Image source: Levi Strauss
(Reuters) – Levi Strauss & Co on Thursday raised its half-year revenue growth forecast, banking on COVID-19 vaccine rollouts to spur a return to normalcy, after the denim maker beat estimates for quarterly results on a pandemic-led e-commerce boost.
Shares in the company rose 5% in extended trading, as it also raised its quarterly dividend to 6 cents per share from 4 cents.
Many apparel sellers, including Nike Inc and Kohl’s Corp, have also expressed similar optimism about store traffic rebounding to normal levels, even as online sales have boomed amid the health crisis in recent months.
“As the vaccine rollout continues and consumer excitement returns, I am more confident than ever that we will emerge from the pandemic a stronger business,” Levi Chief Executive Officer Chip Bergh said.
Levi said more than 40% of its European stores were closed as of Thursday, with the rest operating on reduced hours due to lockdown restrictions.
The jeans maker said it expected its revenue to increase 24% to 25%, up from a prior range of 18% to 20%, for the first half of its fiscal 2021.
Levi also said it expected adjusted per-share profit for the period to be 41 cents to 42 cents. Analysts on average expect a profit of 30 cents per share for the first and second quarter, according to IBES data from Refinitiv.
Net revenue fell about 13% to $1.31 billion for the first quarter ended Feb. 28, but came in above analysts’ expectations of $1.25 billion.
Digital revenue, which includes sales from Levi’s wholesale partners, rose about 41% and more than made up for a drop in physical store visits due to pandemic.
On an adjusted basis, Levi earned 34 cents per share, above analysts’ estimates of 25 cents.
Reporting by Praveen Paramasivam in Bengaluru; Editing by Ramakrishnan M.