) |
Reclassification Out of AOCL | The following table presents reclassifications out of AOCL: (In thousands) Three Months Ended September Nine Months Ended September Details About Accumulated Other Comprehensive Loss Reclassifications Affected Line Item in the Financial Statements 2023 2022 2023 2022 Defined benefit pension plans: Net change in deferred gains (losses) during the period Selling, general and administrative expenses $ 49 $ (8) $ 142 $ (23) Total before tax 49 (8) 142 (23) Income taxes Income taxes (12) 2 (35) 6 Net of tax 37 (6) 107 (17) Gains (losses) on derivative financial instruments: Foreign currency exchange contracts Net revenues $ (37) $ (401) $ (270) $ (794) Foreign currency exchange contracts Cost of goods sold 7,095 4,228 17,343 8,954 Foreign currency exchange contracts Other expense, net 128 168 424 67 Interest rate swap agreements Interest expense 2,664 346 7,200 (1,665) Total before tax 9,850 4,341 24,697 6,562 Income taxes Income taxes (887) (499) (2,790) (31) Net of tax 8,963 3,842 21,907 6,531 Total reclassifications for the period, net of tax $ 9,000 $ 3,836 $ 22,014 $ 6,514 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | The following table presents the calculations of basic and diluted EPS: Three Months Ended September Nine Months Ended September (In thousands, except per share amounts) 2023 2022 2023 2022 Net income $ 59,531 $ 51,083 $ 162,223 $ 193,888 Basic weighted average shares outstanding 56,151 55,428 55,962 55,830 Dilutive effect of stock-based awards 805 1,122 952 1,230 Diluted weighted average shares outstanding 56,956 56,550 56,914 57,060 Earnings per share: Basic earnings per common share $ 1.06 $ 0.92 $ 2.90 $ 3.47 Diluted earnings per common share $ 1.05 $ 0.90 $ 2.85 $ 3.40 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Supplemental Cash Flow and Non-Cash Information Related to Operating Leases | The following table presents supplemental cash flow and non-cash information related to operating leases: Nine Months Ended September (In thousands) 2023 2022 Cash paid for amounts included in the measurement of lease liabilities - operating cash flows $ 23,375 $ 22,608 Right-of-use operating assets obtained in exchange for new operating leases - non-cash activity $ 13,316 $ 12,780 |
RESTRUCTURING (Tables)
RESTRUCTURING (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
Components of Restructuring Charges | The following table presents the components of restructuring charges: Three Months Ended September Nine Months Ended September (In thousands) 2023 2022 2023 2022 Severance and employee-related benefits $ — $ 13,688 $ 6,614 $ 13,688 Other — — 1,182 — Total restructuring charges $ — $ 13,688 $ 7,796 $ 13,688 The following table presents the restructuring costs by business segment: Three Months Ended September Nine Months Ended September (In thousands) 2023 2022 2023 2022 Wrangler $ — $ — $ 995 $ — Lee — — 187 — Corporate and other — 13,688 6,614 13,688 Total $ — $ 13,688 $ 7,796 $ 13,688 |
Activity in Restructuring | The following table presents activity in the restructuring accrual for the nine-month period ended September 2023: (In thousands) Total Accrual at December 2022 $ 10,695 Charges 6,614 Cash payments (15,018) Adjustments to accruals (266) Currency translation 219 Balance, September 2023 $ 2,244 |
BASIS OF PRESENTATION - Additio
BASIS OF PRESENTATION - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Cost of goods sold | $ 383,075 | $ 342,460 | $ 1,129,245 | $ 1,064,190 |
Revision of Prior Period, Adjustment | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Cost of goods sold | $ 13,100 |
REVENUES - Disaggregation of Re
REVENUES - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 654,540 | $ 606,521 | $ 1,937,672 | $ 1,899,836 |
U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 505,827 | 452,353 | 1,522,838 | 1,469,700 |
International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 148,713 | 154,168 | 414,834 | 430,136 |
