Executive Summary

Q2 2025 was a beat on both revenue and adjusted EPS versus consensus; revenue was $658.3M (+8% y/y; +4% organic) vs $633.7M consensus, and adjusted EPS was $1.21 vs $0.83 consensus; management raised FY revenue/EPS and cash flow guidance . Consensus values marked with an asterisk; Values retrieved from S&P Global.
Wrangler delivered 7% y/y growth (U.S. +9%, digital +18%), while Lee declined 6% y/y but showed sequential improvement; Helly Hansen contributed $29M in June and outperformed internal expectations .
FY 2025 outlook raised: revenue $3.09–$3.12B (prior $3.06–$3.09B), adjusted gross margin ~46.1%, adjusted operating income ~$443M, adjusted EPS ~$5.45, and cash from operations >$375M; Q3 revenue guided to ~$855M and adjusted EPS ~$1.35 .
Tariffs: Outlook now includes net impacts (approx. 50 bps GM headwind; ~$15M OP hit), with mitigation actions underway; Mexico imports remain exempt under USMCA; management remains confident of substantial offset within 12–18 months .

What Went Well and What Went Wrong

What Went Well

Wrangler momentum: Global revenue +7% y/y, U.S. up 9%, direct-to-consumer +16% (digital +18%); management cited “thirteenth consecutive quarter of market share gains” and strong Western and women’s categories .
Margin expansion: Adjusted gross margin 46.4% (+120 bps y/y; +20 bps accretive from Helly Hansen), adjusted operating margin 15.2% (+210 bps y/y) driven by Project Jeanius, lower product costs, and DTC mix .
FY guidance raised and Q3 outlook constructive: FY revenue/EPS/cash flow raised; Q3 revenue ~$855M and adjusted EPS ~$1.35, with Helly breakeven net of acquisition-related interest .

What Went Wrong

Lee weakness: Global revenue -6% y/y (U.S. -5%, international -6%); wholesale pressured, APAC actions to reset distribution will weigh near-term .
SG&A stepped up: Adjusted SG&A +24% y/y guidance (prior ~20%) reflecting Helly consolidation and incremental demand creation ($15M) .
Tariff headwinds: FY includes ~50 bps adjusted GM impact, ~$15M net OP impact; management highlighted dynamic policy and mitigation timing lag into late 2025/early 2026 .

Financial Results

Consolidated P&L (GAAP and Adjusted)

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$699.3	$622.9	$658.3
Gross Margin % (Reported)	43.7%	47.5%	46.3%
Gross Margin % (Adjusted)	44.7%	47.7%	46.4%
Adjusted Operating Income ($USD Millions)	$101.3	$96.1	$100.0
Adjusted Operating Margin %	14.5%	15.4%	15.2%
Adjusted SG&A as % of Revenue	30.2%	32.2%	31.3%
Diluted EPS (GAAP)	$1.14	$0.76	$1.32
Adjusted EPS	$1.38	$1.20	$1.21

Segment Revenues and Profit

Segment	Q2 2024 Revenue ($USD M)	Q1 2025 Revenue ($USD M)	Q2 2025 Revenue ($USD M)
Wrangler	$429.2	$420.2	$461.3
Lee	$175.3	$199.9	$165.6
Helly Hansen	—	—	$26.7
Other	$2.4	$2.8	$4.7

Segment Profit (Loss)	Q2 2024 ($USD M)	Q1 2025 ($USD M)	Q2 2025 ($USD M)
Wrangler	$88.3	$86.8	$108.1
Lee	$13.4	$32.4	$12.4
Helly Hansen	—	—	$(4.8)

Disaggregation (Q2 2025 Highlights)

Channel: U.S. Wholesale $477.9M, International Wholesale $93.3M, DTC $87.1M .
Geography: U.S. $529.4M, International $128.9M .

KPIs and Balance Sheet

KPI	Q2 2025
Cash & Cash Equivalents ($USD M)	$107.5
Long-term Debt ($USD M)	$1,366.5
Inventory ($USD M)	$685.5 (ex-Helly: $482.0, -1% y/y)
Revolver Availability ($USD M)	$494 (undrawn)
Diluted Shares (WASO) (000s)	55,975
Pro forma Net Leverage (x)	~2.5x
Adjusted ROIC (TTM)	22.0%
Dividend per Share	$0.52 (declared)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	$3.06–$3.09B	$3.09–$3.12B	Raised
Adjusted Gross Margin	FY 2025	45.9–46.1%	~46.1% (incl. ~50 bps tariff impact)	Maintained high end; added tariff impact
Adjusted SG&A	FY 2025	~+20% y/y	~+24% y/y (incl. ~$15M demand creation)	Raised
Adjusted Operating Income	FY 2025	$437–$445M	~$443M (incl. ~$30M tariffs/investments)	Maintained midpoint
Adjusted EPS	FY 2025	$5.40–$5.50	~$5.45 (incl. ~$0.40 tariffs/investments; ~$0.20 Helly benefit)	Maintained midpoint with composition update
Cash from Operations	FY 2025	>$350M	>$375M	Raised
Capital Expenditures	FY 2025	~$45M	~$40M	Lowered
Effective Tax Rate	FY 2025	~20%	~21%	Raised
Interest Expense	FY 2025	~$50M	~$50M	Maintained
Adjusted Other Expense	FY 2025	~$11M	~$11M	Maintained
Avg. Shares Outstanding	FY 2025	~56M	~56M	Maintained
Revenue	Q3 2025	—	~$855M	New disclosure
Adjusted Gross Margin	Q3 2025	—	~45.5% (+50 bps y/y)	New disclosure
Adjusted EPS	Q3 2025	—	~$1.35 (Helly breakeven net of interest)	New disclosure

