Key Points

- Levi Strauss (LEVI) Q1 earnings and revenues surpass estimates
- Levi's D2C captures 48% of revenue amid improvements to eCommerce experience
- Levi Strauss nudges profit forecast higher following cost cuts, and shares are rallying
- Levi Strauss stock pops on earnings beat and higher guidance
- Levi Strauss swings to quarterly loss, lifts full-year guidance

Levi Strauss & Co. (LEVI) recently released its first-quarter earnings report, providing insight into the company's performance in the quarter ended February 2024. While the headline numbers give a general overview, it is essential to compare some of its key metrics to Wall Street estimates and the year-ago actuals.

The company reported quarterly earnings of $0.26 per share, surpassing the Zacks Consensus Estimate of $0.21 per share. This is a significant improvement from the $0.34 per share earnings reported a year ago. Levi's direct-to-consumer (D2C) business has been gaining share, with transformations to shoppers' digital journeys resulting in strong eCommerce growth.

Despite an 8% year-over-year drop in overall net revenue, Levi's D2C business captured 48% of revenue, showcasing the company's successful improvements to the eCommerce experience. The company also announced that net revenue in the Americas dropped by 11% in the first quarter of fiscal 2024.

Following cost cuts and optimism from executives on the demand for both new and older products in the U.S. and abroad, Levi Strauss & Co. has raised its full-year profit forecast. This positive outlook has led to a rally in the company's shares, with a more than 6% gain after Wednesday's closing bell.

The company's adjusted earnings per share (EPS) of $0.26 for the quarter ended February 25, 2024, exceeded estimates of $0.20. Levi Strauss also posted a quarterly loss due to a restructuring charge but raised its outlook for the year as it shifts its business model toward its direct-to-consumer channel to offset declining wholesale sales.

With nearly half of its sales now coming from its own website and stores, Levi Strauss is experiencing a major shift as department stores fade. This shift has been a significant factor in the company's improved performance and higher profit forecast.

In summary, Levi Strauss & Co.'s first-quarter earnings report has exceeded expectations, with strong performance in its direct-to-consumer business and a positive outlook for the full year. The company's successful cost-cutting measures and strategic shift toward eCommerce have contributed to its improved financial results and higher profit forecast.

For more information:

Up/Down Rally

Price Distribution

Analyst Recommendations

Earning Price Impact Analysis

Seasonality