Levi Strauss & Co beat Q3 revenue and profit estimates with more consumers resuming their social lives and updating their wardrobes.
The denim retailers, which has a market cap of $49.49 billion, saw an uptick in demand with the reopening of schools and offices and consumers embracing casual wear. The company also benefitted from investments it has made in its direct-to-consumer business, the reopening of European markets and the company’s decision to expand at major retailers such as Target and Nordstrom.
The company saw its net revenue climb to $1.5 billion in the quarter ending August 29, up from $1.06 billion a year before. In addition, the revenue was higher than the $1.48 billion analysts had expected. As a result, Levi earned 48 cents per share, higher than analysts’ estimates of 38 cents per share.
The results prompted the company’s board to approve a $200 million share repurchase program, sending the company’s stock 2 percent up in extended trading hours.
Looking ahead, the company is optimistic about holiday season sales, although analysts were expecting slightly better results. Levi is projecting growth of 20 percent to 21 percent higher than last year and Q4 share earnings to be between 38 cents to 40 cents, Reuters reported.
Analysts expect the company to face relatively fewer supply chain issues, primarily because it is less reliant on Covid-battered Vietnam for manufacturing and lower usage of California’s congested ports.
“Our supply chain really is a source of competitive advantage,” CEO Chip Bergh said. “We can move product around with a lot of agility. … We’ve been running the business against different scenarios for the last 18 months.”