What Happened:

Shares of clothing company Kontoor Brands (NYSE:KTB) jumped 10.4% in the morning session after the company reported first quarter results that blew past analysts' EPS expectations, driven by outperformance in its constant currency revenue growth and gross margin. It also reduced its inventory levels by 24% year on year. Looking ahead, Kontoor Brands raised its full-year EPS guidance, a great sign for investors (especially amongst a weaker consumer discretionary market backdrop). Overall, we think this was still a really good quarter that should please shareholders.

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What is the market telling us:

Kontoor Brands's shares are not very volatile than the market average and over the last year have had only 8 moves greater than 5%. Moves this big are very rare for Kontoor Brands and that is indicating to us that this news had a significant impact on the market's perception of the business. 

The biggest move we wrote about over the last year was 2 months ago, when the company dropped 14.9% on the news that the company reported fourth-quarter results that missed analysts' revenue and EPS expectations. The topline growth continued to decline in absolute terms. The company called out the challenging U.S. wholesale environment as retailers were conservative with their inventory management due to uncertain consumer spending patterns. Similarly, its full-year revenue guidance missed. To improve its financial profile amidst a challenging demand landscape, the company introduced Project Jeanius, aimed at delivering between $50 million and $100 million in gross profit improvement and SG&A savings, with a portion to be reinvestment in growth projects. Overall, this was a mediocre quarter for Kontoor Brands.

Kontoor Brands is up 10.1% since the beginning of the year. Investors who bought $1,000 worth of Kontoor Brands's shares 5 years ago would now be looking at an investment worth $1,677.

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