Levi Strauss gets top estimates on strong demand and price hikes

The Levi Strauss & Co. label is seen on clothing at a store at the Woodbury Common Premium Outlets in Central Valley, New York, U.S., February 15, 2022. REUTERS/Andrew Kelly/File Photo

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April 6 (Reuters) – Levi Strauss & Co’s (LEVI.N) quarterly results beat Wall Street estimates on Wednesday, helped by price increases and strong demand for its jeans, tops and jackets as more and more more people venture out and attend social events.

Shares of the jeans maker, which reaffirmed its 2022 revenue and profit forecast, rose about 2% in extended trading.

Levi’s 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 baggy apparel also helped drive industry-wide sales.

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Double-digit sales growth in all markets helped the company offset some of the headwinds, and higher full-price sales and lower promotions boosted the company’s performance, said Dana Telsey , retail analyst at Telsey Advisory Group.

“We don’t see any real pullback on pricing at this point,” chief executive Charles Bergh said on the earnings call, adding there was room for stronger pricing in the second half, which would be determined according to the costs incurred by the company.

The San Francisco-based company’s first-quarter revenue rose 21.8% to $1.59 billion, versus an average analyst estimate of $1.55 billion, according to IBES data from Refinitiv.

Levi’s chief financial officer Harmit Singh, however, said supply chain issues reduced revenue opportunities by about $60 million, or 5%, mostly in the United States.

Excluding items, Levi earned 46 cents per share, above estimates of 42 cents per share.

Separately, Levi said in a filing that it would review assets specific to Russian business operations for impairment in the second quarter.

The company in March suspended business operations in Russia, including new investments, following the country’s invasion of Ukraine.

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Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Vinay Dwivedi

Our standards: The Thomson Reuters Trust Principles.

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