Credit: REUTERS/ANDREW KELLYAdds shares, profit comparison
Jan 25 (Reuters) - Levi Strauss & Co LEVI.N forecast annual sales above Wall Street estimates on Wednesday, in a sign that demand for its jeans is holding up better than feared.
Shares of the denim maker were up nearly 8% in extended trading after it also topped fourth-quarter sales and profit estimates.
With shoppers now buying more office-friendly and non-denim bottoms such as formal trousers and cargo pants, analysts have flagged uncertainty around denim demand in the near-term, with Coresight Research expecting a drop in the U.S. jeans market in 2023.
However, Levi's said it saw more consumers shopping at its stores in the Americas and Asia, boosting its direct-to-consumer business.
The direct-to-consumer business accounts for 36% of the company's total revenue, according to UBS analyst Jay Sole.
That, coupled with higher prices of its jeans, helped Levi's project net revenues between $6.3 billion and $6.4 billion for fiscal 2023, compared with analysts' average estimate of $6.27 billion, according to Refinitiv IBES data.
Net revenue from Levi's other brands jumped 28% to $127 million in the reported quarter, helping the company cushion a blow from an 18% slump in sales in Europe.
The company said it expects full-year adjusted profit between $1.30 and $1.40 per share, in line with analysts' average estimate of $1.35 per share, as it grapples with currency pressures and elevated costs.
Levi's fourth-quarter net revenue of $1.59 billion edged past estimates of $1.57 billion, while adjusted profit of 34 cents per share topped expectations of 29 cents.
(Reporting by Deborah Sophia in Bengaluru and Kate Masters in New York; Editing by Maju Samuel)
((DeborahMary.Sophia@thomsonreuters.com;))
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