Supplemental Financial Information (Form 8-K)

As previously disclosed, Kontoor Brands, Inc. (the "Company") entered into a Stock Purchase Agreement (the "Purchase Agreement"), on May 20, 2026, with ABG-Storm LLC, a Delaware limited liability company, an affiliate of Authentic Brands Group ("Buyer") and The H.D. Lee Company, Inc., a Delaware corporation, a wholly-owned subsidiary of the Company ("Lee"). Pursuant to the terms and subject to the conditions set forth in the Purchase Agreement, the Company has agreed to sell to Buyer all of the outstanding shares of capital stock of Lee at closing.

During the Company's first quarter of fiscal 2026, the Company determined that the Lee business met held-for-sale and discontinued operations accounting criteria. Accordingly, the assets and liabilities of the Lee business were reported as held-for-sale in the balance sheets in the Company's first quarter Form 10-Q. Additionally, the Company reported the Lee business as discontinued operations in its statements of operations and statements of cash flows.

The unaudited supplemental financial information provided below presents the Company's condensed consolidated financial information for and as of, as applicable, each of the four quarters in fiscal 2025 and the full year of fiscal 2025, as recast to present the Lee business on a discontinued operations basis.

The unaudited supplemental financial information provided below should be read in conjunction with the Company's separate historical financial statements and accompanying notes contained in each of the Company's Quarterly Reports on Form 10-Q for the interim periods included herein and Annual Report on Form 10-K for the fiscal year ended January 3, 2026.

Non-GAAP Financial Measures

This unaudited supplemental financial information refers to "adjusted" and "organic" amounts from 2025, which are further described in the sections below. All per share amounts are presented on a diluted basis. Amounts as presented herein may not recalculate due to the use of unrounded numbers.

Adjusted Amounts - This release refers to "adjusted" amounts. Adjustments during 2025 represent (i) restructuring and transformation costs related to business optimization activities associated with Project Jeanius, (ii) actions to streamline and transfer select production within our internal manufacturing network and, (iii) acquisition and integration-related costs associated with the Helly Hansen acquisition. Additional information regarding adjusted amounts is provided in notes to the supplemental financial information.

Organic Amounts - This release refers to "organic" amounts, which represent operating results excluding contributions from the Helly

Hansen® and Musto® brands acquired on May 31, 2025.

Reconciliations of these non-GAAP measures to the most comparable GAAP measures are presented in the supplemental financial information included in this exhibit that identifies and quantifies all reconciling adjustments and provides management's view of why this non-GAAP information is useful to investors. While management believes that these non-GAAP measures are useful in evaluating the business, this information should be viewed in addition to, and not as an alternate for, reported results under GAAP. The non-GAAP measures used by the Company in this release may be different from similarly titled measures used by other companies.

The following condensed consolidated statements of operations present the Company's unaudited financial information for each of the four quarters of fiscal 2025 and for the full year of fiscal 2025, as recast to present the Lee business on a discontinued operations basis.

