Levi Strauss reported better-than-expected third-quarter results, with profits growing faster than analysts predicted, thanks to strategic price increases and a shift away from wholesalers. The company’s gross profit margin rose to 61.7%, exceeding expectations of 60.7%. CEO Michelle Gass noted that while raising prices on some jeans and clothing, demand remained strong, allowing them to apply “surgical” pricing strategies while maintaining brand value.
For the quarter ending August 31, Levi’s net income was $218 million, or 55 cents per share, compared to $20.7 million, or 5 cents per share, a year earlier. Revenue reached $1.54 billion, marking a 7% increase. The company raised its full-year sales outlook to a 3% increase, up from 1-2%, despite overall cautiousness due to macroeconomic factors.
Direct-to-consumer sales saw an 11% increase, particularly from strong U.S. markets, and women’s sales grew by 9%. Alongside denim offerings, Levi’s has been expanding its product range to mitigate risks associated with changing fashion trends, with non-denim items now making up nearly 40% of its business.
Despite the positive financial results, the stock price fell over 6% in extended trading.
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