Wholesale | U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 460,971 | 410,457 | 1,392,965 | 1,351,303 |
Wholesale | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 125,077 | 132,158 | 332,347 | 357,218 |
Direct-to-Consumer | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 68,492 | 63,906 | 212,360 | 191,315 |
Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 652,566 | 604,626 | 1,929,855 | 1,892,266 |
Operating Segments | Wrangler | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 444,539 | 406,161 | 1,293,171 | 1,236,528 |
Operating Segments | Wrangler | U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 385,501 | 351,624 | 1,132,741 | 1,078,998 |
Operating Segments | Wrangler | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 59,038 | 54,537 | 160,430 | 157,530 |
Operating Segments | Wrangler | Wholesale | U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 355,608 | 324,564 | 1,048,491 | 1,003,753 |
Operating Segments | Wrangler | Wholesale | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 53,644 | 50,448 | 143,667 | 143,724 |
Operating Segments | Wrangler | Direct-to-Consumer | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 35,287 | 31,149 | 101,013 | 89,051 |
Operating Segments | Lee | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 208,027 | 198,465 | 636,684 | 655,738 |
Operating Segments | Lee | U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 118,352 | 98,862 | 382,290 | 384,035 |
Operating Segments | Lee | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 89,675 | 99,603 | 254,394 | 271,703 |
Operating Segments | Lee | Wholesale | U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 103,564 | 84,122 | 337,081 | 341,125 |
Operating Segments | Lee | Wholesale | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 71,433 | 81,682 | 188,670 | 212,591 |
Operating Segments | Lee | Direct-to-Consumer | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 33,030 | 32,661 | 110,933 | 102,022 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,974 | 1,895 | 7,817 | 7,570 |
Other | U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,974 | 1,867 | 7,807 | 6,667 |
Other | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 28 | 10 | 903 |
Other | Wholesale | U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,799 | 1,771 | 7,393 | 6,425 |
Other | Wholesale | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 28 | 10 | 903 |
Other | Direct-to-Consumer | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 175 | $ 96 | $ 414 | $ 242 |
REVENUES - Contract Assets and
REVENUES - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Oct. 01, 2022 |
Revenue from Contract with Customer [Abstract] | |||
Accounts receivable, net | $ 236,816 | $ 225,858 | $ 234,569 |
Contract assets | 8,704 | 5,050 | 6,599 |
Contract liabilities | $ 1,348 | $ 1,057 | $ 919 |
REVENUES - Additional Informati
REVENUES - Additional Information (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 62.1 |
BUSINESS SEGMENT INFORMATION -
BUSINESS SEGMENT INFORMATION - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2023 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
BUSINESS SEGMENT INFORMATION _2
BUSINESS SEGMENT INFORMATION - Financial Information for Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | |
Segment Reporting Information [Line Items] | ||||
Total net revenues | $ 654,540 | $ 606,521 | $ 1,937,672 | $ 1,899,836 |
Total reportable segment profit | 85,482 | 75,066 | 243,828 | 272,032 |
Interest expense | (10,454) | (8,858) | (30,390) | (25,115) |
Interest income | 964 | 263 | 2,074 | 1,028 |
Income before income taxes | 72,228 | 64,252 | 206,370 | 242,758 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 652,566 | 604,626 | 1,929,855 | 1,892,266 |
Total reportable segment profit | 102,291 | 102,300 | 301,112 | 327,886 |
Operating Segments | Wrangler | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 444,539 | 406,161 | 1,293,171 | 1,236,528 |