						Three Months Ended																								Twelve Months Ended
(Dollars and shares in thousands, except per share amounts)						March 2025						June 2025						September 2025						December 2025						December 2025
Net revenues						$	423,001					$	492,632					$	666,472					$	819,983					$	2,402,088
Costs and operating expenses
Cost of goods sold						230,267						263,451						399,974						436,869						1,330,561
Selling, general and administrative expenses						161,365						172,233						229,084						281,507						844,189
Total costs and operating expenses						391,632						435,684						629,058						718,376						2,174,750
Operating income						31,369						56,948						37,414						101,607						227,338
Interest expense						(9,808)						(13,485)						(18,972)						(19,897)						(62,162)
Interest income						3,319						2,820						289						422						6,850
Other (expense) income, net						(10,293)						30,546						(3,049)						(3,166)						14,038
Income from continuing operations before income taxes						14,587						76,829						15,682						78,966						186,064
Income taxes						(4,338)						(18,397)						(1,310)						(21,530)						(45,575)
Income from equity method investment						-						264						1,634						3,513						5,411
Income from continuing operations						10,249						58,696						16,006						60,949						145,900
Income from discontinued operations, net of tax						32,633						15,173						20,938						12,808						81,552
Net income						$	42,882					$	73,869					$	36,944					$	73,757					$	227,452
Earnings per common share - basic
Continuing operations						$	0.18					$	1.06					$	0.29					$	1.10					$	2.63
Discontinued operations						$	0.59					$	0.27					$	0.37					$	0.23					$	1.47
Total earnings per common share - basic						$	0.77					$	1.33					$	0.66					$	1.33					$	4.10
Earnings per common share - diluted
Continuing operations						$	0.18					$	1.05					$	0.29					$	1.08					$	2.60
Discontinued operations						$	0.58					$	0.27					$	0.37					$	0.23					$	1.45
Total earnings per common share - diluted						$	0.76					$	1.32					$	0.66					$	1.31					$	4.05
Weighted average shares outstanding
Basic						55,355						55,560						55,575						55,507						55,500
Diluted						56,059						55,975						56,069						56,327						56,108

Basis of presentation for all financial tables within this release: The supplemental financial information provided in the financial tables presents the Company's unaudited condensed consolidated financial information for and as of, as applicable, each of the four quarters in fiscal 2025 and the full year of fiscal 2025, as recast to present the Lee business on a discontinued operations basis.

The Company operates and reports using a 52/53-week fiscal year ending on the Saturday closest to December 31 each year. For presentation purposes herein, all references to periods ended March 2025, June 2025 and September 2025 correspond to the 13-week fiscal periods ended March 29, 2025, June 28, 2025 and September 27, 2025, respectively, and references to December 2025 correspond to the 14-week and 53-week fiscal periods ended January 3, 2026. References to March 2025, June 2025, September 2025 and December 2025 relate to the balance sheets as of March 29, 2025, June 28, 2025, September 27, 2025 and January 3, 2026, respectively.

The following condensed consolidated balance sheets present the Company's unaudited financial information for each of the four quarters of fiscal 2025, as recast to present the Lee business on a discontinued operations basis.

(In thousands)						March 2025						June 2025						September 2025						December 2025
ASSETS
Current assets
Cash and cash equivalents						$	320,790					$	85,914					$	57,918					$	77,215
Accounts receivable, net						131,958						237,530						279,813						209,419
Inventories						298,810						543,130						604,016						435,945
Prepaid expenses and other current assets						57,371						93,446						95,149						102,056
Current assets of discontinued operations						278,849						255,756						301,157						256,481
Total current assets						1,087,778						1,215,776						1,338,053						1,081,116
Property, plant and equipment, net						82,955						119,239						114,395						113,285
Operating lease assets						18,931						124,163						118,618						110,330
Intangible assets, net						6,791						447,058						449,698						445,584
Goodwill						129,034						407,985						438,459						451,006
Other assets						176,045						228,911						228,466						212,294
Other assets of discontinued operations						174,145						174,773						175,082						169,057
TOTAL ASSETS						$	1,675,679					$	2,717,905					$	2,862,771					$	2,582,672
LIABILITIES AND EQUITY
Current liabilities
Current portion of long-term debt						$	-					$	-					$	-					$	8,750
Accounts payable						161,240						217,110						272,611						195,560
Accrued and other current liabilities						112,481						197,366						244,184						237,864
Operating lease liabilities, current						10,328						27,701						26,401						22,418
Current liabilities of discontinued operations						107,091						116,196						159,091						129,035
Total current liabilities						391,140						558,373						702,287						593,627
Operating lease liabilities, noncurrent						10,464						98,945						96,440						95,422
Other liabilities						77,484						161,059						158,059						164,431
Long-term debt						735,640						1,366,510						1,342,117						1,134,579
Other liabilities of discontinued operations						34,279						34,671						34,252						29,746
Total liabilities						1,249,007						2,219,558						2,333,155						2,017,805
Commitments and contingencies
Total equity						426,672						498,347						529,616						564,867
TOTAL LIABILITIES AND EQUITY						$	1,675,679					$	2,717,905					$	2,862,771					$	2,582,672

The following condensed consolidated statements of cash flows present the Company's unaudited financial information for each of the four quarters of fiscal 2025, on a year-to-date basis, as recast to present the Lee business on a discontinued operations basis.

