Levi Strauss raises outlook after second-quarter results beat estimates
The denim company topped Wall Street forecasts for profit and revenue, then lifted its full-year sales and earnings targets.
By Hana Yoshida · Markets Reporter
2 min read
Levi Strauss reported better-than-expected fiscal second-quarter results and raised its full-year forecast, CNBC reported Wednesday. The stronger outlook matters because the denim maker said demand held up even as consumers faced higher gas prices.
The company also increased its dividend, according to CNBC, though the report did not specify the new payout. Levi’s results topped analyst expectations for both revenue and adjusted earnings, based on LSEG estimates cited by CNBC.
Quarter tops forecasts
For the three months ended May 31, Levi Strauss posted adjusted earnings of 28 cents per share, CNBC reported. Analysts surveyed by LSEG had expected 24 cents per share.
Revenue came in at $1.56 billion, ahead of the $1.52 billion analysts expected, according to LSEG figures cited by CNBC. Sales rose about 8% from $1.45 billion in the same period a year earlier.
Levi’s reported net income was $87.3 million, or 22 cents per share, CNBC reported. That compared with $67 million, or 17 cents per share, a year earlier.
Guidance moves higher
Levi Strauss now expects full-year adjusted earnings per share of $1.46 to $1.52, CNBC reported. Its previous forecast called for $1.42 to $1.48 per share.
The top end of the new earnings range is above the $1.50 per share expected by analysts surveyed by LSEG, according to CNBC. The company also lifted its sales forecast, projecting full-year growth of 7% to 7.5%.
That compares with Levi’s prior sales growth target of 5.5% to 6.5%, CNBC reported. The new range is also above the 6.6% growth analysts expected, based on LSEG data cited by CNBC.
Chief financial officer Harmit Singh told CNBC that the company expects roughly half of the full-year sales growth to come from higher prices and half from unit sales. That mix points to a forecast that relies on both pricing and volume gains.
Consumer demand remains a focus
Chief executive Michelle Gass told CNBC that Levi’s core customer has remained resilient despite higher fuel costs. She said about two-thirds of the quarter’s sales growth came from unit sales rather than price increases.
Gass said that performance gave the company confidence to raise both its outlook and dividend. “Our demand remains healthy,” she told CNBC, adding that Levi’s saw strength in its core brand, Signature business and new premium Blue Tab line.
The report suggests Levi’s has kept momentum in multiple parts of its business while many retailers watch consumer spending closely. The company’s updated targets show management expects that demand to continue through the rest of the fiscal year, according to CNBC.
This story draws on original reporting from CNBC.