Executive Summary

Q3 2025 delivered mixed headlines: adjusted EPS beat while revenue missed consensus on shipment-timing shifts; full-year guidance was raised across revenue, gross margin, operating income, EPS, and cash flow . Q3 revenue was $853.2M (+27% YoY) and adjusted EPS was $1.44; reported EPS was $0.66 due to $58M of restructuring/integration costs .
Wrangler gained market share for the 14th straight quarter; Helly Hansen outperformed and contributed $0.03 to EPS; Lee declined on China inventory actions but launched a new equity campaign; management cited stronger gross margin expansion and operating efficiency as earnings drivers .
FY25 outlook moved to the high end for revenue ($3.09–$3.12B), with raised targets for adjusted GM (~~46.4%), adj. OI (~~$449M), adj. EPS (~~$5.50), and CFO (~~$400M); Q4 revenue guided to $970–$980M and Q4 adj. EPS to ~$1.64 .
Near-term stock catalysts: visible Q4 acceleration (shipment timing catch-up plus 53rd week), Helly’s stronger contribution and rising synergy line-of-sight, and faster deleveraging (planned $185M voluntary term loan payment in Q4; ~2.0x net leverage by YE) .

What Went Well and What Went Wrong

What Went Well
- Adjusted EPS beat and FY25 guidance raised: adj. EPS $1.44 vs consensus $1.396; FY25 adj. EPS to ~$5.50 (from ~$5.45) on stronger GM and Helly outperformance . “Our third quarter results exceeded expectations… Based on our stronger year-to-date performance… we are raising our full year outlook” — CEO Scott Baxter .
- Helly Hansen momentum: $193M revenue in Q3 with $0.03 EPS contribution; management now sees >$25M run-rate synergies in 2026; accelerating U.S. penetration and robust order books .
- Wrangler share gains and brand health: 14th consecutive quarter of share gains; women’s up ~20%; Western high-single-digit growth; digital strength .
What Went Wrong
- Top-line miss on timing and Lee/China actions: Q3 revenue $853.2M vs consensus $871.8M as wholesale shipments shifted to Q4; Lee global -8% YoY on proactive China inventory actions .
- Reported margins diluted by non-GAAP items and Helly mix: reported GM 41.3% (-340 bps YoY), adj. GM 45.8% (+80 bps); Helly diluted GM ~60 bps; reported EPS $0.66 due to ~$58M restructuring/integration costs .
- Tariffs and product costs a headwind: adj. GM ex-Helly +140 bps on Project Jeanius/mix/pricing, partially offset by increased product costs and recently enacted tariff increases; 2026 full-year unmitigated tariff headwind estimated at ~$135M (mitigation underway) .

Financial Results

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Millions)	$622.9	$658.3	$853.2
Adjusted Gross Margin %	47.7%	46.4%	45.8%
Adjusted Operating Margin %	15.4%	15.2%	14.3%
Diluted EPS (GAAP)	$0.76	$1.32	$0.66
Adjusted EPS	$1.20	$1.21	$1.44

Q3 vs Wall Street consensus (S&P Global):

Revenue: $853.2M vs $871.8M consensus* (miss by ~$18.6M, ~2.1%) .
EPS: $1.44 vs $1.396 consensus* (beat by ~$0.04, ~3%).
Values retrieved from S&P Global.

Q1–Q3 Actuals vs Consensus (S&P Global):

Metric	Q1 2025 Consensus*	Q1 2025 Actual	Q2 2025 Consensus*	Q2 2025 Actual	Q3 2025 Consensus*	Q3 2025 Actual
Revenue ($USD Millions)	626.3	622.9	633.7	658.3	871.8	853.2
EPS ($)	1.1636	1.20	0.828	1.21	1.3958	1.44
# of Estimates (Rev/EPS)	4 / 5	—	5 / 6	—	7 / 8	—
Values retrieved from S&P Global.