						Year-to-Date
(In thousands)						March 2025						June 2025						September 2025						December 2025
OPERATING ACTIVITIES
Net income						$	42,882					$	116,751					$	153,695					$	227,452
Income from discontinued operations, net of tax						32,633						47,806						68,743						81,552
Income from continuing operations, net of tax						10,249						68,945						84,952						145,900
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization						7,349						16,523						29,994						42,688
Stock-based compensation						14,041						19,929						28,421						37,393
Other, including working capital changes						22,388						(36,608)						(33,584)						135,913
Cash provided by operating activities - continuing operations						54,027						68,789						109,783						361,894
Cash provided by operating activities - discontinued operations						23,598						34,519						57,671						93,915
Cash provided by operating activities						77,625						103,308						167,454						455,809
INVESTING ACTIVITIES
Property, plant and equipment expenditures						(2,318)						(5,309)						(12,831)						(18,307)
Capitalized computer software						(1,337)						(2,165)						(3,008)						(3,820)
Business acquisition, net of cash received						-						(870,058)						(899,372)						(901,223)
Proceeds from the settlement of foreign exchange contracts to hedge business acquisition						-						24,115						24,115						24,115
Proceeds from sales of assets						-						2						4,028						5,913
Other						508						-						584						584
Cash used by investing activities - continuing operations						(3,147)						(853,415)						(886,484)						(892,738)
Cash used by investing activities - discontinued operations						(1,615)						(2,009)						(3,436)						(6,026)
Cash used by investing activities						(4,762)						(855,424)						(889,920)						(898,764)
FINANCING ACTIVITIES
Borrowings under revolving credit facility						-						-						-						50,000
Repayments under revolving credit facility						-						-						-						(50,000)
Proceeds from issuance of long-term debt						-						1,000,000						1,000,000						1,000,000
Payment of debt issuance costs						-						(7,433)						(7,433)						(7,433)
Repayments of term loan						(5,000)						(370,000)						(395,000)						(595,000)
Repurchases of Common Stock						-						-						-						(25,000)
Dividends paid						(28,824)						(57,717)						(86,618)						(116,085)
Shares withheld for taxes, net of proceeds from issuance of Common Stock						(4,052)						(8,555)						(9,092)						(9,683)
Cash (used) provided by financing activities						(37,876)						556,295						501,857						246,799
Effect of foreign currency rate changes on cash and cash equivalents						(12,343)						(30,763)						(31,029)						(29,468)
Net change in cash and cash equivalents						22,644						(226,584)						(251,638)						(225,624)
Cash and cash equivalents - beginning of period						334,066						334,066						334,066						334,066
Cash and cash equivalents - end of period						$	356,710					$	107,482					$	82,428					$	108,442

