Key insights
- Levi Strauss (LEVI) shares jumped 10% after reporting better-than-expected Q1 results and raising its full-year outlook. The company's strategic shift towards direct-to-consumer sales and diversification beyond jeans, along with the Dockers brand sale, contributed to the positive results. The improved guidance and earnings beat signal potential for continued growth, boosting investor confidence in the apparel sector.
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Levi Strauss is back in positive territory for the year.
How'd it happen? Partly because of a jump this morning. Shares of Levi Strauss (LEVI) were up some 10% in recent trading after the apparel maker, known for its iconic denim, reported better-than-expected results for the first quarter after markets closed yesterday. The move extended a steady climb that began in mid-March.
Levi Strauss posted first-quarter revenue of $1.74 billion with adjusted earnings per share of 42 cents, both figures coming in above what analysts had forecast.
Levi's solid start to the year could improve investor confidence in the clothing company's ability to continue growing sales after tariff concerns pressured the stock last year.
"Our strategic transformation is translating into higher returns and more profitable growth, enabling us to convert more of our strong revenue growth into bottom-line profit," CFO Harmit Singh said in Tuesday's release.
The company also lifted its full-year outlook, with its new adjusted EPS forecast of $1.42 to $1.48 topping the analyst consensus. Sales growth is expected to come in between 5.5% to 6.5% this year, up from 5% to 6% previously.
Levi Strauss has looked to grow its direct-to-consumer sales and expand its product offerings beyond its blue jeans in recent quarters as it has looked to build on a resurgence in demand for denim. The company has made some strategic moves, completing its sale of the Dockers brand in the first quarter after announcing a sale to Authentic Brands Group for at least $311 million last May.
Levi Strauss also said it has started a search for a new CFO. Singh is set to stay on until a successor is found before transitioning to a special advisor role and then retiring.
With Wednesday's gains, Levi's shares are now up about 5% since the start of the year.