Levi Strauss raises profit forecast after tariff refunds — CNBC

Levi Strauss raised its full-year adjusted profit forecast after receiving tariff refunds, but lowered its expectations for net revenue growth. CNBC reports, citing the denim apparel maker’s quarterly results.

New profit forecast

Levi Strauss expects adjusted earnings per share for the fiscal year to range from $1.54 to $1.56. Its previous forecast was between $1.46 and $1.52 per share. According to LSEG, analysts had expected a figure ranging from $1.52 to $1.59 per share.

At the same time, the company narrowed its full-year net revenue growth forecast to 7%. Levi Strauss had previously projected growth of 7% to 7.5%. The tariff refunds added 16 cents to earnings per share, of which the company allocated 5 cents to support the business.

Third-quarter results

For the three months ended August 30, Levi Strauss reported net income of $168.6 million, or 43 cents per share. A year earlier, the company earned $218.1 million, or 55 cents per share.

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Revenue rose by about 4% to $1.61 billion, compared with $1.54 billion a year earlier. Adjusted earnings per share were 48 cents, while revenue came in slightly below analysts’ expectations of $1.62 billion. CNBC notes that it was impossible to compare adjusted earnings per share with Wall Street’s expectation of 36 cents.

In the Americas, quarterly net revenue rose 4%, although it declined 1% in the United States. Direct-to-consumer revenue increased 2%, while comparable sales remained nearly unchanged. This segment accounted for 45% of total net revenue, while wholesale revenue rose 6%.

Levi Strauss’ operating margin in the third quarter increased to 13.8%, from 10.8% a year earlier. According to the company’s estimate, the tariff refunds added 4.9% to operating and gross margins.