Levi Strauss & Co. jumped after its first quarterly report as a public company impressed investors.

Key Insights

• Levi’s executives pitched the IPO to investors as a growth story, and the results back that narrative up. One of the main drivers is expected to be its push into categories beyond jeans, like tops and footwear. In its conference call, the company said tops grew 28 per cent in the period.
• The other growth engine is expected to be Asia, and specifically China, where Levi has a relatively small business but sees big opportunity. Revenue from that region rose 8 percent to $253 million -- marking rapid growth for what’s still the company’s smallest region.
• Levi said it will open nearly 100 new company-operated stores this year. Chief Executive Officer Chip Bergh said the majority of the store openings will be in Europe and Asia, though both mainline and outlet stores will open in the U.S., too.
• “We’ve got a good model, it’s very profitable and we will continue to expand in those markets,” he said.
• The jeansmaker had been cutting costs to improve margins in the run up to going public. Last quarter, gross margin narrowed slightly from a year earlier to 54.6 per cent, but it sees improvement ahead: Levi says its constant-currency adjusted EBIT margin will be flat-to-slightly up this year, better than the “roughly flat” it had estimated in February.