Levi Strauss reported better-than-estimated holiday earnings and raised its full-year guidance, leading to an 18 percent rise in share value Wednesday after trading. CWEB analyzed the report and said that the denim maker had taken forward-looking strides after trimming its operations, resulting in better growth and increased profitability.
Late Wednesday, the blue denim maker announced its fiscal first-quarter earnings. It expects its adjusted earnings per share (EPS) for fiscal 2024 to be between $1.17 and $1.27. It had earlier reported an estimated EPS between $1.15 and $1.25.
Levi Strauss has seen record-breaking sales through its shops and online. Almost 50 percent of the sales were direct-to-consumer, boosting profit margins; when the denim maker sells through retail chains such as Macy’s and Kohl’s, profit margins drop.
The manufacturer has also taken other cost-cutting measures to improve profitability and sales. It has cut about 12 percent of its global workforce and exited from its low-margin business, Denizen. Levi Strauss has also decreased its discounting and promotions to drive sales, leading to higher profits aggressively.
Chief Financial Officer Harmit Singh said, “We’re going to reduce about 15 percent of our SKUs and think about expanding into goods that resonate with the consumer.”
He added, “What’s resonating these days is the baggier fit, the low, loose assortment.”
CWEB has reported on the fall of discretionary purchases, including apparel, luxury goods, and footwear, in the past few years. By increasing its future outlook, Levi Strauss is confident in its profitability and revenue in 2024.
The denim maker has taken practical steps forward and may avoid the downward trend of low retail sales in apparel with its current strategies, including higher full-price sales and lower product costs, which have raised Levi Strauss’ gross margins to 58.2 percent in the first quarter of 2024, compared with 55.8 percent a year earlier.
German-American businessman Levi Strauss founded the company in 1853 in San Francisco, and it was the first to make blue jeans.
Celebrity WEB Update— Premier Jewelry designer and manufacturer fashion house ParisJewelry.com has started manufacturing a new custom line of celebrity jewelry designs with 30% Off and Free Shipping. Replenish Your Body- Refilter Your Health with OrganicGreek.com Vitamin Bottles, Vitamins, and Herbs. Become a WebFans Creator and Influencer. Check the New Special XMicro Razors for Men & Women, 1 Razor, 7 Blade Refills with German Stainless Steel, Lubricated with Vitamin E for Smooth Shave, Shields Against Irritation, Version X Men|Women