Segment breakdown (Q3):

Segment	Revenue Q3’24 ($M)	Revenue Q3’25 ($M)	YoY %	Segment Profit Q3’24 ($M)	Segment Profit Q3’25 ($M)
Wrangler	464.1	471.2	+2%	97.8	116.4
Lee	202.3	186.7	-8%	23.4	16.7
Helly Hansen	—	185.9	N/M	—	8.0
Other	3.7	9.3	+149%	0.2	(1.6)
Total	670.2	853.2	+27%	—	—

Channel KPIs (Q3 total company):

Channel	Q3’24 ($M)	Q3’25 ($M)	YoY %
U.S. Wholesale	482.6	500.6	+4%
International Wholesale	116.9	244.0	+109%
Direct-to-Consumer	70.8	108.6	+53%

Non-GAAP adjustments (Q3):

Adjustments included $38.1M facility closure + $0.4M production transfer in COGS, $7.6M business optimization in SG&A, and $12.0M acquisition/integration fees; total adjustments drove the delta between reported EPS $0.66 and adjusted $1.44 .

Guidance Changes

Metric	Period	Previous Guidance (Q2 8-K)	Current Guidance (Q3 8-K)	Change
Revenue	FY25	$3.09–$3.12B	High end of $3.09–$3.12B	Tightened to high end
Adjusted Gross Margin	FY25	~46.1%	~46.4%	Raised
Adjusted Operating Income	FY25	~$443M	~$449M	Raised
Adjusted EPS	FY25	~$5.45	~$5.50	Raised
Cash from Operations	FY25	>$375M	~ $400M	Raised
Capital Expenditures	FY25	~$40M	~$25M	Lowered
Effective Tax Rate	FY25	~21%	~21%	Maintained
Interest Expense	FY25	~ $50M	~ $50M	Maintained
Adjusted Other Expense	FY25	~ $11M	~ $11M	Maintained
Avg. Shares	FY25	~56M	~56M	Maintained
Helly Hansen Revenue	FY25	~$455M	~$460M	Raised
Q4 Revenue	Q4’25	—	$970–$980M	New
Q4 Adjusted EPS	Q4’25	—	~ $1.64	New
Dividend	Ongoing	$0.52/share Q2 declaration	$0.53/share (+2%) declared Oct 24	Increased
Voluntary Debt Repayments	FY25	—	$185M in Q4; $235M FY total	New detail

Earnings Call Themes & Trends

Topic	Q1 2025 (May)	Q2 2025 (Aug)	Q3 2025 (Nov)	Trend
Project Jeanius savings	GM tailwind; >$100M run-rate by 2026	Earlier-than-expected GM benefits; tracking to >$100M in 2026	~$50M gross savings embedded in 2025; scaling in 2026	Scaling per plan
Tariffs/macro	2025 unmitigated impact ≈ $50M incl. Helly; mitigation from Q3	Net 2025 EPS impact ~$0.20 after mitigation; Mexico exempt	2026 unmitigated ~ $135M; mitigation ongoing (pricing, sourcing)	Larger 2026 headwind; mitigating
Wrangler momentum	Female +40%, Western mid-teens; share gains	Continued growth; share gains; DTC strength	14th share gain quarter; female +20%, Western HSD	Strong
Lee turnaround	Repositioning underway	APAC actions; equity campaign planned Sep	China inventory actions; sequential improvement; campaign launched	Early green shoots, uneven
Helly Hansen	Acquisition cleared; plan to double margins	Raised FY rev to $455M; synergies >$20M	Q3 beat; ~$460M FY; >$25M synergies sight; U.S. expansion	Accelerating
Supply chain / inventory	Inventory -12% YoY	Ex-Helly inventory -1%; working capital unlock in 2026	Temporary build on facility closure/lead times/tariffs; Q4 down ~$120M	Normalizing Q4
Capital allocation	Pro forma leverage <3x; <2x in 12 months	Net leverage 2.5x; $25M repayment	Additional $185M Q4 paydown; ~2x by YE	Faster deleveraging

