you, morning, and Scott, everyone. good Thank
let outline a the balance lot to the have morning, so We cover of call. me this
the I financial resilience impacts accelerated walk our unfolded our First, through to address Covid-XX will as business. how our across actions of
will as issues. employee, of top we these actions implications our cover are Specifically, and liquidity and financing know we mind
we Next, results, will impacts first possible will from where review highlight we Covid-XX. our quarter direct
this provide although of uncertain thoughts will balance guidance year. be given operating shaping will environment, the providing Finally, not the we time on we at the
began begin emerge outlined priority reviewed As quickly response we earlier. liquidity before and our around turned as support financing. our safety associates these employees, addressing our the And with health of to and Scott was world. Covid-XX to we the to actions, After
additional actions reductions execute funding March, revolving we begin strengthen from In we near-term announced operating down near-term liquidity align and expense position we as adjust this drawn took financial cash and better increase production no had our to that capital action precautionary working million $XXX our credit to facility. capital. immediate secured, to for flexibility, near-term measure, We and supply provide temporary regret demand. With and a
to demand times operating paramount which Next, strong provide discussed liquidity of model, adequate note, uncertain spin, have are to for cash since projected operating our the incredibly we under in of various generation environment, we given aspects the nature times. important many modeled the of importance an we challenging XXXX The scenarios flexibility.
history, with years Our XXX two storms, compelling brands uncertain our brands, critical an iconic continue believe weathered have to of over and offer environment. we the in are many trusted value of
completion proactively period in credit facility this and we efforts covenant announce we of Accordingly, including potential amend under a a we Under the forecast for advance the future Based accelerated did promotional prolonged Covid-XX morning. our challenges covenant began these scenario within heightened XXXX, actions potential scenarios, upon leverage also the ratio original our facility. successful in of closures in credit facility. any our evaluated the issues, to door environment, well
the dividends, certain on Two, are the one, the criteria XXXX, in of if are And and of met. elements release of Key payments, dividend for net leverage with certain payments quarter a of the future permitted end amendment periods quarters the if including suspension liquidity covenant focus met. with after three, of our second restricted to include, or third ratio. XXXX minimum criteria requirements earlier quarter third second
details on X-K was filed additional amendment. the with morning this An
amended of mentioned, suspended with Scott credit has of dividend. a Board our conjunction in temporarily As payment the facility, Directors our
of appropriate outside that believe the the it assure to operating want flexibility services. addition operating was through critical expenditure action. I from and to non-business In we the continue capital some to you the travel Scott and to but reductions, affords, of we prototypes to walked to all challenge amendment expenses, samples meetings,
encouraged and our around thoughts to improve on we streamline and doing As have the of how world process and engaged rethink part their operations. business traditional we this our share associates norms can of
a leveraged reimagined activities. couple share have we and examples business me of Let key where technology
China in WeChat marketing we and included with meeting our assets, first held online First, virtual through supports. product that our XXxX dealers highlights
format, And shifted campaigns US, a new software. sessions, design we’ve virtual globally products, sales all enabled finally, Next, workshops, practices to the best and meeting by marketing collaboration prototype we and shared. where are conducted virtual in
how are the this of streamlining additional Pennsylvania, In as the This we taken and also since we rethinking difficult Greensborough, North thank want headquarters and to from to their announcing reality, we was to have in continuing, week, to work dedication done our are opportunities. our new consolidation explore our Carolina. cost saving addition we for Reading Outlet lightly, This and VF Headquarters, associates commitment. not corporate we decision Reading, spin-off, in
of be transition future actions define We by next XXXX, the over will structure, and further plans. months, will operations few anticipate our and end the completed the we
investment to our key implementation our but to, mentioned enhancements we the including, earlier. ERP global strategic focused on committed streamlining operations, not and initiatives limited Although, remain we behind Scott are continued digital
inventory of know I as is chain, interest. supply our address to a like I’d Finally, topic
a particularly remains inventory respect advantage, chain to with supply competitive Our management.
