Kontoor Brands, Inc.

Greetings and welcome to the Contour Brands Q3 2025 Earnings Conference Call and Webcast. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. You may be placed into question queue at any time by pressing star one on your telephone keypad. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to introduce your host, Michael Karapetian, Vice President, Corporate Development Strategy and Investor Relations. Michael, please go ahead.

Thank you, Operator, and welcome to Contour Brand's third quarter 2025 earnings conference call. Participants on today's call will make forward-looking statements. These statements are based on current expectations and are subject to uncertainties that could cause actual results to materially differ. These uncertainties are detailed in documents filed with the SEC. We urge you to read our risk factors, cautionary language, and other disclosures contained in those reports. Amounts referred to on today's call will often be on an adjusted dollar basis, which we clearly defined in the news release that was issued earlier this morning and is available on our website at contourbrands.com. Reconciliations of gap measures to adjusted amounts can be found in the supplemental financial tables included in today's news release. These tables identify and quantify excluded items and provide management's view of why this information is useful to investors. Unless otherwise noted, amounts referred to on this call will be in constant currency, which exclude the translation impact of changes in foreign currency exchange rates. Joining me on today's call are Contour Brands President, Chief Executive Officer and Chairman Scott Baxter, and Chief Financial Officer and Global Head of Operations Joe Alkire. Following our prepared remarks, we will open the call for questions. Scott?

Thanks, Mike, and thank you all for joining us today. Our third quarter results highlight the power of our expanded brand portfolio. Helly Hansen grew double digits, Wrangler gained market share for the 14th consecutive quarter, and we launched Lee's first equity campaign in years while taking proactive steps to improve the health of the marketplace. While a timing shift impacted growth in the quarter, stronger gross margin expansion, and disciplined expense management drove better-than-expected earnings. Based on our year-to-date performance and improving profitability, we are raising our full-year outlook. While the environment remains dynamic, we are well-positioned to finish the year strong and enter 26 with momentum. Now let's review highlights from Q3, starting with Helly Hansen. Third quarter results exceeded expectations, with revenue growth of 11% and $0.03 of earnings accretion. Growth was broad-based across both sport and workwear in all regions. The business is performing at a high level, the integration is progressing well, and we continue to uncover new opportunities to create significant value together. To build on this momentum, we are focused on our strategic pillars. First, accelerate growth. It starts with product. Our iconic platforms, including Crew, Alpha Legendary, and Leafa Merino continue to differentiate Heli in the marketplace and generate strong demand from our consumers. And our latest product launches have made 25 a record year. We won six Red Dot Design Awards, our most ever in a single year. Award-winning products include the Odin Ultimate Infinity Jacket, Arctic Patrol Down Parka, and within workwear, the Magni Evolution Jacket. These are scalable platforms that we will drive global growth, and nowhere is that opportunity greater than in the U.S. We see significant room to grow through a combination of new distribution, D2C growth, and investments in demand creation to increase brand awareness. Currently, awareness in the U.S. is only 29%. This has grown by six points since 2019, while revenue has more than doubled. Starting next year, we will be making investments in top funnel demand creation to increase awareness and fuel accelerated growth. Within workwear, there are considerable market share opportunities leveraging Heli's unique dual brand position. The connection to technical outdoor products worn by professionals on the mountain or water has made Heli a leader in pro-grade workwear in Europe. In the U.S., we are leading with footwear in regions where Heli sport penetration is greatest. Over time, this will expand to include the broader apparel assortment, supported by further development of our lightweight and cooling platforms to drive growth in warmer climates. Outside the U.S., we see opportunities entering new markets in Asia and increasing penetration in key markets within Europe, including Germany, Austria, and Switzerland. In addition, we will continue to support our business in China, which we operate through a joint venture. China is on track for over 70% growth this year. And second, double operating margin. We expect to increase operating margin from high single digits today to mid-teens through a combination of gross margin expansion and SG&A benefits. We are leveraging our global operating model, supply chain and technology platforms, as well as Project Genius. This will create greater back-end efficiency and increased investment capacity to support our growth initiatives. Heli is headed into the fourth quarter with incredible momentum, and I could not be more confident in the opportunities ahead. Turning to Wrangler, global revenue increased 1%, including 12% growth in digital. Wholesale growth was impacted by a timing shift into the fourth quarter. Excluding this shift, global revenue increased at a mid-single-digit rate. The third quarter marked Wrangler's 14th consecutive quarter of share gains, according to Cercana. In our core men's and women's bottoms business, we gained 80 basis points of market share. Our female business had another strong quarter, with growth of 20%. Our collaboration with Laney Wilson continues to exceed expectations. Her latest collection is performing very well while supporting more premium AURs and increased penetration with younger consumers. And Bespoke is now the number one female style at select specialty retailers. This has been a banner year for our female business, and we expect double digit growth for the year. Western grew high single digits in the quarter. As the number one Western apparel brand, we have never been stronger. At the upcoming Wrangler National Finals Rodeo in Las Vegas, we will be represented by some of the top athletes in the world, as well as host events at the annual Cowboy Christmas, where the Western world converges to showcase the best of Western apparel. In addition, Wrangler Country Music stars Lainey Wilson and Cody Johnson will perform sold-out shows. Western is on track for double-digit growth this year. To support this momentum, we will continue to invest behind our demand creation platforms, including live sports, streaming and social media. In particular, our highly successful Good Mornings Make for Better Days campaign will continue through the balance of the year as we build momentum for the holidays and 26. Turning to Li, revenue declined 9% as we took proactive steps to improve the health of the marketplace in China. Excluding these actions, revenue declined 4%. We are encouraged by the progress we are making against our brand realignment. Digital is leading the way with growth of 15% in the U.S., As we previewed last quarter, we launched our Built Likely equity campaign in September, the first of this scale in years. While early days, we are encouraged by the reaction in the marketplace and have seen improvements in both brand equity and perception. We are also making progress in aligning products to our refreshed brand position. In addition to activating our iconic platforms, we are seeing success with new introductions such as Velocity Pant and collaborations with Crayola and Buck Mason. Crayola will be Lee's strongest collaboration ever, and our second collaboration with Buck Mason is outperforming the initial launch. Importantly, our 2025 CoLabs are attracting three times more millennial purchasers. While the Lee turnaround will not be linear, we will do this the right way. We expect sequential improvement in the fourth quarter. Finally, we announced this morning we made an additional $25 million voluntary debt repayment in the third quarter, and we expect to further reduce debt by $185 million in Q4. We are tracking ahead of our deleverage plan and expect to return to approximately two times by year-end while consolidating a significant increase in earnings and cash flow. Deleverage is our near-term priority, but we will take an offensive posture to deploy our cash generation to support our capital allocation framework, including our dividend and share repurchase programs. Before turning it over to Joe, let me reiterate the confidence we have in achieving our 25 plan. Our expanded brand portfolio provides significant opportunities to create value through strong fundamentals and increasing capital allocation optionality. And while the environment remains uncertain, we are being proactive with initiatives such as Project Genius to offset headwinds in the marketplace. We are executing at a high level, and I am confident we are on a path to drive strong value for shareholders. Joe?