Levi Strauss & Co. posted first-quarter earnings and revenue that beat expectations. The company marketed more expensive jeans and t-shirts directly to customers.
Levi reiterated its fiscal 2022 outlook, assuming no severe worsening of inflation or global economic downturn.
Consumers have yet to switch to cheaper clothing, according to Levi CEO Chip Bergh.
Sales of higher-priced jeans and T-shirts, frequently straight to customers, helped Levi Strauss & Co. beat analysts’ expectations on Tuesday.
Levi also reiterated its fiscal 2022 outlook, assuming no severe worsening of inflation or global economic downturn. It factored in the recent decision to temporarily cease business in Russia, which accounts for around 2% of total sales.
Despite rising gas and grocery prices, Levi CEO Chip Bergh told CNBC that buyers haven’t switched to cheaper clothing. Consumer demand has remained high despite the company raising prices on some items to balance other business expenses, he noted.
Bergh said Levi is keeping a close eye on consumer demand, knowing economists are predicting a recession. “We’re not burying our heads,” the CEO remarked. “We will intervene if we detect a decline in demand.”
After a day of losses, Levi shares gained around 1.5% in extended trading.
According to Refinitiv’s survey of analysts, Levi outperformed Wall Street expectations for the three months ending Feb. 27.