			Three Months Ended																								Twelve Months Ended
(Dollars in thousands, except per share amounts)			March 2025						June 2025						September 2025						December 2025						December 2025
Net revenues - as reported under GAAP			$	423,001					$	492,632					$	666,472					$	819,983					$	2,402,088
Contribution from Helly Hansen (a)			-						29,232						192,650						253,617						475,485
Organic net revenues			$	423,001					$	463,400					$	473,822					$	566,366					$	1,926,603
Cost of goods sold - as reported under GAAP			$	230,267					$	263,451					$	399,974					$	436,869					$	1,330,561
Restructuring and transformation costs (b)			(1,348)						(893)						(38,455)						(5,645)						(46,341)
Adjusted cost of goods sold			228,919						262,558						361,519						431,224						1,284,220
Contribution from Helly Hansen (a)			-						14,111						108,526						121,142						243,779
Adjusted organic cost of goods sold			$	228,919					$	248,447					$	252,993					$	310,082					$	1,040,441
Gross margin - as reported under GAAP			$	192,734					$	229,181					$	266,498					$	383,114					$	1,071,527
Restructuring and transformation costs (b)			1,348						893						38,455						5,645						46,341
Adjusted gross margin			194,082						230,074						304,953						388,759						1,117,868
Contribution from Helly Hansen (a)			-						15,121						84,124						132,475						231,706
Adjusted organic gross margin			$	194,082					$	214,953					$	220,829					$	256,284					$	886,162
Selling, general and administrative expenses - as reported under GAAP			$	161,365					$	172,233					$	229,084					$	281,507					$	844,189
Restructuring and transformation costs (b)			(11,156)						(6,503)						(7,558)						(9,041)						(34,258)
Acquisition and integration-related costs (c)			(10,326)						(14,040)						(11,998)						(14,470)						(50,834)
Adjusted selling, general and administrative expenses			139,883						151,690						209,528						257,996						759,097
Contribution from Helly Hansen (a)			-						20,430						73,767						92,403						186,600
Adjusted organic selling, general and administrative expenses			$	139,883					$	131,260					$	135,761					$	165,593					$	572,497
Other (expense) income, net - as reported under GAAP			$	(10,293)					$	30,546					$	(3,049)					$	(3,166)					$	14,038
Acquisition and integration-related costs (c)			8,865						(32,980)						-						-						(24,116)
Adjusted other expense, net			$	(1,428)					$	(2,434)					$	(3,049)					$	(3,166)					$	(10,078)
Income Taxes as reported under GAAP			$	(4,338)					$	(18,397)					$	(1,310)					$	(21,530)					$	(45,575)
Tax impact of Restructuring and transformation costs, and Acquisition and integration-related costs (b) (c)			(7,338)						5,336						(14,031)						(5,339)						(21,300)
Adjusted Income Taxes, net			$	(11,676)					$	(13,061)					$	(15,341)					$	(26,869)					$	(66,875)
Diluted earnings per share from continuing operations - as reported under GAAP			$	0.18					$	1.05					$	0.29					$	1.08					$	2.60
Impact to diluted earnings per share of Restructuring and transformation costs, and Acquisition and integration-related costs (b) (c)			0.44						(0.11)						0.78						0.42						1.54
Adjusted diluted earnings per share from continuing operations			$	0.62					$	0.94					$	1.07					$	1.50					$	4.14
Contribution from Helly Hansen (a)			-						(0.12)						0.03						0.44						0.35
Adjusted organic diluted earnings per share from continuing operations			$	0.62					$	1.06					$	1.04					$	1.06					$	3.79
Adjusted diluted earnings per share from continuing operations			$	0.62					$	0.94					$	1.07					$	1.50					$	4.14
Adjusted diluted earnings per share from discontinued operations			0.58						0.27						0.37						0.23						1.45
Adjusted diluted earnings per share			$	1.20					$	1.21					$	1.44					$	1.73					$	5.59

Net income from continuing operations - as reported under GAAP			$	10,249					$	58,696					$	16,006					$	60,949					$	145,900
Income taxes			4,338						18,397						1,310						21,530						45,575
Interest expense			9,808						13,485						18,972						19,897						62,162
Interest income			(3,319)						(2,820)						(289)						(422)						(6,850)
EBIT from continuing operations			$	21,076					$	87,758					$	35,999					$	101,954					$	246,787
Depreciation and amortization			7,349						9,174						13,471						12,694						42,688
EBITDA from continuing operations			$	28,425					$	96,932					$	49,470					$	114,648					$	289,475
Restructuring and transformation costs (b)			12,504						7,396						46,013						14,686						80,599
Acquisition and integration-related costs (c)			19,191						(18,940)						11,998						14,470						26,718
Adjusted EBITDA from continuing operations			$	60,120					$	85,388					$	107,481					$	143,804					$	396,792
As a percentage of total net revenues			14.2		%				17.3		%				16.1		%				17.5		%				16.5		%
Adjusted EBITDA from discontinued operations			43,511						21,821						26,808						19,706						111,846
Adjusted EBITDA			$	103,631					$	107,209					$	134,289					$	163,510					$	508,638

