Levi Strauss & Co. gave a stronger-than-expected sales outlook and said price hikes aren’t hurting demand for its clothes.
The denim company said Wednesday that it expects revenue in the range of $6.4 billion to $6.5 billion this year, topping the $6.37 billion average estimate of analysts surveyed by Bloomberg. Earnings excluding some items are projected to be $1.50 to $1.56 a share. Analysts were looking for about $1.52, on average.
Levi is seeing no signs of a slowdown despite inflationary headwinds that led the company to raise prices by about 10 percent across a range of apparel items in the fiscal fourth quarter ended Nov. 28. The optimism stands in contrast to the recent trend of companies giving glum outlooks.
“We’re feeling optimistic about the year ahead despite the inflationary pressures, despite the supply chain challenges, because of the strength and the health of the Levi brand,” chief executive officer Chip Bergh said in an interview.
Bergh anticipates that supply chain disruptions will continue for the rest of the year. Supply constraints had a $50 million negative impact on last quarter’s results, offsetting an estimated 3 percent revenue benefit from Black Friday and the acquisition of Beyond Yoga.
“Costs are going up in general across the board,” Bergh said.
Shares of San Francisco-based Levi rose 3.1 percent at 4:44 p.m. New York time in extended trading.
By Jordyn Holman
Denim is among the most popular materials in fashion, but it’s wasteful to manufacture and difficult to recycle. Brands ranging from global giant Levi’s to tiny MUD say they are closer than ever to solving this problem.