Levi Strauss & Co. ( NYSE: LEVI ) stock gained sharply after hours on Wednesday after the denimwear company notched stronger than expected Q4 profits and promoted an optimistic outlook for 2023.
For the fourth quarter , the San Francisco-based apparel manufacturer notched $0.34 in adjusted diluted EPS, above the $0.30 expectation. Meanwhile, net revenues of $1.6B came in narrowly above the $1.59B Wall Street consensus. While adjusted gross margin recorded at 55.8% represented a 230 basis point contraction from Q4 2021, it remained 150 basis points above Q4 2019.
"In 2022, we delivered strong, profitable growth as well as significant market share expansion, demonstrating the enduring strength of our brands, the diversity of our business and our team’s focused execution of our strategic plan," CEO Chip Bergh commented. “Our high margin DTC business is delivering exceptional results and our diversification efforts provide additional growth drivers for sustainable long-term growth.”
DTC net revenues excluding Russia jumped 10% on a constant-currency basis from the prior year quarter, growing to 31% of revenues for the quarter. However, management noted an 8% currency impact on the business in addition to Russia-related headwinds.
Moving forward, the company anticipates net revenues between $6.3B and $6.4B, implying upside to the $6.27B consensus. Adjusted diluted EPS guidance between $1.30 to $1.40 is also in-line with the $1.35 analyst consensus.
Shares of Levi Strauss ( LEVI ) leapt 6.94% shortly after the print.
Elsewhere, the company named Harmit Singh as its new CFO and Chief Growth Officer.
“Harmit has been a trusted partner and an integral part of this company for the past ten years,” Bergh said. “Last year, he served as the key architect behind the five-year growth plan laid out at our Investor Day, and his expanded role will enable more direct control to execute against our strategic initiatives.”
Bergh himself is slated to cede the CEO role to former Kohl’s CEO Michelle Gass over the next 18 months .
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Levi Strauss stock surges on profit beat, bullish guidance