|
Shares of Levi climbed 10% in extended trading on Tuesday after
the company said it would sell its Red Tab jeans collection at
500 Target Corp <TGT.N> stores by the fall of 2021, up from 140
currently. Levi also launched its products at some Dick's
Sporting Goods <DKS.N> stores.
Many analysts had expected apparel makers to take a hit from
coronavirus-driven closures of several department stores, but
Levi now plans to open new stores and invest in its
margin-driving online business, which grew 52% in the third
quarter.
"While growth in our direct consumer business will outpace that
of our wholesale channel, we continue to see opportunities to
reach new consumers with new and expanded wholesale
distribution," Chief Executive Chip Bergh said on an earnings
call.
Levi has also benefited from branching out into tops and women's
clothing, as strong demand for blouses, shorts and jeans
accounts for a major chunk of its online sales growth.
The company forecast a 14% to 15% decline in fourth-quarter
revenue, while analysts on average were expecting a 19.62% fall.
Levi projected profit per share to be between 14 cents and 16
cents, in line with estimates.
Gross margin came in at 54.3% of net revenues in the third
quarter ended Aug. 23, up from 53% last year, boosted by price
increases and strength in its direct-to-consumer channel.
Excluding items, San Francisco, California-based Levi earned 8
cents per share, versus estimates for a loss of 22 cents.
Net revenue declined about 27% to $1.06 billion, but beat
estimates of $822.3 million, according to IBES data from
Refinitiv.
(Reporting by Praveen Paramasivam in Bengaluru; Editing by
Devika Syamnath)
[© 2020 Thomson Reuters. All rights
reserved.] Copyright 2020 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
