Levi Strauss Co. label is seen on clothes at the Woodbury Common Premium Outlets store in Central Valley, New York, United States, on February 15, 2022.
Andrew Kelly | Reuters
shares Levi Strauss Shares soared 18% on Thursday after the retailer raised full-year profit guidance and reported holiday earnings that beat expectations.
Levi’s reported first-quarter earnings Wednesday night and said it expects adjusted earnings per share in fiscal 2024 to be between $1.17 and $1.27, up from the previous range of $1.15 to $1.25.
Analysts had expected a forecast of $1.21 per share, according to data from LSEG (formerly Refinitiv).
As the retailer grapples with a slowdown in discretionary spending, it’s focused on what it can control: cutting costs and improving efficiency to boost profits.
In January, Levi’s unveiled a move aimed at accelerating profitable growth and saving costs. As part of the project, Levi’s laid off approximately 12% of its global workforce. It also exited its lower-margin Denizen business and relied less on deep discounts to drive sales.
The company also saw record sales online and in its own stores rather than through department stores such as macy’s department store and Kohl’sthe profit margin is lower.
“The benefits of our Project Fuel initiative are just beginning to emerge, which will continue to increase the agility and efficiency of our business,” Finance Chief Harmit Singh said on a conference call with analysts. “We will also continue to leverage inventory and working capital management to deliver positive free cash flow.”
This quarter, reduced promotional activities and lower product costs helped Levi’s gross profit margin increase by 2.4 percentage points to 58.2% from 55.8% in the same period last year.
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