Non-GAAP Financial Information: The financial information above has been presented on a GAAP basis, on an adjusted basis and on an adjusted organic basis, which excludes the operating results from the Helly Hansen acquisition. EBIT, EBITDA and adjusted presentations are non-GAAP measures. See "Notes to Supplemental Financial Information - Reconciliation of Adjusted and Adjusted Organic Financial Measures" at the end of this document. Amounts herein may not recalculate due to the use of unrounded numbers..

(a) Contribution from Helly Hansen represents the adjusted operating results from the Helly Hansen® and Musto® brands acquired on May 31, 2025.

(b) See Note 1 of "Notes to Supplemental Financial Information - Reconciliation of Adjusted and Adjusted Organic Financial Measures" at the end of this document.

(c) See Note 2 of "Notes to Supplemental Financial Information - Reconciliation of Adjusted and Adjusted Organic Financial Measures" at the end of this document.

The following table presents the unaudited financial information for the Lee segment for each of the four quarters of fiscal 2025 and for the full year of fiscal 2025, as recast to present the Lee business on a discontinued operations basis.

			Three Months Ended																								Twelve Months Ended
(In thousands)			March 2025						June 2025						September 2025						December 2025						December 2025
Net revenues			$	199,900					$	165,627					$	186,743					$	198,098					$	750,368
Cost of goods sold			96,998						89,971						101,080						110,457						398,506
Selling, general and administrative expenses			60,972						54,067						59,225						68,128						242,392
Interest income			121						77						60						191						449
Other (expense) income, net			(707)						(785)						(860)						(370)						(2,722)
Income from discontinued operations before income taxes			41,344						20,881						25,638						19,334						107,197
Income taxes			(8,711)						(5,708)						(4,700)						(6,526)						(25,645)
Income from discontinued operations, net of tax			32,633						15,173						20,938						12,808						81,552

Certain corporate overhead costs and segment costs previously allocated to Lee for segment reporting purposes did not qualify for classification within discontinued operations and have been reported in continuing operations for all periods presented in this Form 8-K. The table below presents these previously allocated costs for the three months ended March 2025, June 2025, September 2025 and December 2025, and the twelve months ended December 2025.

			Three Months Ended																								Twelve Months Ended
(In thousands)			March 2025						June 2025						September 2025						December 2025						December 2025
Cost of goods sold			1,010						556						1,273						1,879						4,718
Selling, general and administrative expenses			7,766						7,831						7,594						9,898						33,089
Total costs previously allocated to the Lee segment			8,776						8,387						8,867						11,777						37,807

The table below reconciles Lee segment profit, as previously reported, to income from discontinued operations before income taxes for the Lee business for each of the four quarters of fiscal 2025 and for the full year of fiscal 2025.

			Three Months Ended																								Twelve Months Ended
(In thousands)			March 2025						June 2025						September 2025						December 2025						December 2025
Lee segment profit			$	32,447					$	12,417					$	16,711					$	7,366					$	68,941
Total costs previously allocated to the Lee segment			8,776						8,387						8,867						11,777						37,807
Interest income			121						77						60						191						449
Income from discontinued operations before income taxes			41,344						20,881						25,638						19,334						107,197

Notes to Supplemental Financial Information - Reconciliation of Adjusted and Adjusted Organic Financial Measures

Management uses non-GAAP financial measures internally in its budgeting and review process and, in some cases, as a factor in determining compensation. In addition, adjusted EBITDA is a key financial measure for the Company's shareholders and financial leaders, as the Company's debt financing agreements require the measurement of adjusted EBITDA, along with other measures, in connection with the Company's compliance with debt covenants. While management believes that these non-GAAP measures are useful in evaluating the business, this information should be considered supplemental in nature and should be viewed in addition to, and not as an alternate for, reported results under GAAP. In addition, these non-GAAP measures may be different from similarly titled measures used by other companies.

