Levi Strauss lifts outlook after sales and profit beat estimates
Levi Strauss topped analyst expectations, raised its full-year forecast and dividend, though its shares fell in after-hours trading.
By Sal Moretti · Money Reporter
2 min read
Levi Strauss gave investors stronger numbers and a brighter forecast on Wednesday, but the stock still took a spill after hours.
The denim maker reported fiscal second-quarter earnings and revenue ahead of Wall Street estimates, then raised its full-year outlook and dividend, CNBC reported. Shares fell more than 5% in extended trading after the results.
For the quarter ended May 31, Levi Strauss posted adjusted earnings of 28 cents per share, above the 24 cents analysts expected, according to LSEG. Revenue came in at $1.56 billion, also ahead of the $1.52 billion expected by analysts surveyed by LSEG.
Reported net income rose to $87.3 million, or 22 cents per share, from $67 million, or 17 cents per share, in the same period a year earlier, according to the company figures reported by CNBC.
Sales increased about 8% from $1.45 billion a year earlier to $1.56 billion.
Forecast gets a lift
Levi Strauss now expects full-year adjusted earnings per share of $1.46 to $1.52. Its previous forecast called for $1.42 to $1.48.
The top end of the new range is above the $1.50 per-share estimate from LSEG.
The company also lifted its full-year sales forecast. Levi Strauss now expects revenue growth of 7% to 7.5%, up from its earlier view of 5.5% to 6.5%. Analysts tracked by LSEG had expected 6.6% growth.
Chief financial officer Harmit Singh said about half of the expected sales growth is projected to come from higher prices, while the other half is expected to come from selling more units, CNBC reported.
The company also raised its dividend, according to CNBC. The report did not give the new dividend amount.
Gass points to resilient shoppers
CEO Michelle Gass told CNBC that Levi Strauss’ core customer has held up, even with higher gas prices putting pressure on household budgets.
Gass said roughly two-thirds of the quarter’s sales growth came from unit sales rather than pricing, a detail she said helped support the company’s decision to raise its guidance and dividend.
“Our demand remains healthy,” Gass told CNBC. “We’re seeing strength across our key segments of consumers, so we have our core Levi’s, but we’re also seeing strength in signature, as well as our new premium blue tab.”
The quarter puts Levi Strauss in a stronger position than analysts had expected, with growth coming from both pricing and volume, according to the company comments reported by CNBC. The after-hours share drop, however, showed investors were not cheering the earnings beat in late trading.
This story draws on original reporting from CNBC.