Kontoor Brands CEO talks navigating consumer softness

Consumers have been dealing with mounting pressure as prices rise due to persistent high inflation. In this challenging environment, Kontoor Brands (KTB) CEO Scott Baxter joins Catalysts to discuss how his company continues to thrive despite the current strain on consumer wallets.

Baxter acknowledges that "the consumer right now is gonna go ahead and buy the things that they need," emphasizing the growing importance of the consumer staples sector in which Kontoor Brands operates. He expresses confidence in his company's growth, stating he believes that their consumers "have gotten used to our brands at the right price point in the right channels."

Sustaining demand, innovation, and delivering great products have been key drivers of Kontoor Brands' resilience, according to Baxter. He also highlights their upcoming collaboration with Lainey Wilson, which he believes has further boosted demand. In his words, "It's things like that from a demand-creation standpoint that keep us relevant in the forefront with our consumer."

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This post was written by Angel Smith

Video transcript

We're getting a pulse on the consumer here kicking off a big week of retail earnings from the likes of Macy's target Elf Deckers, outdoor and Ross stores.

We going to get clues about consumer spending as inflation still remaining sticky, particularly in apparel, but the rate of price increases in April remains above 1% from the prior month and year here with more live from the New York Stock Exchange.

We have Scott Baxter, Ceo of Contour brands, Contour Rain, the opening Bell this morning to Herald in its five year anniversary.

And we also have Yahoo Finance is executive editor Brian.

So joining us at the desk, take it away, Scott.

Good to, good to see you here this morning.

I can't believe it's been five years since the company broke up from the F Corp and just in terms of demand in a moment where consumers are so focused on inflation.

What are you seeing on the top line?

Well, we're seeing, you probably saw our last quarter.

We had some inventory challenges with our biggest customers, but we hit the numbers and actually exceeded what we had committed to.

And we've kind of said that we program that we're on right now is going to be complete through the rest of the year.

So, you know what we've committed to, we said we're going to hit through the remainder of the year.

And I think our feeling on the consumer right now, Brian is pretty simple that the consumer right now is going to go ahead and buy the things that they need.

So to be in a space like us where we're a consumer staple and you use our product for work and recreation.

It's an important space to be in.

And also we're at a great price point that's really relevant right now in this marketplace, Scott.

Are you still out there pushing through higher prices for?

Just because you see various pressures in the supply chain?

No, we're not, we're not out there doing that in any significant way.

We think that we're in a really, really good position.

You know, we like how we position our brands and where we position them and the specific channels that we're in and our consumers gotten used to our brands at the right price point in the right channels.

So we think we're in a really good position.

We've been gaining share, Brian.

So that's been really important to us, you know, during a tough time share.

Those are some of the things that you want to make sure are getting done in your brands, Scott.

I'm curious, what do you attribute that to and then the ability here to maintain that brand, that larger market share that you now have because the results of your more competitive pricing, how do you, how do you keep those consumers coming back once inflation isn't as big of an issue anymore?

I think for us, it's been the demand creation.

You know, we build great products.

So we're designed a product that people actually want to buy, they want to buy it at full price and then we back it up with some incredible demand creation.

I mean, just this, this past week alone is a great example.

You know, Laney Wilson is a spokesperson for our Western line for our female Western line.

And here she wins, you know, Entertainer of the year at the American Academy Country Music Awards, you know, female vocalist of the year.

And we've got a big line coming out with her in the fall that she helped design.

So the timing of all that and just, you know, the explosion of her popularity in our line together, it's just really perfect timing.

So it's things like that from a demand creation standpoint that keep us relevant in the forefront with our consumer.

If you're going to bring up country music and jeans, I got to bring up the new queen in the space which is Beyonce.

Are you concerned at all about a song like Levi's Jeans coming out in the popularity of that?

No, you know, because we just had a song about Wrangler jeans come out from a Miranda Lambert.

So we just had one happen.

So Miranda, no, come on.

I mean, you got to be a little bit concerned, right?

The market opportunity of a song like that is huge.

No, not for us.

We're so embedded in the country music, you know, space.

We've been, we've been the premier country music Gene in the Western Gene since 1947.

So we're in a really good spot with our consumers from a country music and also a western standpoint.