(1) During the three months ended March 2025, restructuring and transformation costs included $0.9 million related to streamlining and transferring select production within our internal manufacturing network and $0.4 million related to business optimization activities, recorded to "cost of goods sold", and $11.2 million related to business optimization activities, recorded to "selling, general and administrative expenses." Total restructuring and transformation costs resulted in a corresponding tax impact of $2.9 million for the three months ended March 2025.

During the three months ended June 2025, restructuring and transformation costs included $0.5 million related to streamlining and transferring select production within our internal manufacturing network and $0.4 million related to business optimization activities, recorded to "cost of goods sold", and $6.5 million related to business optimization activities, recorded to "selling, general and administrative expenses." Total restructuring and transformation costs resulted in a corresponding tax impact of $1.6 million for the three months ended June 2025.

During the three months ended September 2025, restructuring and transformation costs included $38.1 million related to the closure of a portion of our manufacturing facilities and $0.4 million related to streamlining and transferring select production within our internal manufacturing network, recorded to "cost of goods sold", and $7.6 million related to business optimization activities, recorded to "selling, general and administrative expenses." Total restructuring and transformation costs resulted in a corresponding tax impact of $11.1 million for the three months ended September 2025.

During the three months ended December 2025, restructuring and transformation costs included $5.7 million related to the closure of a portion of our manufacturing facilities, recorded to "cost of goods sold", and $9.0 million related to business optimization activities, recorded to "selling, general and administrative expenses." Total restructuring and transformation costs resulted in a corresponding tax impact of $2.7 million for the three months ended December 2025.

During the twelve months ended December 2025, restructuring and transformation costs included $43.8 million related to the closure of a portion of our manufacturing facilities, $1.8 million of charges related to streamlining and transferring select production within our internal manufacturing network and $0.8 million related to business optimization activities, recorded to "cost of goods sold", and $34.3 million related to business optimization activities, recorded to "selling, general and administrative expenses." Total restructuring and transformation costs resulted in a corresponding tax impact of $16.0 million for the twelve months ended December 2025.

(2) During the three months ended March 2025, acquisition and integration-related costs included $10.3 million of professional and other fees and $8.9 million of losses related to foreign currency exchange contracts to hedge the purchase price of the Helly Hansen acquisition. Acquisition-related costs resulted in a corresponding tax impact of $4.4 million for the three months ended March 2025.

During the three months ended June 2025, acquisition and integration-related benefits included $33.0 million of gains related to foreign currency exchange contracts to hedge the purchase price of the Helly Hansen acquisition, and $14.0 million of professional and other fees. Total acquisition and integration-related benefits resulted in a corresponding tax impact of $(6.9) million for the three months ended June 2025.

During the three months ended September 2025, acquisition and integration-related costs included $12.0 million of professional and other fees. Total acquisition and integration-related costs resulted in a corresponding tax impact of $2.9 million for the three months ended September 2025.

During the three months ended December 2025, acquisition and integration-related costs included $14.5 million of professional and other fees. Total acquisition and integration-related costs resulted in a corresponding tax impact of $2.7 million for the three months ended December 2025.

During the twelve months ended December 2025, acquisition and integration-related costs included $50.8 million of professional and other fees and $24.1 million of gains related to foreign currency exchange contracts to hedge the purchase price of the Helly Hansen acquisition. Total acquisition and integration-related costs resulted in a corresponding tax impact of $5.3 million for the twelve months ended December 2025.