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Levi Strauss hikes dividend as second-quarter earnings exceed expectations

Bibliometric Details: Issue No: 7 | Issue Month:July | Issue Year:2022

A ticket is posted in entrance of the Levi Strauss & Co. headquarters on April 09, 2021 in San Francisco, California.

Justin Sullivan | Getty Pictures News | Getty Pictures

Levi Strauss on Thursday reported quarterly income and earnings that got here in above Wall Avenue expectations, because the clothes firm identified for its denim stated it benefitted from Americans opting for added relaxed dress codes.

The San Francisco firm increased its quarterly dividend and stood by its guidance for the 300 and sixty five days. Its shares were up about 4% at $17.08 in after-hours trading.

Here’s how Levi conducted for the quarter ending Might perchance additionally fair 29 in contrast to Wall Avenue estimates in accordance with a watch of analysists by Refinitiv.

  • Earnings:  $1.47 billion vs. $1.43 billion expected
  • Earnings per share: 29 cents adjusted vs. 23 cents expected

Levi Straus stated its better income in the quarter changed into fueled by each and every stronger articulate-to-user and wholesale sales. It stated digital income rose 3% globally and accounted for 20% of sales in the quarter.

“Denims are literally worthy extra acceptable in the place of job,” CEO Chip Bergh told CNBC in an interview.

The retailer did track mid-single-digit declines from a 300 and sixty five days in the past at its two trace denim producers, which sell at Target, Walmart and Amazon and make up a small share of the firm’s overall industry, Bergh stated.

“So there is some proof that the extra trace unsleeping user — the decrease profits user — is starting up to undoubtedly feel the squeeze and is starting up to make some choices,” he stated.

But he stated the declines were extra than offset by the firm’s core industry.

Levi’s income of $1.47 billion for the quarter changed into up 15% from the $1.27 billion the firm reported in the 300 and sixty five days-in the past interval. Analysts expected $1.43 billion.

Sales grew by 17% in the Americas, 3% in Europe and 16% in Asia in contrast to 2021. Levi’s other producers, Dockers and Previous Yoga, noticed an amplify of 56% in contrast to final 300 and sixty five days.

The firm’s promoting, total and administrative prices were $779 million in the quarter, better than the $644 million final 300 and sixty five days. The firm attributed the amplify to the war in Ukraine.

For the quarter, the firm reported a catch profits of $49.7 million, or 12 cents a share, in contrast $64.7 million, or 16 cents a share, in the 300 and sixty five days-in the past interval. On an adjusted foundation, the firm stated it earned 29 cents a share in the most novel quarter, which changed into extra than the 23 cents per share Wall Avenue expected.

For the elephantine-300 and sixty five days, the firm stood by its guidance for income to develop 11% to 13% from a 300 and sixty five days in the past. It aloof expects adjusted earnings of $1.50 to $1.56 per share.

The firm 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 firm made up our minds to reaffirm its fiscal 2022 outlook but to amplify its dividend given the lingering effects on the war foreign, the aptitude slowdown of the trace unsleeping user, persisted Covid lockdowns in China and forex adjustments.

Read the firm’s earnings open here.

CNBC’s Lauren Thomas contributed to this tale.

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