Jan 26, 2022
Levi Says Price Hikes Aren’t Scaring Away Denim Shoppers
(Bloomberg) -- Levi Strauss & Co. gave a stronger-than-expected sales outlook and said price hikes aren’t hurting demand for its clothes.
The denim company said Wednesday that it expects revenue in the range of $6.4 billion to $6.5 billion this year, topping the $6.37 billion average estimate of analysts surveyed by Bloomberg. Earnings excluding some items are projected to be $1.50 to $1.56 a share. Analysts were looking for about $1.52, on average.
Levi is seeing no signs of a slowdown despite inflationary headwinds that led the company to raise prices by about 10% across a range of apparel items in the fiscal fourth quarter ended Nov. 28. The optimism stands in contrast to the recent trend of companies giving glum outlooks.
“We’re feeling optimistic about the year ahead despite the inflationary pressures, despite the supply-chain challenges, because of the strength and the health of the Levi brand,” Chief Executive Officer Chip Bergh said in an interview.
Bergh anticipates that supply-chain disruptions will continue for the rest of the year. Supply constraints had a $50 million negative impact on last quarter’s results, offsetting an estimated 3% revenue benefit from Black Friday and the acquisition of Beyond Yoga.
“Costs are going up in general across the board,” Bergh said.
Shares of San Francisco-based Levi rose 3.1% at 4:44 p.m. New York time in extended trading.
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