Total reportable segment profit | 81,556 | 75,597 | 223,639 | 226,049 |
Operating Segments | Lee | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 208,027 | 198,465 | 636,684 | 655,738 |
Total reportable segment profit | 20,735 | 26,703 | 77,473 | 101,837 |
Corporate and other expenses | ||||
Segment Reporting Information [Line Items] | ||||
Corporate and other expenses | (20,091) | (28,775) | (65,815) | (60,774) |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 1,974 | 1,895 | 7,817 | 7,570 |
Total reportable segment profit | $ (482) | $ (678) | $ (611) | $ (267) |
ACCOUNTS RECEIVABLE - Rollforwa
ACCOUNTS RECEIVABLE - Rollforward of the Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 9,918 | $ 11,705 |
Increase in provision for expected credit losses | 87 | 2,116 |
Accounts receivable balances written off | (1,247) | (1,069) |
Other | (105) | (1,197) |
Ending balance | $ 8,653 | $ 11,555 |
ACCOUNTS RECEIVABLE - Additiona
ACCOUNTS RECEIVABLE - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Oct. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | Dec. 31, 2022 | |
Receivables [Abstract] | |||||
Maximum amount of accounts receivable sold at any point in time (up to) | $ 377.5 | $ 377.5 | |||
Sale of accounts receivable | 1,023.5 | $ 1,016 | |||
Accounts receivable removed related to sale of accounts receivable | 216.2 | $ 197.8 | 216.2 | 197.8 | $ 246 |
Funding fee | $ 3 | $ 1.4 | $ 9.1 | $ 3 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Oct. 01, 2022 |
Inventory Disclosure [Abstract] | |||
Finished products | $ 526,633 | $ 509,554 | $ 584,480 |
Work-in-process | 34,325 | 34,316 | 37,823 |
Raw materials | 44,276 | 52,966 | 55,904 |
Total inventories | $ 605,234 | $ 596,836 | $ 678,207 |
Supply Chain Financing (Details
Supply Chain Financing (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 | Oct. 01, 2022 |
Supply Chain Financing [Abstract] | |||
Accounts payable, trade | $ 21.9 | $ 24.7 | $ 21 |
SHORT-TERM BORROWINGS AND LON_3
SHORT-TERM BORROWINGS AND LONG-TERM DEBT - Short-term Borrowings (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Oct. 01, 2022 |
Short-term Debt [Line Items] | |||
Short-term borrowings | $ 0 | $ 7,280 | $ 7,093 |
Other short-term borrowings | 0 | 200 | 200 |
International borrowing arrangements | |||
Short-term Debt [Line Items] | |||
Debt capacity | 23,700 | 24,800 | 24,300 |
Short-term borrowings | $ 0 | $ 7,100 | $ 6,900 |
SHORT-TERM BORROWINGS AND LON_4
SHORT-TERM BORROWINGS AND LONG-TERM DEBT - Schedule of Long-term Debt Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Oct. 01, 2022 | Nov. 18, 2021 |
Debt Instrument [Line Items] | ||||
Total long-term debt | $ 786,095 | $ 792,619 | $ 832,293 | |
Less: current portion | (17,500) | (10,000) | (7,500) | |
Long-term debt, due beyond one year | 768,595 | 782,619 | 824,793 | |
Term Loan A | Term Loan | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | 390,849 | 397,954 | 397,822 | |
Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | 0 | 0 | 40,000 | |
Senior Notes | 4.125% Senior Notes, due 2029 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate, stated percentage | 4.125% | |||
Total long-term debt | $ 395,246 | $ 394,665 | $ 394,471 |
SHORT-TERM BORROWINGS AND LON_5
SHORT-TERM BORROWINGS AND LONG-TERM DEBT - Credit Facilities (Details) | 9 Months Ended | |||
Nov. 18, 2021 USD ($) | Sep. 30, 2023 USD ($) election | Dec. 31, 2022 USD ($) | Oct. 01, 2022 USD ($) | |
Debt Instrument [Line Items] | ||||
Debt instrument, leverage ratio, number of elections to increase the limit (up to) | election | 2 | |||
Maximum | ||||
Debt Instrument [Line Items] | ||||
Leverage ratio | 4.50 | |||
Debt instrument, leverage ratio, limit increase | 5 | |||
Minimum | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest coverage ratio | 3 | |||
Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, term | 5 years | |||
