03:29 PM EDT, 07/23/2024 (MT Newswires) -- Kontoor Brands ( KTB ) is expected to report a slight Q2 earnings beat, but no change is expected to the company's full-year EPS guidance due to macroeconomic uncertainty and challenging wholesale conditions, UBS said in a note emailed Tuesday.

The investment firm estimates Kontoor Q2 earnings of $0.90 per share, $0.03 above the consensus, driven by slightly better sales, gross margin expansion and expense management, according to the note.

UBS also expects Kontoor to keep its 2024 EPS guidance of $4.70 to $4.80.

Despite macro uncertainty and tough wholesale conditions, sentiment around Kontoor remains "positive", UBS said.

"Our conversations with investors suggest the market has become more optimistic on [Kontoor's] outlook given an ongoing denim cycle and Wrangler's denim return to a nationwide US retailer in [H2]," UBS said.

UBS maintained its 2024, 2025 and 2026 EPS estimates at $4.80, $5.40 and $5.90, respectively. This decision is supported by industry data showing "online traffic at Wrangler and Lee's websites grew 38% and 11% [year-over-year], respectively", indicating strong demand for Kontoor's brands "despite near-term industry headwinds," it said.

Kontoor is scheduled to report Q2 financial results on Aug. 1.

UBS has a buy rating and a price target of $88 on Kontoor's stock.

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