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Levi Strauss Co (LEVI) Q4 2022 Profit

Levi’s selvedge denim jeans displayed in Louisville, Kentucky.

Luke Sharrett | Bloomberg | Getty Images

Levi Strauss earnings and earnings were released on Wednesday that beat Wall Street’s expectations.

The company’s shares rose after hours as the company also released an upbeat sales forecast for the new fiscal year.

Here are Levi’s financial fourth quarter results compared to what Wall Street had expected, according to an analyst survey conducted by Refinitiv:

  • Earnings per share: 34 cents adjusted vs. 29 cents expected.
  • Revenue: $1.59 billion vs. $1.57 billion expected

The company’s reported net income for the three-month period ended November 27 was $151 million, or 38 cents per share, compared to $153 million, or 37 cents per share, a year earlier.

Sales were $1.59 billion, down 6%. a year earlier.

Levi is struggling with a slowdown in discretionary spending and declining demand for denim, which has led some analysts to downgrade the stock.

The denim brand is facing a drop in direct consumer revenue, which the company blamed on store closures in Russia.

Direct consumer goods sales fell 2% after Levi closed nearly all of its stores in Russia, a major market for denim retailers, Levi CEO and President Chip Berg told CNBC. However, Levi’s direct channels saw a strong Christmas season, with sales up 10% in November and December compared to the previous year, the company said.

Digital sales were also down 7% year-over-year, which the company attributed to a return to stores and a hiatus from 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 Levi’s focus in the upcoming fiscal quarter, Berg said. The retailer plans to open around 100 new stores across Europe, between 70 and 80 on a net basis.

In fiscal 2023, the blue jeans mainstay expects revenue of between $6.3 billion and $6.4 billion, up 1.5-3% year-over-year if inflation and pandemic-related headwinds don’t get worse. The company expects adjusted earnings per share to be between $1.30 and $1.40. Wall Street estimates sales at $6.27 billion and earnings at $1.35 per share.

Levi’s chief financial officer Harmeet Singh will also become the company’s director of development with immediate effect, Berg said in a press release. He will focus on expanding the company’s growth through the direct sale of women’s clothing and its other brands, Beyond Yoga and Dockers, among other initiatives.

Find Levi’s full earnings report here.


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