Key Takeaways:
Levi Strauss & Co. reported first-quarter revenue of $1.7 billion, a 14 percent year-over-year increase that beat Wall Street expectations and prompted the company to raise its full-year outlook.
"The denim category remains healthy," Michelle Gass, President and CEO of Levi Strauss & Co., said during the company’s earnings call, adding that the brand is "fueling that growth through all the innovation and fashion cycles we’re bringing.”
The strong results prompted Levi's to lift its full-year revenue growth forecast to a range of 5.5 to 6.5 percent, an increase from the previous guidance of 5 to 6 percent. While the company did not disclose the specific stock price reaction to the earnings, the stock has gained 56 percent over the past 12 months.
Growth in the quarter was largely attributed to the continued popularity of looser denim fits and new fabric technologies. The women’s segment saw strong sales from new baggy variations, while the company introduced its first men's barrel jean. A notable exception to the baggy trend was the women’s 517 bootcut jean, which saw sales increase by 25 percent in the first quarter.
The company also highlighted the launch of its 501 Thermodapt, a climate-adapting fabric using hollow-core cotton yarn for all-season temperature regulation. Beyond denim, categories like tops, dresses, and sweaters accounted for approximately one-fourth of the brand's revenue growth.
The updated guidance suggests management is confident that its product strategy, which includes a higher percentage of globally directed assortments, will continue to drive growth. Investors will be watching the next earnings call for details on margin expansion and performance of the direct-to-consumer segment.
This article is for informational purposes only and does not constitute investment advice.
