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Levi Strauss on Thursday reported quarterly revenue and earnings that came in above Wall Street expectations, as the clothing company known for its denim said it benefitted from Americans opting for more relaxed dress codes.
The San Francisco company increased its quarterly dividend and stood by its guidance for the year. Its shares were up about 4% at $17.08 in after-hours trading.
Here’s how Levi performed for the quarter ending May 29 compared to Wall Street estimates based on a survey of analysists by Refinitiv.
- Revenue: $1.47 billion vs. $1.43 billion expected
- Earnings per share: 29 cents adjusted vs. 23 cents expected
Levi Straus said its higher revenue in the quarter was fueled by both stronger direct-to-consumer and wholesale sales. It said digital revenue rose 3% globally and accounted for 20% of sales in the quarter.
“Jeans are now much more acceptable in the office,” CEO Chip Bergh told CNBC in an interview.
The retailer did track mid-single-digit declines from a year ago at its two value denim brands, which sell at Target, Walmart and Amazon and make up a small percentage of the company’s overall business, Bergh said.
“So there’s some evidence that the more value conscious consumer — the lower income consumer — is starting to feel the squeeze and is starting to make some choices,” he said.
But he said the declines were 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 expected $1.43 billion.
Sales grew by 17% in the Americas, 3% in Europe and 16% in Asia compared to 2021. Levi’s other brands, Dockers and Beyond Yoga, saw an increase of 56% compared to last year.
The company’s selling, general and administrative expenses were $779 million in the quarter, higher than the $644 million last year. The company attributed the increase to the conflict in Ukraine.
For the quarter, the company reported a net income of $49.7 million, or 12 cents a share, compared $64.7 million, or 16 cents a share, in the year-ago period. On an adjusted basis, the company said it earned 29 cents a share in the most recent quarter, which was more than the 23 cents per share Wall Street expected.
For the full-year, the company stood by its guidance for revenue to grow 11% to 13% from a year ago. It still expects adjusted earnings of $1.50 to $1.56 per share.
The company hiked its quarterly dividend to 12 cents a share, up from 10 cents a share.
Harmit Singh, Levi’s chief financial officer, told CNBC that the company decided to reaffirm its fiscal 2022 outlook but to increase its dividend given the lingering effects on the war overseas, the potential slowdown of the value conscious consumer, continued Covid lockdowns in China and currency changes.
Read the company’s earnings release here.
CNBC’s Lauren Thomas contributed to this report.