Pedro Goncalves writes:
Shares in Levi Strauss (LEVI) rose in pre-market trading on Friday after the US denim maker lifted its annual revenue and profit forecasts, buoyed by stronger-than-expected quarterly result and bets for strong demand for its denims in regions such as Europe in the face of tariff uncertainty.
The company reported net income of $67m (£49.5m), or 17 cents per share, for the quarter ending 1 June, up from $18m, or 4 cents per share, in the same period last year. On an adjusted basis, excluding one-off charges tied to restructuring and impairment, earnings were 22 cents per share, ahead of the 13 cents forecast by analysts surveyed by Bloomberg.
Revenue also beat expectations, reaching $1.45bn, compared with consensus estimates of $1.37bn. Direct-to-consumer sales grew 11% on a reported basis, accelerating from 8% a year earlier.
Levi raised its full-year guidance, citing the strength of its core denim offering and improving performance in international markets. The company is, however, keeping a cautious eye on trade policy developments under president Donald Trump, particularly regarding tariffs.
As policy currently stands, it anticipates tariffs will only impact the business by $25m to $30m for the rest of the year, or 2 to 3 cents on earnings per share.
The company expects fiscal 2025 revenue to grow in the range of 1% to 2%, compared with a prior forecast of a 1% to 2% decline.