which over and landscape, creation and restrictions one and us permit. of impacts, flow our demand production, represents manufacturing, providing governmental of the supply avoid allows to inventory, just as support meet the this minimize reduce third while we agility light vertically volume our balances wins in demand production in of As integrated new decreased requirements, program dynamic minimize cash excess to
actively working are the We delays. to minimize also globe around and our partners supply with inventory service
While select reduces source not our network chain. our material customers chain of risk. with in in interruptions and countries we Today, place, internally diversified product continue experienced to have supply have restrictions operating our manufactured supply
our get first to will be let's adjusted stated, basis. an review. Now otherwise Unless results quarter on
modified our to give be is as performance times, we the unprecedented to context during important additional how quarter. evolved that will review the believe Given revenue detail to provide
Although to of are not and Covid-XX will it therefore is within sharing step by further the to not possible the is we light breakdown for the and environment so this delineate this meaningful in perspective review. clearly take do impact believe quarter. it We attempting unusual
the Global decreased revenue in currency revenues one point for basis a decline. same of the adjusted Headwinds quarter, XX% XXXX. first from compared with reported quarter foreign the on in represented
As that then call, from to do approximately accelerated and sales began well began compared as and the to digits sales performance range ongoing in in also on On planned mid-single the our quality moves in are our this expected initiatives, right they impact was quality by March, a sales of prior talked pandemic where improve was our China, long-term in of prior actions XXXX the last declined year. XX% operating environment. The in declined year pronounced. clearly decline business. actions decline driven compared restructuring of right the one thing revenue lines as XXXX global that as dilutive proving we of February select about high efforts third most of to In the quality year-to-date Covid-XX basis, with revenue the global to of
of as in in to These certain quarter exit other our March the including down first declines initiatives the and model were US global a On lower lines Coupled as of and revenue business regional revenues underperforming lower and actions these in single high revenue changes impact select of digit revenue points range distribution such expectations. and declined quality channels India. Through low consistent with XX% declined sales the in mid the digit diluted planned given business margin pressured February sales, basis in single reduced anticipated Covid for XX%. country distress taken the actions. range. outside with included of sales actions range quarter,
mid largest in XX%. These partially placing by of retail estimate digital receiving online partners with us lower approximately digital increasing brick-and-mortar In albeit open digital sales and we X%. North by down our open our the declined lower volume American declines XXXX The were our XX% constant and XX% increased the represented increasing shipments least volumes. year in are hours. offset performance orders US, Today Outside digit of revenues wholesale quarter. growth revenue January of dotcom Despite most are remain are reduced that in currency. single our international volumes, prior at US upon customers range. with based versus of sales at Breaking International XX% in revenue month the
were fully February Covid-XX in China, As realized effects the XX% from more international in range. declined revenue
in Finally, continued we're effects decline range. the March China in fully international pandemic XX% Europe more from and revenue other as high realized and the in markets, the
our Scott has the growth in continues have recovery performance. make and and continued to wholesale As Digital stores April. partner with improving experiencing lead in week-on-week all March reopened and progress And way comp April. mentioned, owned both are to positive China
quarter decline exits sales the currency, revenue first business and actions planned international Beyond combined pressured which the of international and digits. high was single affected by changes, impact, Covid-XX by foreign quality model
our which impacts. to revenue revenue by primarily The channels, was Turning in reported was Covid-XX our our down wholesale a of briefly decline US represented XX% channel XX%. our driven
bright standing US a a This spot we’ve with partnerships important and As made digital into wholesale platforms long leading this mentioned, digital XX%. increasing of wholesale the reflection performance area. investment, is remains
of XX% brick-and-mortar large the revenues, represented owned closures. which channel declined XX%, door consumer in part our due to direct branded Our
the by in digital increased business X% US. owned driven Our X% growth
Covid-XX far have been reaching. While the impacts of
positive We from results see our in investments platform. continue digital our to
ecosystem. system our our The will implementation significant developing ERP global digital be of a in enabler
this investments to accretive under-indexed nature will this to in restore of area. we grow the channel, continue Given
from revenue XX%, period. Global declined the of And of the our declined US Wrangler XX% US headwind brands. drivers or of in Wrangler including Covid-XX of our sales. currency. foreign programs The one from reductions select to lower non-core brand revenue exit the planned were primary impacts decline. point turn the distressed let’s Finally, planned
in driven impacts. offset owned These quarter Wrangler actions partially during in Covid-XX the growth by and reported wholesale. by both business declines digital The revenue down were international taken was India and XX% model point Europe. revenue changes include foreign driven Lee in from Lee US impacts declined mentioned transformational brand XX% decreased a of by Covid-XX previously and the headwind global the revenue currency. X% factors.
