Shares of Kontoor Brands, Inc. (KTB), the parent company of apparel brands Lee and Wrangler, plummeted by over 5% on November 1st after Stifel downgraded the stock and the company reported mixed third quarter earnings results.
The selloff was largely driven by Stifel's decision to lower its rating on KTB from "Buy" to "Hold" and reduce its price target from $89 to $93. In a note to clients, the firm cited concerns over KTB's slowing revenue growth and rising costs pressuring profit margins.
Adding to the negative sentiment, KTB's Q3 earnings report showed revenue growth of just 2.4% year-over-year to $670.19 million, missing analysts' consensus estimate of $663.54 million. While the company beat on earnings per share at $1.37 versus the expected $1.26, the tepid top-line performance likely raised worries about future growth prospects.
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