Levi Strauss results top estimates on strong demand, price hikes
Levi Strauss & Co quarterly results beat Wall Street estimates on Wednesday, helped by price increases and strong demand for its jeans, tops and jackets as more people venture out and attend social events.
Shares of the jeans maker, which reaffirmed its revenue and profit forecast for 2022, rose about 2% in extended trading.
Levi has benefited from price increases aimed at mitigating the impact of supply chain disruptions, inventory shortages and inflationary pressures, while an accelerating trend for high-rise jeans and loose-fitting clothes has also helped drive sector-wide sales.
Double-digit sales growth in every market helped the company offset some of the headwinds, and more full-price sales and lower promotions boosted the company's performance, Telsey Advisory Group retail analyst Dana Telsey said.
"We're not seeing any real pushback on pricing at all at this point," Chief Executive Officer Charles Bergh said in the earnings call, adding that there was room for stronger pricing in the second half of the year, which would be determined based on costs incurred by the company.
The San Francisco-based company's first-quarter revenue rose 21.8% to $1.59 billion, compared with analysts' average estimate of $1.55 billion, according to IBES data from Refinitiv.
Levi Chief Financial Officer Harmit Singh, however, said that supply chain-related issues cut revenue opportunities by about $60 million, or 5%, primarily in the United States.
Excluding items, Levi earned 46 cents per share, above estimates of 42 cents per share.
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