Levi jeans share price jumps over solid Q1 earnings
US jeans maker Levi Strauss’ share price moved sharply higher after the company posted better than expected earnings during its first earnings report to investors. The apparel giant had a successful IPO on the New York Stock Exchange last month as the Levi Strauss brand makes a come back with a new generation of jeans-wearers.
Levi’s first-quarter report revealed that its net revenue increased to $1.4 billion, which was seven percent higher compared to the same period last year. The company’s earnings also jumped to $147 million, which marked a considerable improvement from the $19 million loss seen during the first quarter of 2018.
The brand also confirmed that for the rest of this fiscal year it expects mid-to single-digit revenue growth, taking into account any adverse effects from currency fluctuations. Levi Strauss & Co also expects that the company’s profit margins will increase slightly or remain flat.
Investors also cheered the news that the company expects to open one hundred new Levi Strauss & Co shops worldwide this year. Levi CEO Chip Bergh attributed the stronger than expected numbers to ongoing growth in emerging markets such as India and Asia. He also confirmed that Levi’s experienced strong growth in ladies jeans, with the company’s focus on women paying-off. A double-digit increase in quarter-on-quarter sales in women’s jeans and over twenty-five percent growth in sales of women tops further underscored the importance of Levi’s pivot to women’s clothing.
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The recent good fortunes of the one-hundred and sixty-six-year old company saw it have one of the most successful initial public offerings in recent years. Levis Strauss & Co share price opened well above its initial IP range, with the stock eventually moving well above the $20.00 threshold.
The NYSE and the Dow Jones Industrial Average both managed to post minor gains on Wednesday, as the FOMC minutes showed that US policymakers were unlikely to hike interest rates anytime soon. The Dow Jones has many laggards currently weighing on sentiment, such as Boeing, although the index remains fairly robust as it trades towards the best levels of 2019.
Written by Nathan Batchelor, External Analyst
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