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Levi Strauss & Co. raised its revenue outlook, with the maker of 501 jeans expecting sales growth to outweigh the impact of President Donald Trump’s tariffs.
The shares jumped as much as 9 percent in extended New York trading.
The company now sees revenue up between 1 and 2 percent for the current fiscal year — above the average analyst estimate and up from a previous view that sales would decline 1 to 2 percent. Levi also slightly lowered its guidance for gross margin due to tariffs, which the company factored in as 30 percent for products imported from China and 10 percent for the rest of the world.
The results suggest that efforts to branch into new products and categories — part of the company’s focus on what it calls “head-to-toe denim lifestyle” — are paying off. Led by chief executive officer Michelle Gass, Levi has sought to expand its offerings, which include everything from caps to aprons. It’s collaborating with Nike Inc. to sell denim Air Max 95 sneakers, while looking to boost sales through its own stores and website.
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Tariffs’ impact on profitability, excluding mitigation efforts, is expected to be $25 million to $30 million through the end of the year, Levi’s chief financial and growth officer Harmit Singh told Bloomberg News in an interview.
Revenue for the quarter ended June 1 rose 6 percent to $1.4 billion, beating the average estimate of analysts. On an annual basis, sales grew for a fifth straight quarter, while Wall Street had expected a decline.
Earlier this year, Levi was one of the first big apparel companies to report earnings after Trump announced sweeping tariffs on April 2. The company’s previous guidance didn’t factor in tariffs, but since then, a number of competitors have flagged tariffs’ impact along with general consumer caution. American Eagle Outfitters Inc. pulled its guidance altogether, citing discounting and excess inventory among other issues, while shares of Gap Inc. plunged in late May after the company projected a tariff impact of as much as $300 million.
By Lily Meier
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Levi Strauss Beats Quarterly Sales Estimates on Steady Denim Demand
The denim brand posted a 3 percent rise in reported quarterly revenue, exceeding analysts’ expectations of a 1 percent loss.