Management Commentary

“Our third quarter results exceeded expectations… Wrangler drove another quarter of broad-based growth… Helly Hansen delivered better than expected revenue and profitability… Based on our stronger year-to-date performance… we are raising our full year outlook” — Scott Baxter, CEO .
“Adjusted gross margin expanded 80 bps to 45.8%… Excluding Helly Hansen, adjusted gross margin expanded 140 bps, driven by Project Jeanius, mix, and targeted pricing, partially offset by increased product costs and the impact from recently enacted increases in tariffs” — CFO Joe Alkire .
“We now have line of sight to greater than $25 million of run-rate synergies [for Helly Hansen], which will begin to meaningfully impact profitability in 2026” — CFO Joe Alkire .
Inventory/transformation: “We closed our Torreón manufacturing facility… carried excess inventory to support the operational transition… expect about a $120 million reduction in Q4… overall quality and composition remain pleasing” — CFO Joe Alkire .

Q&A Highlights

Shipment timing and Q4 setup: Q3 growth impacted by shift of wholesale shipments into Q4; October organic growth was ~6% including the timing shift; Q4 organic growth embedded at ~6% including 53rd week, with conservative POS assumptions .
Helly acceleration and synergies: Growth broad-based across sport/workwear/regions; order books accelerating; >$25M run-rate synergies expected in 2026, with benefits starting now and scaling through 2026 .
Pricing elasticity and tariffs: Targeted price increases implemented mid-June/July with elasticity largely as expected; tariffs offset by pricing, sourcing optimization, supplier partnerships, and inventory management over 12–18 months .
Lee/China reset and path: Proactive inventory actions in China; distribution consolidation; majority of heavy lifting done; expect sequential improvement, with stabilization into late 2026 and then growth .
Balance sheet and deleveraging: Q3 voluntary $25M paydown; plan additional $185M in Q4; pro forma net leverage ~2.5x now, targeting ~2.0x by year-end; share repurchases paused near term .

Estimates Context

Q3 2025: EPS $1.44 beat $1.396 consensus*; revenue $853.2M missed $871.8M consensus* .
Q2 2025: EPS $1.21 beat $0.828 consensus*; revenue $658.3M beat $633.7M consensus* .
Q1 2025: EPS $1.20 beat $1.1636 consensus*; revenue $622.9M missed $626.3M consensus* .
Values retrieved from S&P Global.

Where estimates may adjust:

Raise FY25 EPS and gross margin assumptions modestly (management lifted both) .
Increase Helly FY25 revenue contribution and Q4 weighting; embed U.S. growth acceleration and 2026 synergy benefits (> $25M) .
Maintain conservative organic POS and wholesale inventory assumptions into Q4 per management tone .

Key Takeaways for Investors

FY25 raised across revenue, margins, EPS, and cash flow; Q4 guide implies a strong finish aided by shipment catch-up and a 53rd week .
Quality of beat: Adjusted EPS outperformed on mix/efficiency despite a modest revenue miss; non-GAAP charges (restructuring/integration) weighed on reported EPS .
Helly Hansen is a clear upside lever: accelerating growth, rising synergy line-of-sight (> $25M), and margin uplift into 2026; U.S. penetration is early .
Wrangler remains the growth/mix engine (female, Western, digital); Lee is stabilizing with a credible plan but remains a 2026 story .
Deleveraging should expand capital allocation optionality faster than expected (target ~2.0x by YE); buybacks paused near-term but $215M authorization remains .
Tariffs remain a 2026 swing factor (~$135M unmitigated), but the company has clear mitigation levers (pricing, sourcing, supplier programs, Project Jeanius) .
Brand building and partnerships (e.g., Filson x Wrangler, CAPX headwear licensing) support premium mix and DTC momentum into holiday and 2026 .

Additional references

Dividend increase to $0.53/share (payable Dec 18, 2025) .
Disaggregated revenue by brand/channel/region and segment profits for Q3 included in 8-K exhibit .

S&P Global disclaimer: All consensus estimate figures marked with an asterisk (*) are values retrieved from S&P Global.

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