down by Lee We business up of much and mentioned of underlying the decline including as the Through the February wins. a by half remain Lee placed was down encouraged on our with the progress program March. revenue the new high-single was US driven from international previously majority FX. locked Nearly country was Lee China business, February, XX% was for the of US digits. point
Now following on XX%. by driven margin to to The gross margin, the was total decreased factors. decline adjusted basis gross primarily points XXX
rates, a of based distressed provisions, quarter. levels excess basis upon in point represented goods higher the recovery lower and inventory XXX First and anticipated headwind
lower revenue by XXX China geographic impacted adversely basis by mix lead points. also Next, international
Finally, reduced manage inventory, our of demand basis in supply and to cost a XX as point in the represented downtime the we quarter. tightly production and plans headwind align
an we proactive discussed drivers. than TSR have accretive the These of mix as underlying offset and declines, and part measures model our business more shifts important structurally
mix, by impacted pricing initiatives, well points. margin During the first cost improving as quality product channel basis XXX as gross improvements favorable of and quarter, sales the positively of and impacts restricting
losses to a by to control restructuring $X.XX offset revenue delivered due by primarily XX.X%. year-over-year were increase of as first of percent and increases to per driven fixed earnings credit declines. increased We SG&A basis Adjust expense sales share XXX adjusted due for points benefits. increased deleverage the These allowances partially and cost tight was The quarter. Covid-XX in
quarter turning balance in cash million increase $XXX to cash sheet cash equivalents, from year-end. which ended million our the We and and a was with $XXX flow. Now
drew we period drove million mentioned, during revolver the on a which increase. As the $XXX
by decrease the working ERP infrastructure global to million was our cash IT the $XXX March capital, of driven half in and capital. and XXth. due decreased on Excluding dividend revolver the working payment investments Approximately period
want additional So context I provide here. little to a
historically has our Our business experienced needs. capital seasonality working and
balances shipments to and to international occur. to moderates in have for of the holiday to due quarter as be higher be we tend for in capital elevated during largest quarter shipments prepare AR tend in fourth source to of third fourth as quarter and quarter product part the Further the while largest quarter the tends third inventory Specifically, Thus working shipments tends are year introduced. new our in and the first the peak of first seasons third we capital. the uses the as working US
In quarter a the to XXXX. quarter first use working first compared $XX million was the of million XXXX, of use capital $XX our of in
shaping year. some with close the of will I balance for Finally, the
our fourth and call Covid-XX, our XXXX guidance As we on outlook we quarter uncertainty previously announced caused by in March be at this an and time. as a result of provided providing will the and updated significant not impacts business withdrawn
additional the operating While income quarter to anticipate impacts most XXXX. revenue, to be are we're We take will are on continuing Covid-XX the and believe and not a steps pronounced second in prolonged providing environment. EPS perspective we negative as formal assumptions follows. guidance proactive We necessary of accommodate
impact the of half As we second guiding have XXXX, think are we Covid-XX our results. about not the on will
However, a cost increasing we to sales and the moderating expected savings of actions quality underlying restructuring, actions taken accretive and gross that new half in from top-line in of gains, our as highlight distribution revenue XXXX in anniversary and are outside and in second taken benefit realization headwinds of Covid-XX margins would and do anticipate programs XXXX.
to actions a stress Finally provide we the have variety And testing believe due for taken to scenarios of predictions and of financial operating prolonged economic flexibility. performed requirements liquidity XXXX. support during downturn, demand are a expected
walk today's been taken. we since appreciate many much to opportunity cover it have over Although and on through little call the has our we earnings, XX a last days had only actions to the
and In closing, continued I our right for prepared environment. success position confident turn we the the concludes this just Operator? back these remarks in want are at I new call to operator. steps to will now to This time reinforce Kontoor how are that our