Debt capacity | $ 500,000,000 | |||
Long-term debt, gross | $ 0 | |||
Remaining borrowing capacity | 488,300,000 | |||
Letter of Credit | ||||
Debt Instrument [Line Items] | ||||
Debt capacity | 75,000,000 | |||
Long-term line of credit | 11,700,000 | |||
4.125% Senior Notes, due 2029 | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 400,000,000 | |||
Long-term debt, gross | $ 400,000,000 | $ 400,000,000 | $ 400,000,000 | |
Effective annual interest rate | 4.30% | |||
Term Loan | Term Loan A | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, term | 5 years | |||
Debt capacity | $ 400,000,000 | |||
Long-term debt, gross | $ 392,500,000 | $ 400,000,000 | $ 400,000,000 | |
Effective annual interest rate | 4.40% |
SHORT-TERM BORROWINGS AND LON_6
SHORT-TERM BORROWINGS AND LONG-TERM DEBT - Senior Notes (Details) - USD ($) $ in Millions | 9 Months Ended | |||
Sep. 30, 2023 | Oct. 01, 2022 | Dec. 31, 2022 | Nov. 18, 2021 | |
Debt Instrument [Line Items] | ||||
Interest paid, excluding capitalized interest, operating activities | $ 23.5 | $ 18.7 | ||
4.125% Senior Notes, due 2029 | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 400 | |||
Debt instrument, interest rate, stated percentage | 4.125% | |||
Long-term debt, gross | $ 400 | $ 400 | $ 400 | |
Effective annual interest rate | 4.30% |
FAIR VALUE MEASUREMENTS - Class
FAIR VALUE MEASUREMENTS - Classes of Financial Assets and Financial Liabilities Measured and Recorded at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Oct. 01, 2022 |
Cash equivalents: | |||
Money market funds | $ 53,655 | $ 20,097 | |
Time deposits | 2,286 | 2,194 | |
Foreign currency exchange contracts | 25,798 | 26,922 | $ 32,853 |
Investment securities | 44,841 | 43,131 | |
Financial liabilities: | |||
Foreign currency exchange contracts | 1,774 | 2,307 | $ 186 |
Deferred compensation | 46,799 | 44,589 | |
Level 1 | |||
Cash equivalents: | |||
Money market funds | 53,655 | 20,097 | |
Time deposits | 2,286 | 2,194 | |
Investment securities | 44,841 | 43,131 | |
Financial liabilities: | |||
Deferred compensation | 0 | 0 | |
Level 2 | |||
Cash equivalents: | |||
Money market funds | 0 | 0 | |
Time deposits | 0 | 0 | |
Investment securities | 0 | 0 | |
Financial liabilities: | |||
Deferred compensation | 46,799 | 44,589 | |
Level 3 | |||
Cash equivalents: | |||
Money market funds | 0 | 0 | |
Time deposits | 0 | 0 | |
Investment securities | 0 | 0 | |
Financial liabilities: | |||
Deferred compensation | 0 | 0 | |
Foreign currency exchange contracts | |||
Cash equivalents: | |||
Foreign currency exchange contracts | 19,731 | 15,565 | |
Financial liabilities: | |||
Foreign currency exchange contracts | 1,774 | 2,307 | |
Foreign currency exchange contracts | Level 1 | |||
Cash equivalents: | |||
Foreign currency exchange contracts | 0 | 0 | |
Financial liabilities: | |||
Foreign currency exchange contracts | 0 | 0 | |
Foreign currency exchange contracts | Level 2 | |||
Cash equivalents: | |||
Foreign currency exchange contracts | 19,731 | 15,565 | |
Financial liabilities: | |||
Foreign currency exchange contracts | 1,774 | 2,307 | |
Foreign currency exchange contracts | Level 3 | |||
Cash equivalents: | |||
Foreign currency exchange contracts | 0 | 0 | |
Financial liabilities: | |||
Foreign currency exchange contracts | 0 | 0 | |
Interest rate swap agreements | |||
Cash equivalents: | |||
Foreign currency exchange contracts | 6,067 | 11,357 | |
Interest rate swap agreements | Level 1 | |||
Cash equivalents: | |||
Foreign currency exchange contracts | 0 | 0 | |
Interest rate swap agreements | Level 2 | |||
Cash equivalents: | |||
Foreign currency exchange contracts | 6,067 | 11,357 | |
Interest rate swap agreements | Level 3 | |||
Cash equivalents: | |||
Foreign currency exchange contracts | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Addit
