Kontoor Brands Inc (KTB)

Debt-to-capital ratio

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019
Long-term debt	US$ in thousands	763,921	768,595	773,270	827,944	782,619	824,793	786,968	789,143	791,317	773,413	782,262	790,930	887,957	1,021,710	1,130,460	1,388,740	913,269	980,607	979,687
Total stockholders’ equity	US$ in thousands	371,913	347,624	323,251	299,288	250,757	208,099	179,189	184,090	148,138	184,754	153,886	134,264	84,641	26,028	-44,889	-18,485	69,257	55,571	82,168
Debt-to-capital ratio		0.67	0.69	0.71	0.73	0.76	0.80	0.81	0.81	0.84	0.81	0.84	0.85	0.91	0.98	1.04	1.01	0.93	0.95	0.92

December 31, 2023 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $763,921K ÷ ($763,921K + $371,913K)
= 0.67

The debt-to-capital ratio of Kontoor Brands Inc has shown a generally increasing trend over the past few quarters, indicating a rising level of financial leverage. The ratio stood at 0.67 as of December 31, 2023, and has been gradually increasing to 0.92 as of June 30, 2019. This suggests that the company's reliance on debt relative to its total capital has been on the rise.

A higher debt-to-capital ratio could imply that Kontoor Brands Inc is financing a significant portion of its operations and investments through debt rather than equity. While leverage can amplify returns when times are good, it also increases financial risk, especially during economic downturns or adverse market conditions.

Investors and creditors closely monitor this ratio as it provides insights into the company's financial health and its ability to meet its debt obligations. Management should carefully manage the debt levels to strike a balance between leveraging for growth opportunities and maintaining financial stability.