Levi Strauss Stock: Europe Drives Surprising Growth

Levi Strauss has significantly exceeded analyst expectations in its latest quarterly report, sending shares up approximately 7% to $21.11 in after-hours trading. The denim giant posted earnings per share of 22 cents, substantially outperforming the projected 13 cents, while quarterly revenue reached $1.4 billion against forecasts of $1.37 billion. This impressive performance prompted management to raise its annual outlook, now anticipating earnings per share between $1.25 and $1.30 for fiscal year 2025, surpassing the analyst consensus of $1.23. The company's European operations have emerged as a particular bright spot, with regional net sales increasing by 14% compared to a 2% decline in the previous year. The direct-to-consumer business also showed strong momentum with 11% growth.

Navigating Trade Tensions

Despite ongoing trade tensions between the US and China placing pressure on the textile industry, Levi Strauss has demonstrated remarkable resilience. The company has already factored 30% tariffs on Chinese imports and 10% on goods from other countries into its planning. Chief Financial Officer Harmit Singh attributed the improved guidance to strong first-half performance and continuing business momentum. Analysts remain optimistic, noting the company's balanced strength and strategic shift toward higher-quality products and distribution channels. The diversified supplier network has proven valuable in mitigating the effects of trade conflicts, allowing the company to adjust its annual forecast from an expected 1-2% revenue decline to projected growth in the same range.

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Source StockWorld