A sign is posted in front of Levi Strauss & Company headquarters on April 09, 2021 in San Francisco, California.
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Levi Strauss On Thursday it reported quarterly revenue and earnings that were above Wall Street’s expectations as the clothing company known for its denim said it benefited from Americans choosing a more relaxed dress code.
The San Francisco company increased its quarterly dividend and stuck to its guidance for the year. Its shares were up nearly 4% at $17.08 in after-hours trading.
How Levy’s fared for the quarter ended May 29 compared to Wall Street estimates based on a poll of analysts by Refinitiv.
- revenue: $1.47 billion versus $1.43 billion expected
- earnings per share: 29 cents adjusted versus 23 cents expected
Levi Strauss said its higher revenue in the quarter was driven by strong both direct-to-consumer and wholesale sales. It said digital revenue grew 3% globally and accounted for 20% of sales in the quarter.
“Jeans are more acceptable in the office now,” CEO Chip Berg told CNBC in an interview.
Berg said the retailer tracked mid-single-digit declines from a year ago on its two value denim brands, which sell at Target, Walmart and Amazon and make up a small percentage of the company’s total business.
“So there is some evidence that the more value conscious consumer — the lower-income consumer — is starting to feel the squeeze and start making some choices,” he said.
But he said the decline was more than offset by the company’s core business.
Levi’s revenue of $1.47 billion for the quarter was up 15% from the $1.27 billion the company reported in the year-ago period. Analysts were expecting $1.43 billion.
Sales increased by 17% in the US, 3% in Europe and 16% in Asia compared to 2021. Levi’s other brands, Dockers and Beyond Yoga, saw 56% growth over the previous year.
Company sales, general and administrative expenses for the quarter were $779 million, up from $644 million last year. The company attributed the escalation to the conflict in Ukraine.
For the quarter, the company reported net income of $49.7 million, or 12 cents per share, compared to $64.7 million, or 16 cents per share, in the year-ago period. On an adjusted basis, the company said it earned 29 cents per share in the most recent quarter, higher than Wall Street’s expectation of 23 cents per share.
For the full year, the company stood by its guidance for growth to 13% of revenue from 11% a year ago. It still expects adjusted earnings of $1.50 to $1.56 per share.
The company increased its quarterly dividend from 10 cents per share to 12 cents per share.
Levi’s chief financial officer, Harmeet Singh, told CNBC that the company has decided to reaffirm its fiscal 2022 outlook, but to increase its dividend given the impact on the war overseas, a potential slowdown for the value-conscious consumer. In China, the Covid lockdown continued and the currency changed.
Read the company’s earnings release here.
CNBC’s Lauren Thomas contributed to this report.