Kontoor Brands Inc

NOTE 3 —BUSINESS SEGMENT INFORMATION

The Company hastwo reportable segments:

•Wrangler —Wrangler® branded denim, apparel, footwear and accessories.

•Lee —Lee® branded denim, apparel, footwear and accessories.

The Company considers its chief executive officer to be its chief operating decision maker. The chief operating decision maker allocates resources and assesses performance based on the global brand net revenues and segment profit of Wrangler® and Lee®, which are the Company's reportable segments. Segment profit is defined as income before income taxes, interest expense, interest income and corporate and other expenses. Segment net revenues and segment profit are reviewed and compared against forecasted amounts in order to guide execution of the Company's strategic goals. Segment assets and segment expenditures for long-lived assets are not regularly provided to or used by the chief operating decision maker and thus are not disclosed.

In addition, we report an "Other" category to reconcile segment revenues and segment profit to the Company's operating results, but the Other category does not meet the criteria to be considered a reportable segment. Other includes sales and licensing of Chic®, Rock & Republic®, other company-owned brands and private label apparel, and the associated costs.

Accounting policies utilized for internal management reporting at the individual segments are consistent with those included in Note 1 to the Company's financial statements in this Form 10-K. In addition, the Company has certain shared costs in each region that it allocates between the Wrangler® and Lee® segments. In addition, the Company allocates costs for certain centralized functions and programs to the Wrangler® and Lee® segments. These centralized functions and programs include, but are not limited to, information technology, human resources, supply chain, insurance and related benefit costs associated with those functions. Allocations are based on appropriate metrics such as usage or production of net revenues.

Corporate and other expenses, including certain restructuring and transformation costs, and interest income and expense are not controlled by segment management and therefore are excluded from the measurement of segment profit.

Kontoor Brands, Inc. 2024 Form 10-K 59

The following tables present financial information for the Company's reportable segments and income before income taxes:

(1) Refer to Note 2 to the Company's financial statements in this Form 10-K for the reconciliation of reportable segment revenues to consolidated net revenues.

(2) "Other segment items" primarily includes funding fees related to the sale of trade accounts receivable program discussed in Note 4 to the Company's financial statements in this Form 10-K. Funding fees are reflected in the Company's statements of operations within "other expense, net".

(3) "Loss related to other revenues" includes sales and licensing of Chic®, Rock & Republic®, other company-owned brands and private label apparel, and the associated costs, for purposes of reconciling "total reportable segment profit" to consolidated "income before income taxes."

The following table presents supplemental information of net revenues by geographic area based on the location of the customer:

Our largest customer accounted for 36% of the Company's total net revenues in 2024, 2023 and 2022. Our second-largest customer accounted for 13% of total net revenues in 2024, and 11% of total net revenues in both 2023 and 2022. Sales to these two customers are included in both the Wrangler® and Lee® reportable segments.

The following table presents "property, plant and equipment, net" recorded in the Company's balance sheets by geographic area based on physical location:

60 Kontoor Brands, Inc. 2024 Form 10-K