What Kontoor Brands, Inc. told the SEC could break it.

Kontoor sources approximately 77% of its finished-goods units from independent manufacturers primarily located in Asia — with its largest number of units sourced from Bangladesh — and produces substantially all of the remainder at Company-owned facilities in Mexico (across ~330 contract manufacturing facilities in 28 countries). This concentrates supply-continuity risk in Bangladesh/Asia (labor disruptions, political instability, transportation/port delays) and in its Mexico manufacturing base, on top of tariff cost exposure.

“During 2025, approximately 77% of our units were purchased from independent manufacturers primarily located in Asia, with our largest number of units sourced from Bangladesh, and substantially all of the remainder produced by Company-owned and -operated manufacturing facilities located in Mexico.”

Kontoor relies on a limited number of North American mills/third-party suppliers for raw materials (denim fabric and trims), with approximately 46% of its raw materials provided by its top three North American suppliers in 2025, and some products available in the short term from only one or a very limited number of sources. It has no long-term contracts with its suppliers or manufacturing sources, so a mill disruption could interrupt finished-goods shipments and lead to canceled customer orders.

“We rely on a limited number of North American third-party suppliers for raw materials. Such products may be available, in the short-term, from only one or a very limited number of sources. In 2025, approximately 46% of our raw materials were provided by our top three suppliers in North America.”

Because Kontoor sources roughly 77% of its units from independent manufacturers primarily in Asia (largest from Bangladesh), the U.S. tariff regime — which in 2025 and early 2026 raised rates on virtually all imports — directly increases its product costs. The impact is realized: the net impact from tariffs, product costs and pricing adjustments pressured gross and operating margins across its Wrangler and Lee segments in 2025. Ongoing tariff increases, trade-negotiation uncertainty, and a February 2026 Supreme Court tariff opinion add continued volatility.

“During 2025 and at the beginning of 2026, the U.S. government enacted and continues to enact significant changes to its tariff regime which increased rates on virtually all imports. The ongoing impact of increased tariff rates and uncertainty regarding the outcomes of trade negotiations is contributing to macroeconomic volatility.”