A pair of Levi’s jeans with selvedge denim, arranged in Louisville, Kentucky.
Luke Sharret | Bloomberg | Getty Images
Levi Strauss on Wednesday released earnings and earnings that beat Wall Street expectations.
The company’s shares rose in after-hours trading as the company also gave upbeat sales guidance for its new fiscal year.
Here’s how Levi fared in the fiscal fourth quarter versus Wall Street expectations, based on a poll of analysts by Refinitiv:
- Earnings per share: 34 cents adjusted vs. 29 cents expected
- Revenue: $1.59 trillion vs. $1.57 trillion expected
The Company’s reported net income for the three month period ended 11/27 was $151 million, or 38 cents a share, compared to $153 million, or 37 cents a share, for the prior year.
Revenue was $1.59 billion, down 6% from a year earlier.
Levi has struggled with a slowdown in discretionary spending and lower demand for denim, prompting some analysts to downgrade the stock.
The denim brand saw direct consumer revenue fall, which the company attributed to store closures in Russia.
Direct-to-consumer sales fell 2% after Levi closed almost all of its stores in Russia, a key market for the denim retailer, Chip Bergh, Levi’s CEO and president, told CNBC. Still, Levi’s direct channels enjoyed a strong holiday season, with sales up 10% year over year in November and December, the company said.
Digital sales were also down 7% year over year, which the company attributed to a return to stores and a slowdown in online shopping. The retailer has hired a new chief digital officer to improve the online shopping experience and increase sales. The new chief previously oversaw the digital operations of Nordstrom.com and NordstromRack.com.
Europe will remain a strong focus for Levi in the coming fiscal quarter, Bergh said. The retailer plans to open around 100 new stores across Europe, between 70 and 80 net.
For fiscal 2023, the blue jean mainstay expects revenue of between $6.3 billion and $6.4 billion, growing 1.5% to 3% year over year, assuming inflation- and pandemic-related headwinds don’t get worse will. The company expects adjusted earnings per share to be in the range of $1.30 to $1.40. Wall Street estimates sales at $6.27 billion and earnings per share at $1.35.
Effective immediately, Levi’s chief financial officer, Harmit Singh, will also serve as the company’s chief growth officer, Bergh announced in a press release. He will focus on expanding the company’s growth into direct selling, women’s apparel and his other brands, Beyond Yoga and Dockers, among others.
Read Levi’s full earnings announcement here.