The owner of Lee and Wrangler jeans just went public and its shares are falling 7%

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  • Kontoor Brands, the owner of Lee and Wrangler jeans, debuted on the New York Stock Exchange on Thursday.
  • Shares in the spin off from VF Corp fell more than 7% on the first day of trading.
  • VF Corp’s Vans, North Face, and Timberland brands have outperformed its jeans labels.
  • Watch VF Corp and Kontoor Brands trade live.


Kontoor Brands, the owner of Lee and Wrangler jeans, debuted on the New York Stock Exchange on Thursday. In sharp contrast to Levi’s stock, which surged more than 30% on debut, shares in the VF Corp spin off plunged more than 7% on their first day of trading.

Investors’ lack of enthusiasm may not be surprising. VF  Corp separated its jeans labels — Lee, Wrangler, and Rock & Republic — into a separate company with the goal of “protecting and enabling the explosive growth in Vans, shepherding the positive momentum of The North Face, and focusing on reenergizing growth in Timberland North America,” said CEO Stephen Rendle on VF Corp’s fourth-quarter earnings call.

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VF Corp’s figures for the year to March 30 don’t directly translate to Kontoor, but they provide some indication of the relative health of the two companies’ brands. Wrangler sales inched up 1% at constant currency, while Lee sales slumped 5%, according to VF Corp’s ful-year earnings report. The three main brands staying with VF Corp performed better: Vans revenue surged 26%, North Face revenue jumped 10%, and Timberland sales rose 2% at constant currency.

As a result, underlying sales in VF Corp’s jeans business fell 2% to about $2.5 billion last fiscal year. In contrast, underlying revenue grew at least 5% in the group’s outdoor and work segments, 11% in its “other” division, and 19% in its active segment. Similarly, constant-currency profits plunged 28% to around $286 million in the jeans business, but rose 9% in the outdoor segment, and surged more than 25% in the active and work divisions. 

VF Corp and Kontoor have starkly different growth goals. VF Corp expects to increase constant-currency revenue by 6% to 7% and EPS by 17% to 19% this fiscal year. Kontoor is targeting sales growth of 1% to 2% and margin expansion of 2% to 3% in the coming years.

“The histories of VF Corporation and Kontoor Brands are woven together in the rich denim history of North Carolina,” Rendle said on the call. Given the gulf in the health of their brands, though, the pair face very different futures.

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