CEO Michelle Gass Says DTC-First Denim Lifestyle Pivot Is Delivering Faster Growth and Higher Profitability as Levi Raises Full-Year Sales Outlook to 7–7.5% and EPS Range to $1.46–$1.52
Levi Strauss beat Wall Street’s quarterly expectations on the top and bottom lines on Wednesday, leading the retailer to increase its guidance and its dividend. CNBC
The company reported earnings of $0.28 per share, beating estimates of $0.25 by $0.03, and revenue of $1.56 billion, beating estimates of approximately $1.55 billion. The company’s reported net income for the three-month period that ended May 31 was $87.3 million, compared with $67 million a year earlier. Sales rose to $1.56 billion, up about 8% from $1.45 billion a year earlier.
DTC net revenues increased 11% on a reported basis and 8% on an organic basis, while Asia net revenues increased 10% on a reported basis and 12% on an organic basis. Adjusted free cash flow increased nearly 60% year over year to $231 million, driven by business momentum and improved working capital.
Levi is now expecting full-year adjusted earnings per share to be between $1.46 and $1.52, up from a prior range of between $1.42 and $1.48. Levi also raised its top-line outlook and is now expecting full-year sales to rise between 7% and 7.5%, compared with a prior range of between 5.5% and 6.5%.
The company completed the sale of its Dockers business, now reported as discontinued operations, and executed a $200 million accelerated share repurchase, retiring 7.8 million Class A shares.
Despite the beat and raised guidance, Levi’s shares dropped more than 5% in extended trading. CEO Michelle Gass said the company’s core consumer is proving to be resilient even in the face of higher gas prices. Jeans, it turns out, are one of the last things people stop buying.
Check out our previous coverage of retail earnings and fashion business on The Trusted Times.