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024)	Previous Mentions (Q1 2025)	Current Period (Q2 2025)	Trend
Project Jeanius savings & execution	Raised run-rate target >$100M; 2025 gross margin +10–20 bps; SG&A savings ~$20M	Early benefits aiding gross margin; SKU rationalization; 20% SKU reduction in U.S.	Driving adjusted GM expansion; earlier-than-expected benefits	Improving
Tariffs & mitigation	Unmitigated ~$50M scenario; mitigation to largely offset within 12–18 months	Unmitigated impact revised (KTB ~$35M; Helly ~$15M); Mexico exempt under USMCA	FY includes ~50 bps GM hit; net OP impact ~$15M; assume 30% CN, 20% others; Mexico exempt	Stabilizing with clearer mitigation
Helly Hansen integration & growth	Accretion in H2’25 (~$0.15), strong outdoor/workwear seasonality	Accretion outlook increased; freight cost synergies; margin doubling over time	June revenue $29M; stronger-than-expected contribution; breakeven in Q3 net of interest; synergies >$20M line of sight	Accelerating
Wrangler momentum (women/Western/DTC)	9% Q4 growth; 11th consecutive share gain; female up 19% Q4	Female +40% Q1; Western mid-teens; share +70 bps	Global +7%; U.S. +9%; DTC +16% (digital +18%); continued share gains	Strong/consistent
Lee turnaround	Strategy reset; DTC double-digit growth, club exit impact	DTC +8%; U.S. digital +12%; brand equity campaign planned	Global -6% but sequential improvement; APAC distribution actions; equity campaign in Sept.	Mixed but improving
Capital allocation & leverage	Net leverage ~1.0x; pause buybacks; dividend maintained	Pro forma leverage <3x post-deal; under 2x in 12 months; dividend maintained	Pro forma ~2.5x; plan to ~2x by year-end; $215M buyback authorization remains	Improving

Management Commentary

“Our strong second quarter results were driven by better-than-expected organic revenue growth, gross margin expansion, operating efficiency and cash generation, as well as a stronger-than-expected contribution from Helly Hansen.” — Scott Baxter, CEO .
“Adjusted gross margin expanded 120 basis points to 46.4%, driven by the benefits of Project Jeanius, lower input costs and mix. Helly Hansen was accretive by about 20 basis points.” — Joe Alkire, CFO .
“We now have line of sight to greater than $20 million of synergies… not included in our outlook at this point.” — Joe Alkire, CFO .
“Wrangler drove its thirteenth consecutive quarter of market share gains… we gained 70 basis points of market share.” — Scott Baxter, CEO .

Q&A Highlights

Helly Hansen accretion and run-rate: H2 implied ~$0.32 accretion despite acquisition interest drag; long-term margin doubling target reiterated .
Tariff impact quantification: FY net OP impact ~$15M after mitigation; prior unmitigated $50M adjusted to reflect Mexico exemption and higher reciprocal rates .
Lee distribution/APAC actions: Re-establishing China foundation; U.S. mid-tier repositioning; brand equity campaign in September to support turnaround .
Q3 Helly revenue contribution: ~$175M implied; seasonality weighted to Q4; timing shift to July noted .
Pricing and retailer inventory: Pricing actions accepted; POS improved into May/June/July; continued cautious retail inventory assumptions .

Estimates Context

Metric	Consensus (Q2 2025)	Actual (Q2 2025)
Revenue ($USD Millions)	$633.7M*	$658.3M
Adjusted EPS ($USD)	$0.83*	$1.21

Consensus values marked with an asterisk. Values retrieved from S&P Global.

Forward consensus snapshots:

Q3 2025: Revenue $871.8M*, EPS $1.40*; Actuals: revenue $853.2M, EPS $1.44 (post quarter) [GetEstimates] (Values retrieved from S&P Global).
Q4 2025: Revenue $975.1M*, EPS $1.65* [GetEstimates] (Values retrieved from S&P Global).

Key Takeaways for Investors

FY guidance raised despite tariff headwinds; higher revenue and cash flow (> $375M) with adjusted EPS ~$5.45 and GM ~46.1% indicate resilient fundamentals and effective mitigation .
Wrangler’s sustained momentum (women, Western, digital) continues to drive organic growth and market share, a key underpin to H2 performance and 2026 trajectory .
Helly Hansen is outperforming early, with stronger June, breakeven in Q3 net of interest, and synergy visibility >$20M not yet in guidance—upside lever as integration scales .
Lee remains a transition story in 2025; watch for September brand campaign and APAC/U.S. distribution resets to translate into improved mix and DTC growth .
Project Jeanius is contributing earlier-than-planned margin benefits; additional savings ramp into late 2025 and 2026 support both investment and profit expansion .
Balance sheet and liquidity healthy post-acquisition; plan to ~2x net leverage by year-end, maintaining dividend and preserving buyback optionality as leverage normalizes .
Near-term trading: Positive setup around Q3 guide ($855M, $1.35 EPS) and integration updates; sensitivity to tariff headlines persists but mitigation breadth (pricing, sourcing shifts) reduces downside risk .

Notes:
- All per-share amounts are diluted.
- Adjusted/non-GAAP definitions and reconciliations are provided in company supplemental materials.

Citations: Press release and 8-K Q2 2025: . Earnings call Q2 2025: . Prior quarter materials (Q1 2025): . Q4 2024 reference: . Dividend PR: .

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