Levi Strauss beat Wall Street's quarterly expectations on the top and bottom lines on Wednesday, leading the retailer to increase its guidance and its dividend.
The denim maker is now expecting full-year adjusted earnings per share to be between $1.46 and $1.52, up from a prior range of between $1.42 and $1.48. At the high end, that's ahead of expectations of $1.50 per share, according to LSEG.
Levi also raised its top line outlook and is now expecting full-year sales to rise between 7% and 7.5%, compared to a prior range of between 5.5% and 6.5%. That's ahead of expectations of 6.6%, according to LSEG. About half of that growth is expected to come from higher prices and the other half is expected to come from unit sales, said finance chief Harmit Singh.
Here's how Levi did in its second fiscal quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:
Despite the results, Levi's shares dropped more than 5% in extended trading.
The company's reported net income for the three-month period that ended May 31 was $87.3 million, or 22 cents per share, compared with $67 million, or 17 cents per share, a year earlier.
Sales rose to $1.56 billion, up about 8% from $1.45 billion a year earlier.
In an interview with CNBC, CEO Michelle Gass said the company's core consumer is proving to be resilient – even in the face of higher gas prices. She said about two-thirds of the quarter's sales growth came from units – not just higher prices – giving the company the confidence to raise guidance and its dividend.
"Our demand remains healthy," said Gass. "We're seeing strength across our key segments of consumers, so we have our core Levi's, but we're also seeing strength in signature, as well as our new premium blue tab."
