Levi Strauss on Wednesday posted earnings and revenue that topped Wall Street’s expectations.
Shares of the company rose in after-hours trading as the company also offered upbeat sales guidance for its new fiscal year.
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Here’s how Levi did in its fiscal fourth quarter compared with what Wall Street was anticipating, based on a survey of analysts 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 that ended Nov. 27 was $151 million, or 38 cents per share, compared with $153 million, or 37 cents per share a year earlier.
Sales were $1.59 billion, down 6% from a year earlier.
Levi has been grappling with a slowdown in discretionary spending and a reduced demand for denim, leading some analysts to downgrade the stock.
The denim brand saw a drop in direct to consumer revenue, which the company blamed on store closures in Russia.
Direct to consumer sales declined 2% after Levi closed nearly all of its shops in Russia, a major market for the denim retailer, Levi CEO and President Chip Bergh told CNBC. Still, Levi’s direct channels saw a strong Christmas season and sales increased 10% in November and December compared to the prior year, the company said.
Digital sales were also down 7% year-over-year, which the company attributed to a return to stores and a cooldown on online shopping. The retailer has hired a new chief digital officer to improve the online shopping experience and boost sales. The new chief previously oversaw digital operations for Nordstrom.com and NordstromRack.com.
Europe will remain a strong focus for Levi in the coming fiscal quarter, Bergh said. And the retailer plans to open about 100 new stores globally, between 70 and 80 on a net basis, he said.
For fiscal 2023, the blue jeans mainstay expects revenues between $6.3 billion and $6.4 billion, translating to growth of 1.5% to 3% year-over-year, as long as inflation and pandemic-related headwinds don’t get any worse. The company expects adjusted earnings per share of $1.30 to $1.40. Wall Street is estimating $6.27 billion in sales and $1.35 earnings per share.
Levi’s chief financial officer, Harmit Singh, will also be the company’s chief growth officer, effective immediately, Bergh announced in a news release. He’ll be focusing on expanding the company’s growth into direct-to-consumer, women’s apparel and its other brands, Beyond Yoga and Dockers, among other initiatives.
Find the full earnings release from Levi here.
Correction: This story was updated to reflect Levi Strauss’s plans to open about 100 new stores globally.