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(Reuters) -Levi Strauss & Co beat third quarter income and profit estimates on Wednesday, boosted by increased demand for jeans from people who refresh their wardrobes as they resume social life normal after the easing of the pandemic restrictions.
Shares of the jeans maker rose 2% in extended trading after brand owner Dockers said his board of directors approved a $ 200 million share buyback plan. The company has a market capitalization of $ 49.49 billion, according to data from Refinitiv.
With schools and offices reopening and people even going on vacation, as cases of coronavirus infections tend to drop, many are splurging on new clothes.
Levi, which has grown into major retailers including Target Corp and Nordstrom Inc, has also benefited from a reopening of the economy in its European markets and investments in its direct-to-consumer business.
Analysts expect Levi to face less supply pressure than his peers due to his minimal reliance on Vietnam, a garment manufacturing hub that has seen several factories shut down due to COVID outbreaks. 19 and less use of the congested west coast port.
“We have taken pricing action and believe we have pricing power to ease inflationary pressures,” CFO Harmit Singh said in a statement.
The company’s net sales reached $ 1.5 billion, from $ 1.06 billion in the third quarter ended Aug. 29. Analysts were expecting an average of $ 1.48 billion, according to IBES data from Refinitiv.
Excluding items, Levi gained 48 cents per share, beating estimates of 38 cents per share.
The company said it expects holiday quarter net revenue growth of 20% to 21% from the previous year, while analysts expected growth of 22%.
Levi also said he expects fourth-quarter earnings per share to be between 38 and 40 cents per share, against an average analyst expectation of 40 cents per share.
(Reporting by Reshma Rockie George and Praveen Paramasivam in Bengaluru; editing by Shinjini Ganguli)
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