Levi Strauss on Wednesday raised its profit outlook after receiving tariff refunds, but gave less optimistic revenue guidance. The denim retailer raised its full-year fiscal-year adjusted earnings per share expectation to between $1.54 and $1.56, from a previous range of $1.46 to $1.52. Analysts expected a range of between $1.52 and $1.59, according to LSEG. The company also lowered its full-year net income growth guidance to 7%, the bottom of its previously provided range of a 7% increase to 7.5%. Levi’s shares were broadly flat in extended trading after initially rising. For its fiscal third quarter, the denim retailer said it saw a 4% increase in net revenue in the Americas, although U.S. revenue declined 1%. It also reported an operating margin of 13.8% for the quarter, compared to 10.8% in the same quarter last year, driven by fee refunds that contributed 4.9% to operating margin and gross margin. Levi also said its fee refunds contributed a 16-cent benefit to its earnings per share, of which 5 cents were “redistributed to support the business.” He did not specify how he invested that money. Here’s how Levi performed in its third quarter compared to what Wall Street expected, according to a survey of analysts by LSEG: Earnings per share: Adjusted 48 cents, it was unclear how that figure compares to the 36 cents Wall Street expected. million, or 43 cents per share, down from $218.1 million, or 55 cents per share, a year earlier. Sales rose about 4% to $1.61 billion from $1.54 billion last year. Levi said direct-to-consumer net revenue rose 2% in the quarter, but comparable sales remained roughly stable. DTC accounted for 45% of total net revenue in the third quarter, the company said. On the other hand, wholesale revenue increased 6% during the quarter. “While our direct-to-consumer business did not meet our internal expectations, we acted quickly to address the shortfall and are encouraged by the strength we are seeing heading into the holiday season, including in the U.S.,” CEO Michelle Gass said in a statement. “Based on the acceleration of recent trends, our DTC business is on track to deliver mid-single-digit growth in the fourth quarter.” The company previously said it has been seeing broad-based growth across all of its business segments, including its flagship Levi’s and its premium blue tab.
