Trading On margin

Why Levi Strauss shares are skyrocketing after hours

  • Levi Strauss & Co. LEVI announced second-quarter FY22 revenue growth of 15% year-over-year to $1.5 billion, +22% at constant currency, beating consensus of $1.43 billion of dollars.
  • DTC’s global net revenue +16% YoY, reflecting a 23% increase in company-operated stores.
  • Wholesale net revenue increased 15% year-over-year, and global digital net revenue increased approximately 20% year-over-year.
  • Adjusted EPS was $0.29 (+26.1% YoY), beating consensus of $0.23.
  • Adjusted gross margin was 58.2%, stable compared to 2Q21.
  • Operating margin was 5.2% and adjusted EBIT margin was 9.9%, compared to 9% in 2Q21.
  • The company recorded Russia-Ukraine charges of $60 million ($0.15 per diluted share) related to the crisis.
  • Levi’s cash and cash equivalents were $602 million at the end of the quarter. Total inventories increased by 29% year-on-year. Net debt was $306.1 million.
  • Year-to-date cash from operations was $145.88 million, compared to $248.02 million in 2Q21. Adjusted free cash flow was $25.4 million.
  • Dividend: LEVI increased its quarterly dividend to $0.12 per share from $0.10/share, payable in cash on August 17, 2022, to registered holders of Class A common stock and Class B common stock at the close of business on August 1, 2022.
  • FY22 Guidance reaffirmed that LEVI expects net revenue growth of 11% to 13% from FY21 to $6.4 billion to $6.5 billion (vs. consensus of $6.43 billion); and Adjusted Diluted EPS of $1.50 to $1.56 (vs. consensus of $1.55).
  • Price action: LEVI shares are trading up 4.39% at $17.13 in Thursday’s aftermarket session.
  • Photo by manusama via Pixabay