Levi Strauss Shares Gain After Q2 Results Beat Expectations, Raised Dividend

Levi Strauss Shares Gain After Q2 Results Beat Expectations, Raised Dividend
  • Levi Strauss & Co. LEVI reported second-quarter FY22 revenue growth of 15% year-over-year to $1.5 billion, +22% on a constant-currency basis, beating the consensus of $1.43 billion.
  • Global DTC net revenues +16% Y/Y, reflecting a 23% increase in company-operated stores.
  • Wholesale net revenues +15% Y/Y, and global digital net revenues grew ~20% Y/Y.
  • Adjusted EPS was $0.29 (+26.1% Y/Y), beating the consensus of $0.23.
  • The adjusted gross margin was 58.2%, flat compared to 2Q21.
  • The Operating margin was 5.2%, and the Adjusted EBIT margin of 9.9%, up from 9% in 2Q21.
  • The company recorded Russia-Ukraine charges of $60 million ($0.15 per diluted share) related to the crisis.
  • Levi’s cash and cash equivalents stood at $602 million at the end of the quarter. Total inventories increased 29% Y/Y. Net debt was $306.1 million.
  • Cash from operations YTD was $145.88 million compared to $248.02 million in 2Q21. Adjusted free cash flow was $25.4 million.
  • Dividend: LEVI raised its quarterly dividend to $0.12 per share from $0.10/share, payable in cash on August 17, 2022, to the holders of record of Class A common stock and Class B common stock at the close of business on August 1, 2022.
  • FY22 Guidance reaffirmed that LEVI expects net revenue growth of 11% to 13% compared to FY21, which is between $6.4 billion and $6.5 billion (vs. consensus of $6.43 billion); and adjusted diluted EPS of $1.50-to-$1.56 (vs. consensus of $1.55).
  • Price Action: LEVI shares are trading higher by 4.39% at $17.13 during the post-market session on Thursday.
  • Photo by manusama via Pixabay

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