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Levi Strauss (LEVI) posted a profit for the first quarter following, for the first time since its IPO last month.
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Levi's earnings per share is set at 37 cents, up from a loss of 5 cents a share a year ago, which has had a transitory impact since the 2017 law on the reduction of the company's share price. tax on employment and job creation. Adjusted net income jumped 81% to $ 151 million.
Wall Street badysts did not publish an estimate of Levi's profits.
Revenues increased 7% to $ 1.435 billion. In the Americas, net sales grew 9% or 10% in constant currencies. In Europe, the turnover grew by 3%, or 10% in constant currency. In Asia, revenues increased by 8%, or 14% in constant currency. Revenue from direct sales to consumers increased 10% due to growth in the retail network and e-commerce.
The company has recorded net sales growth in constant currencies during the fiscal year between 2% and 5%. Management also expects capital expenditures of $ 190 million to $ 200 million in a full year and nearly 100 new store openings operated by the Company.
"We recorded our sixth consecutive quarter of double-digit revenue growth in constant currencies," said CEO Chip Bergh. "Growth has been widespread in all three regions and all channels, demonstrating that our strategies are working and our investments are paying off."
Since 2011, Levi's profits have grown at a compound annual rate of 11.3% and net profit has reached $ 285 million in fiscal 2018. The turnover has increased to a level compound annual rate of 2.3% and reached $ 5.6 billion in 2018. The Americas accounted for 55% of sales, Europe accounted for 29%; and Asia, including the Middle East and Africa, contributed 16%.
At the same time, jeans sales in the industry rose 2.2% to $ 16.7 billion last year, after four consecutive declines, according to Euromonitor data. Denim also recorded a strong increase in clothing sales during the last holiday season, while the market tracker, NPD Group, saw signs of slowing market growth, while jeans and boots bounced.
Levi Stock
Shares rose 1.7% late after closing up 2.7% to 21.88 on the stock market today. The Levi action peaked at 24.19 on April 1, but struggled to maintain momentum. It has not yet formed a basis for IPO.
Levi's shares exceeded expectations on its IPO, as stocks jumped 32% on the first day of trading. Another indication of the demand is that the IPO itself was oversubscribed and ended up costing $ 17 the action, above expectations.
The stock verification tool shows that Levi shares have poor fundamentals. That's why it has an IBD composite rating of 46. Levi's earnings have improved, with EPS rising an average of 133% over the past three quarters. However, the growth rate of BPA over three years is only 4%.
In addition to jeans, Levi makes casual and dress pants, tops, shorts, skirts, jackets, shoes and accessories. Its brands include Dockers, Denizen and Signature.
VF Corp. (VFC), which plans to sell its jeans brands, fell 1.3%. Jeans retailer American Eagle Outfitters (AEO) lost 2.5%.
IPO Stock In Trend
Baird badyst Matt Tingler said denim may be back in fashion at a convenient time for Levi's actions.
"Levi's IPO shows that the denim category is in favor of investors and not dead, as many people think." Denim was attacked by sportswear while consumers, especially women, have abandoned their clothes, "he said last month. "There are signs, however, that denim is beginning to resurface, coincidentally, to the detriment of sportswear."
Mr Tingler also said that the IPO stock offers good opportunities if he can tap his brand into the lucrative market of Asia. A strong presence would increase Levi's profits. He also pointed out that Levi's good performance could bode well for other established names who have fallen out of favor.
"A pickup in Levi's will also be a sign of consumer interest for the historic brands." Levi's, just as Champion, who experienced exceptional growth, had fallen in disgrace for newer and more modern brands such as Paige, Citizens for Humanity, Fidelity and other denim brands in recent years, "he said.
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