FAIR VALUE MEASUREMENTS - Additional Information (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Oct. 01, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term debt | $ 786,095 | $ 792,619 | $ 832,293 |
Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt, fair value | $ 720,500 | $ 718,000 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Additional Information (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2023 | Dec. 31, 2022 | Oct. 01, 2022 | |
Derivative [Line Items] | |||
Cash flow hedge gains to be reclassified during the next 12 months | $ 27.1 | ||
Foreign currency exchange contracts | |||
Derivative [Line Items] | |||
Notional amount | $ 339.9 | $ 322.3 | $ 292.8 |
Term of contract (up to) | 20 months | ||
Interest rate swap agreements | |||
Derivative [Line Items] | |||
Notional amount | $ 300 | $ 300 | $ 300 |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Outstanding Derivatives on an Individual Contract Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Oct. 01, 2022 |
Fair Value of Derivatives with Unrealized Gains | |||
Total derivatives | $ 25,798 | $ 26,922 | $ 32,853 |
Fair Value of Derivatives with Unrealized Losses | |||
Total derivatives | (1,774) | (2,307) | (186) |
Designated as Hedging Instrument | Foreign currency exchange contracts | |||
Fair Value of Derivatives with Unrealized Gains | |||
Derivatives designated as hedging instruments: | 19,717 | 15,565 | 21,329 |
Fair Value of Derivatives with Unrealized Losses | |||
Derivatives designated as hedging instruments: | (1,737) | (2,307) | (186) |
Designated as Hedging Instrument | Interest rate swap agreements | |||
Fair Value of Derivatives with Unrealized Gains | |||
Derivatives designated as hedging instruments: | 6,067 | 11,357 | 11,494 |
Fair Value of Derivatives with Unrealized Losses | |||
Derivatives designated as hedging instruments: | 0 | 0 | 0 |
Not Designated as Hedging Instrument | Foreign currency exchange contracts | |||
Fair Value of Derivatives with Unrealized Gains | |||
Derivatives not designated as hedging instruments: | 14 | 0 | 30 |
Fair Value of Derivatives with Unrealized Losses | |||
Derivatives not designated as hedging instruments: | $ (37) | $ 0 | $ 0 |
DERIVATIVE FINANCIAL INSTRUME_5
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Reconciliation of Gross to Net Amounts for Derivative Asset and Liability Balances (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Oct. 01, 2022 |
Derivative Asset | |||
Gross amounts presented in the balance sheet | $ 25,798 | $ 26,922 | $ 32,853 |
Gross amounts not offset in the balance sheet | (1,774) | (1,629) | (186) |
Derivative Asset | 24,024 | 25,293 | 32,667 |
Derivative Liability | |||
Gross amounts presented in the balance sheet | (1,774) | (2,307) | (186) |
Gross amounts not offset in the balance sheet | 1,774 | 1,629 | 186 |
Derivative Liability | $ 0 | $ (678) | $ 0 |
DERIVATIVE FINANCIAL INSTRUME_6
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Location of Derivative in the Balance Sheets, with Current and Noncurrent Classification (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Oct. 01, 2022 |
Derivatives, Fair Value [Line Items] | |||
Foreign currency exchange contracts | $ 25,798 | $ 26,922 | $ 32,853 |
Foreign currency exchange contracts | (1,774) | (2,307) | (186) |
Prepaid expenses and other current assets | |||
Derivatives, Fair Value [Line Items] | |||
Foreign currency exchange contracts | 24,220 | 14,183 | 18,523 |
Accrued liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Foreign currency exchange contracts | (1,442) | (1,218) | (134) |
Other assets | |||
Derivatives, Fair Value [Line Items] | |||
Foreign currency exchange contracts | 1,578 | 12,739 | 14,330 |
Other liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Foreign currency exchange contracts | $ (332) | $ (1,089) | $ (52) |
DERIVATIVE FINANCIAL INSTRUME_7
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Cash Flow Hedging Relationships (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | |
