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Levi Strauss Boosts Projections Amid Strong Quarterly Results

Overview

In a recent report by Pedro Goncalves from Yahoo Finance UK, it was highlighted that shares of Levi Strauss (LEVI) experienced a notable increase during pre-market trading on Friday. This surge can be attributed to the U.S. denim maker raising its annual revenue and profit forecasts, driven by a quarterly performance that exceeded expectations. Furthermore, there is growing optimism regarding robust demand for Levi’s denim products, particularly in European markets, even amidst existing tariff uncertainties.

Impressive Quarterly Earnings

Levi Strauss reported a net income of $67 million (£49.5 million), translating to 17 cents per share, for the quarter that ended on June 1. This marks a significant improvement compared to the previous year’s net income of $18 million, or 4 cents per share, during the same period. Notably, when adjusted for one-off charges associated with restructuring and impairments, the earnings climbed to 22 cents per share, surpassing the analysts’ expectations of 13 cents, which were compiled by Bloomberg.

Revenue Growth Exceeds Expectations

The financial performance did not stop at earnings; revenue also demonstrated strong growth, amounting to $1.45 billion. This figure exceeded consensus estimates, which had predicted revenue of $1.37 billion. Direct-to-consumer sales saw an impressive uptick, growing by 11% on a reported basis, compared to an 8% growth observed a year earlier. Such performance indicates a solid demand trajectory for Levi’s products and reinforces the brand’s positioning in both domestic and international markets.

Increased Guidance Amid Cautious Outlook

In light of these positive results, Levi Strauss has raised its full-year financial projections. The company attributed these optimistic forecasts to the sustained strength of its core denim products and a notable improvement in performance across international markets. However, the company remains vigilant regarding potential shifts in trade policy under President Donald Trump, particularly concerning tariffs, which could affect their operations.

Anticipated Tariff Impact

Currently, Levi Strauss estimates that the anticipated tariffs will minimally impact its business, projecting an effect of $25 million to $30 million for the remainder of the year. This translates to an estimated 2 to 3 cents decrease in earnings per share. The company is navigating through this uncertain landscape with a focus on maintaining profitability while adapting to any changes in trade regulations.

Long-term Revenue Expectations

Looking ahead, Levi Strauss expects to see fiscal 2025 revenue grow within a range of 1% to 2%. This marks a notable adjustment from their previous forecast, which had predicted a decline of 1% to 2%. This positive shift in expectations reflects the company’s confidence in its brand resilience and market demand.

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