Levi Strauss gives upbeat 2023 sales outlook as demand holds up


Adds 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)


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

More Related Articles

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.