Derivative [Line Items] | ||||
Gain (Loss) on Derivatives Recognized in AOCL | $ 5,902 | $ 17,741 | $ 25,739 | $ 42,535 |
Foreign currency exchange contracts | ||||
Derivative [Line Items] | ||||
Gain (Loss) on Derivatives Recognized in AOCL | 5,700 | 12,414 | 23,829 | 26,654 |
Interest rate swap agreements | ||||
Derivative [Line Items] | ||||
Gain (Loss) on Derivatives Recognized in AOCL | $ 202 | $ 5,327 | $ 1,910 | $ 15,881 |
DERIVATIVE FINANCIAL INSTRUME_8
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Location of Gain (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | |
Derivative [Line Items] | ||||
Gain (Loss) Reclassified from AOCL into Income | $ 9,850 | $ 4,341 | $ 24,697 | $ 6,562 |
Net revenues | ||||
Derivative [Line Items] | ||||
Gain (Loss) Reclassified from AOCL into Income | (37) | (401) | (270) | (794) |
Cost of goods sold | ||||
Derivative [Line Items] | ||||
Gain (Loss) Reclassified from AOCL into Income | 7,095 | 4,228 | 17,343 | 8,954 |
Other expense, net | ||||
Derivative [Line Items] | ||||
Gain (Loss) Reclassified from AOCL into Income | 128 | 168 | 424 | 67 |
Interest expense | ||||
Derivative [Line Items] | ||||
Gain (Loss) Reclassified from AOCL into Income | $ 2,664 | $ 346 | $ 7,200 | $ (1,665) |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS - Deferred Components of AOCL in Equity, Net of Related Taxes (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Jul. 01, 2023 | Apr. 01, 2023 | Dec. 31, 2022 | Oct. 01, 2022 | Jul. 02, 2022 | Apr. 02, 2022 | Jan. 01, 2022 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Accumulated other comprehensive loss | $ 347,624 | $ 323,251 | $ 299,288 | $ 250,757 | $ 208,099 | $ 179,189 | $ 184,090 | $ 148,138 |
Accumulated Other Comprehensive Loss | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Accumulated other comprehensive loss | (70,833) | (60,093) | $ (68,005) | (79,665) | (92,283) | (91,957) | $ (83,697) | (92,756) |
Foreign Currency Translation | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Accumulated other comprehensive loss | (101,526) | (94,610) | (107,462) | (121,582) | (110,014) | (93,125) | ||
Defined benefit pension plans: | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Accumulated other comprehensive loss | 2,136 | 2,173 | 2,243 | (2,160) | (2,166) | (2,177) | ||
Gains (losses) on derivative financial instruments: | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Accumulated other comprehensive loss | $ 28,557 | $ 32,344 | $ 25,554 | $ 31,459 | $ 20,223 | $ 2,546 |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE LOSS - Changes in AOCL, Net of Related Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jul. 01, 2023 | Apr. 01, 2023 | Oct. 01, 2022 | Jul. 02, 2022 | Apr. 02, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||
Balance, beginning | $ 323,251 | $ 299,288 | $ 250,757 | $ 179,189 | $ 184,090 | $ 148,138 | $ 250,757 | $ 148,138 |
Other comprehensive income (loss) due to gains (losses) arising before reclassifications | (1,740) | 3,510 | 30,846 | 6,987 | ||||
Reclassifications to net income of previously deferred (gains) losses | (9,000) | (3,836) | (22,014) | (6,514) | ||||
Total other comprehensive (loss) income, net of related taxes | (10,740) | 7,912 | 11,660 | (326) | (8,260) | 9,059 | 8,832 | 473 |
Balance, ending | 347,624 | 323,251 | 299,288 | 208,099 | 179,189 | 184,090 | 347,624 | 208,099 |
Accumulated Other Comprehensive Loss | ||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||
Balance, beginning | (60,093) | (68,005) | (79,665) | (91,957) | (83,697) | (92,756) | (79,665) | (92,756) |
Total other comprehensive (loss) income, net of related taxes | (10,740) | 7,912 | 11,660 | (326) | (8,260) | 9,059 | ||
Balance, ending | (70,833) | (60,093) | (68,005) | (92,283) | (91,957) | (83,697) | (70,833) | (92,283) |
Foreign Currency Translation | ||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||
