Levi Strauss & Co. (NYSE:LEVI) reported fiscal third-quarter earnings and sales that topped analysts’ expectations as consumer demand picked up during the back-to-school season.
The company’s stock rose more than 2% in extended trading on the news. The shares are up 23% year-to-date at $24.24 per share.
Although many apparel companies have been hit by global supply chain bottlenecks, Levi has fared well due to its diversified manufacturing. Less than 4% of its global volume comes from Vietnam, the company said. Production facilities there have been hard hit by periodic shutdowns during the pandemic.
Levi’s earnings per share came in at $0.48 U.S. compared to $0.37 expected by analysts. Revenues amounted to $1.5 billion U.S. versus $1.48 billion U.S. that had been expected.
Net income rose to $193 million U.S., or $0.47 U.S. per share, from $27 million U.S., or $0.07 U.S. a share, a year earlier.
Wholesale revenue grew 45% year-over-year, driven by strong demand in the U.S. and Europe, the company said. Direct-to-consumer sales rose 34% from 2020 levels, and climbed 3% on a two-year basis, as more shoppers visited Levi’s brick-and-mortar stores for denim wear.
Levi also reported that its digital transactions were up 10% year-over-year and up 76% on a two-year basis. They accounted for about 20% of Levi’s total sales. The company noted that its earnings benefited from Levi selling more items directly to consumers and at fuller price points, rather than using promotions.
For its fourth quarter, Levi is expecting year-over-year revenue growth of 20% to 21%, while analysts had been calling for a 22% increase. The company cautioned its outlook assumes the health crisis doesn’t dramatically worsen.
For the full year, Levi sees adjusted earnings in the range of $1.43 U.S. to $1.45 U.S. per share, ahead of Wall Street’s consensus estimate of $1.33 U.S. per share. That implies full-year revenue growth of more than 27%, which would bring sales close to 2019 levels.
