Iconic American blue jean maker Levi Strauss & Co. released better than expected third quarter earnings with revenue growth in Europe up 34%. However Americas revenue fell by 3% with lower gross margins.
Levi Strauss & Co. NYSE: LEVI Reported Earnings After Close Tuesday
$0.31 EPS Beat $0.28 Expected And $1.45 billion Revenue Beat $1.44 Expected
Earnings
Levi Strauss and Co. reported revenue in the third quarter of fiscal 2019. Net income totaled $124.5 million, or 30 cents per share, compared with $130.1 million, or 33 cents per share, last year. Adjusted EPS of 31 cents beat the 28-cents FactSet consensus. Revenue totaled $1.45 billion, up from $1.39 billion last year and ahead of the $1.44 billion FactSet guidance. Operating income surged 8% compared to the third quarter of 2018 to reach $171 million.
Levi Strauss & Co. NYSE: LEVI
Market Reaction: After hours $18.70 −0.26 (-1.37%)
Highlights
“"We delivered strong third-quarter results and remain on-track to achieve our full-year expectations," CEO Chip Bergh stated. "Our strategies to diversify to faster-growing, high-opportunity, high gross margin businesses continue to drive momentum, as we again grew revenues double-digits internationally, in our direct-to-consumer business, and in the women’s and tops categories," he added..
- Largest growth in Europe, with net revenues up 14% to $463 million and operating income skyrocketed 34% to $103 million.
- Americas revenue fell by 3% to $771 million and operating income dropped 7% to $152 million. Gross margin 53% of sales vs. 53.5% consensus and down 20 bps from a year ago.
Outlook
"As for the fourth quarter, we again expect strong performance in international, direct-to-consumer, women's and tops, and improved comparisons for U.S. wholesale," Levi's Chief Executive Chip Bergh said in a statement.
Levi Strauss affirms 2019 expectations for revenue growth of 5.5% to 6.0% and flat gross margin compared to a year ago.
Levi Strauss IPO
Levi Strauss went public for a second time on March 21, 2019. The 166-year old company first went public in 1971, but has been a private company for the last 34 years. Levi Strauss & Co. began trading at $22.22 a share, after having priced its initial public offering at $17 a share the night prior.
The stock surged more than 30% on its first day of trading. Levi closed at $21.88 on Tuesday ahaed of earning.
Source: Traderscommunity, AlphaStreet
