Kontoor Brands, Inc. Annual report [Section 13 and 15(d), not S-K Item 405]

Annual report [Section 13 and 15(d), not S-K Item 405]

RESTRUCTURING

RESTRUCTURING

12 Months Ended

Jan. 03, 2026

Restructuring and Related Activities [Abstract]

Restructuring charges relate to costs associated with exit or disposal activities. In 2025, the Company incurred charges of $43.5 million primarily related to the decision to close a portion of our manufacturing facilities, resulting in severance and employee-related charges and asset impairments. The Company also incurred other restructuring charges related to business optimization activities related to Project Jeanius. In 2024, the Company incurred restructuring charges related to actions to streamline and transfer select production within our internal manufacturing network and other business optimization activities. In 2023, the Company took actions to drive efficiencies in our operations, which included reducing our global workforce and streamlining and transferring select production within our internal manufacturing network.

The following table presents the restructuring costs included in the Company's statements of operations:


	Year Ended December

(In thousands)	2025		2024		2023
Cost of goods sold	$	45,609	$	15,387	$	5,780
Selling, general and administrative expenses	8,678		1,801		5,689

Total	$	54,287	$	17,188	$	11,469

The following table presents the components of restructuring charges:


	Year Ended December

(In thousands)	2025		2024		2023
Severance and employee-related benefits	$	40,808	$	4,557	$	7,223
Asset impairments	4,722		3,603		3,064
Inventory write-downs	760		4,310		—

Other	7,997		4,718		1,182
Total restructuring charges	$	54,287	$	17,188	$	11,469

The following table presents the restructuring costs by business segment:


	Year Ended December

(In thousands)	2025		2024		2023
Wrangler	$	2,177	$	15,080	$	4,564
Lee	—		40		43
Corporate and other	52,110		2,068		6,862
Total	$	54,287	$	17,188	$	11,469

The following table presents activity in the restructuring accrual, primarily related to severance and employee-related benefits, for the years ended December 2025 and December 2024:



(In thousands)
Accrual at December 2023	$	827
Charges(a)	7,717
Cash payments	(6,323)
Adjustments to accruals	(318)
Currency translation	(8)
Accrual at December 2024	$	1,895
Charges(a)	46,493
Cash payments	(39,517)
Adjustments to accruals	(398)
Currency translation	43
Accrual at December 2025	$	8,516

(a) The Company also recorded approximately $7.8 million and $9.5 million of non-cash and other charges for 2025 and 2024, respectively.

Of the $8.5 million total restructuring accrual reported in the Company's balance sheet at December 2025, $8.3 million is expected to be paid out within the next 12 months and was classified within "accrued and other current liabilities," and the remaining $0.2 million was classified within "other liabilities." Of the $1.9 million total restructuring accrual reported in the Company's balance sheet at December 2024, $1.8 million was classified within "accrued and other current liabilities," and the remaining $0.1 million was classified within "other liabilities."