Balance, beginning | (94,610) | (107,462) | (110,014) | (93,125) | (107,462) | (93,125) | ||
Other comprehensive income (loss) due to gains (losses) arising before reclassifications | (6,916) | (11,568) | 5,936 | (28,457) | ||||
Reclassifications to net income of previously deferred (gains) losses | 0 | 0 | 0 | 0 | ||||
Total other comprehensive (loss) income, net of related taxes | (6,916) | (11,568) | 5,936 | (28,457) | ||||
Balance, ending | (101,526) | (94,610) | (121,582) | (110,014) | (101,526) | (121,582) | ||
Defined benefit pension plans: | ||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||
Balance, beginning | 2,173 | 2,243 | (2,166) | (2,177) | 2,243 | (2,177) | ||
Other comprehensive income (loss) due to gains (losses) arising before reclassifications | 0 | 0 | 0 | 0 | ||||
Reclassifications to net income of previously deferred (gains) losses | (37) | 6 | (107) | 17 | ||||
Total other comprehensive (loss) income, net of related taxes | (37) | 6 | (107) | 17 | ||||
Balance, ending | 2,136 | 2,173 | (2,160) | (2,166) | 2,136 | (2,160) | ||
Gains (losses) on derivative financial instruments: | ||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||
Balance, beginning | 32,344 | $ 25,554 | 20,223 | $ 2,546 | 25,554 | 2,546 | ||
Other comprehensive income (loss) due to gains (losses) arising before reclassifications | 5,176 | 15,078 | 24,910 | 35,444 | ||||
Reclassifications to net income of previously deferred (gains) losses | (8,963) | (3,842) | (21,907) | (6,531) | ||||
Total other comprehensive (loss) income, net of related taxes | (3,787) | 11,236 | 3,003 | 28,913 | ||||
Balance, ending | $ 28,557 | $ 32,344 | $ 31,459 | $ 20,223 | $ 28,557 | $ 31,459 |
ACCUMULATED OTHER COMPREHENSI_5
ACCUMULATED OTHER COMPREHENSIVE LOSS - Reclassification Out of AOCL (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jul. 01, 2023 | Apr. 01, 2023 | Oct. 01, 2022 | Jul. 02, 2022 | Apr. 02, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Selling, general and administrative expenses | $ 185,983 | $ 188,995 | $ 564,599 | $ 563,614 | ||||
Net revenues | 654,540 | 606,521 | 1,937,672 | 1,899,836 | ||||
Cost of goods sold | 383,075 | 342,460 | 1,129,245 | 1,064,190 | ||||
Interest expense | (10,454) | (8,858) | (30,390) | (25,115) | ||||
Total before tax | 72,228 | 64,252 | 206,370 | 242,758 | ||||
Income taxes | (12,697) | (13,169) | (44,147) | (48,870) | ||||
Net income | 59,531 | $ 36,396 | $ 66,296 | 51,083 | $ 61,995 | $ 80,810 | 162,223 | 193,888 |
Reclassification Out of AOCL | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Net income | 9,000 | 3,836 | 22,014 | 6,514 | ||||
Reclassification Out of AOCL | Defined benefit pension plans: | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Selling, general and administrative expenses | 49 | (8) | 142 | (23) | ||||
Total before tax | 49 | (8) | 142 | (23) | ||||
Income taxes | (12) | 2 | (35) | 6 | ||||
Net income | 37 | (6) | 107 | (17) | ||||
Reclassification Out of AOCL | Gains (losses) on derivative financial instruments: | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Total before tax | 9,850 | 4,341 | 24,697 | 6,562 | ||||
Income taxes | (887) | (499) | (2,790) | (31) | ||||
Net income | 8,963 | 3,842 | 21,907 | 6,531 | ||||
Reclassification Out of AOCL | Gains (losses) on derivative financial instruments: | Foreign currency exchange contracts | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Net revenues | (37) | (401) | (270) | (794) | ||||
Cost of goods sold | 7,095 | 4,228 | 17,343 | 8,954 | ||||
Other expense, net | 128 | 168 | 424 | 67 | ||||
Reclassification Out of AOCL | Gains (losses) on derivative financial instruments: | Interest rate swap agreements | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Interest expense | $ 2,664 | $ 346 | $ 7,200 | $ (1,665) |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 21.40% | 20.10% |
Tax increase (reduction) due to discrete items | 2.40% | 0.70% |
