What Happened:
Shares of clothing company Kontoor Brands (NYSE:KTB) fell 14.9% in the pre-market session after the company reported fourth-quarter results that missed analysts' revenue and EPS expectations. The topline growth continued to decline in absolute terms. The company called out the challenging U.S. wholesale environment as retailers were conservative with their inventory management due to uncertain consumer spending patterns. Similarly, its full-year revenue guidance missed. To improve its financial profile amidst a challenging demand landscape, the company introduced Project Jeanius, aimed at delivering between $50 million and $100 million in gross profit improvement and SG&A savings, with a portion to be reinvestment in growth projects. Overall, this was a mediocre quarter for Kontoor Brands.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Kontoor Brands? Access our full analysis report here, it's free.
What is the market telling us:
Kontoor Brands's shares are not very volatile than the market average and over the last year have had only 6 moves greater than 5%. Moves this big are very rare for Kontoor Brands and that is indicating to us that this news had a significant impact on the market's perception of the business.
Kontoor Brands is down 8.2% since the beginning of the year, and at $56.92 per share it is trading 10.5% below its 52-week high of $63.58 from December 2023. Investors who bought $1,000 worth of Kontoor Brands's shares at the IPO in May 2019 would now be looking at an investment worth $1,398.
Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefitting from the rise of AI, available to you FREE via this link.