Levi Strauss & Co. (LEVI) Q3 2021 earnings beat

Jeans are exhibited at a Levi Strauss shop in New York, March 19, 2019.

Shannon Stapleton | Reuters

Levi Strauss & Co. on Wednesday noted fiscal 3rd-quarter earnings and product sales that topped analysts’ anticipations, as shopper demand picked up in the course of the back again-to-school period and purchasers seemed to stock up on the hottest denim developments.

Its inventory rose more than 2% in prolonged investing on the information, owning shut the day down extra than 5%.

Despite the fact that a lot of attire corporations have been hit by international provide chain bottlenecks, Levi has fared properly comparatively due to its diversified manufacturing. Less than 4% of its worldwide volume comes from Vietnam, the enterprise stated. Generation amenities there have been challenging hit by periodic shutdowns throughout the pandemic.

“Our source chain seriously is a source of aggressive gain,” Chief Government Chip Bergh explained to CNBC. “We can move product all over with a great deal of agility. … We’ve been working the company in opposition to various eventualities for the last 18 months.”

This is how the organization did in the a few-thirty day period interval finished Aug. 29 compared with what Wall Street was expecting, dependent on a study of analysts by Refinitiv:

  • Earnings for each share: 48 cents altered vs. 37 cents anticipated
  • Profits: $1.5 billion vs. $1.48 billion envisioned

Web earnings rose to $193 million, or 47 cents for each share, from $27 million, or 7 cents a share, a year earlier. Excluding 1-time products, the corporation attained 48 cents for each share. Analysts had predicted income of 37 cents for each share.

Earnings rose 41% to $1.5 billion from $1.06 billion a calendar year previously. That slightly topped estimates of $1.48 billion.

Bergh reported Levi took a about $10 million hit to its income due to supply chain concerns.

Wholesale income grew 45% calendar year about year, pushed by potent demand in the U.S. and Europe, the enterprise reported. Immediate-to-consumer income rose 34% from 2020 concentrations, and climbed 3% on a two-12 months foundation, as extra buyers visited Levi’s have brick-and-mortar outlets for denim and lounge use.

Digital transactions had been up 10% year about yr and up 76% on a two-yr foundation. They accounted for about 20% of Levi’s full income.

The company observed that its earnings benefited from Levi providing a lot more products specifically to shoppers and at fuller selling price factors, fairly than employing promotions.

The lingering overall health crisis is even now shuttering outlets around the planet. Levi stated roughly 10% of its business-operated suppliers have been shut in the course of the most recent quarter, principally in Asia. Roughly 4% stay shut, it explained.

For its fourth quarter, Levi is expecting 12 months-over-12 months earnings development of 20% to 21%, when analysts had been contacting for a 22% raise. The business cautioned its outlook assumes the wellbeing disaster would not dramatically worsen.

It sees fourth-quarter earnings ranging among 38 cents and 40 cents per share, on an modified foundation. Analysts had been on the lookout for an adjusted, for every-share profit of 40 cents.

For the full year, Levi sees modified earnings in the array of $1.43 to $1.45 per share, forward of Wall Street’s consensus estimate of $1.33 per share. That implies whole-calendar year earnings progress of a lot more than 27%, which would bring sales shut to 2019 amounts.

“Our expectation is that vacation is heading to be rather great,” Bergh explained. “We are chasing demand from customers suitable now, from a source chain standpoint, to make positive that all people can place Levi under their Xmas tree.”

The company also explained Wednesday that its board permitted a new $200 million share buyback plan through the newest quarter.

Levi shares are up about 21% 12 months to day, putting its market place price of $9.76 billion.

Obtain the total earnings report here.

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