Effective income tax rate without discrete items | 19% | 19.40% |
Increase in unrecognized tax benefits and associated interest | $ 0.8 | |
Net unrecognized tax benefits and interest, if recognized, would reduce the annual effective tax rate | 15.8 | |
Possible decrease in unrecognized income tax benefits | $ 2.5 |
EARNINGS PER SHARE - Schedule o
EARNINGS PER SHARE - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jul. 01, 2023 | Apr. 01, 2023 | Oct. 01, 2022 | Jul. 02, 2022 | Apr. 02, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | |
Earnings Per Share [Abstract] | ||||||||
Net income | $ 59,531 | $ 36,396 | $ 66,296 | $ 51,083 | $ 61,995 | $ 80,810 | $ 162,223 | $ 193,888 |
Basic weighted average shares outstanding (in shares) | 56,151 | 55,428 | 55,962 | 55,830 | ||||
Dilutive effect of stock-based awards (in shares) | 805 | 1,122 | 952 | 1,230 | ||||
Diluted weighted average shares outstanding (in shares) | 56,956 | 56,550 | 56,914 | 57,060 | ||||
Earnings per share: | ||||||||
Basic earnings per common share (in USD per share) | $ 1.06 | $ 0.92 | $ 2.90 | $ 3.47 | ||||
Diluted earnings per common share (in USD per share) | $ 1.05 | $ 0.90 | $ 2.85 | $ 3.40 |
EARNINGS PER SHARE - Additional
EARNINGS PER SHARE - Additional Information (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Stock options excluded from computation of earnings per share (in shares) | 0 | 0 | 0 | 0 |
Performance-based restricted stock units (PRSUs) | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Shares excluded from computation of earnings per share (in shares) | 600,000 | 400,000 | 600,000 | 300,000 |
LEASES (Details)
LEASES (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of lease liabilities - operating cash flows | $ 23,375 | $ 22,608 |
Right-of-use operating assets obtained in exchange for new operating leases - non-cash activity | $ 13,316 | $ 12,780 |
RESTRUCTURING - Additional Info
RESTRUCTURING - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Oct. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | Dec. 31, 2022 | |
Restructuring Cost and Reserve [Line Items] | |||||
Charges | $ 0 | $ 13,688 | $ 7,796 | $ 13,688 | |
Restructuring reserve | $ 2,244 | 2,244 | $ 10,695 | ||
Selling, general and administrative expenses | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Charges | 5,400 | ||||
Cost of goods sold | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Charges | $ 2,400 |
RESTRUCTURING - Components of R
RESTRUCTURING - Components of Restructuring Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | |
Restructuring and Related Activities [Abstract] | ||||
Severance and employee-related benefits | $ 0 | $ 13,688 | $ 6,614 | $ 13,688 |
Other | 0 | 0 | 1,182 | 0 |
Total restructuring charges | $ 0 | $ 13,688 | $ 7,796 | $ 13,688 |
RESTRUCTURING - Restructuring C
RESTRUCTURING - Restructuring Costs by Business Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | |
Restructuring Cost and Reserve [Line Items] | ||||
Charges | $ 0 | $ 13,688 | $ 7,796 | $ 13,688 |
Operating Segments | Wrangler | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges | 0 | 0 | 995 | 0 |
Operating Segments | Lee | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges | 0 | 0 | 187 | 0 |
Corporate and other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges | $ 0 | $ 13,688 | $ 6,614 | $ 13,688 |
RESTRUCTURING - Activity in Res
RESTRUCTURING - Activity in Restructuring (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Restructuring Reserve [Roll Forward] | |
Amounts recorded in accrued liabilities, beginning | $ 10,695 |
Charges | 6,614 |
Cash payments | (15,018) |
Adjustments to accruals | (266) |
Currency translation | 219 |
Amounts recorded in accrued liabilities. ending | $ 2,244 |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) | Oct. 26, 2023 $ / shares |
Subsequent Event | Dividend Declared | |
Subsequent Event [Line Items] | |
Dividends payable (in USD per share) | $ 0.50 |