Apparel and footwear maker Lévi-Strauss (LEVI.US) is gaining more than 15% today, as the company presented earnings forecasts. The stock is trading at its second-best session ever today, as investors are impressed by the company's sales performance, without middlemen. Levi's has launched its own online e-commerce platform, and direct sales (DTC) significantly increases the profitability of the company, which does not have to use middlemen, while saving costs and offering merchandise at an attractive price, without additional wholesale margins.
- This situation comes after department stores like Kohl's and Macy's suspended wholesale sales of Levis apparel. According to the company's financial report, the DTC sales channel accounted for almost half of total revenue in Q1. In the report, the company raised its profit forecast, citing plans to increase sales and operational savings. Levi's expects profit in 2024 to grow in the range of 1 to 3%.
- The company reported a $10.6 million loss ($0.03 per share) in Q1, compared to a $114.7 million profit ($0.29 per share), in Q1 2023. However, the result was affected by a one-time restructuring charge of $116 million. Direct sales rose 8% y/y and 10% k/k. The company's CEO indicated that jeans sales in the country are stabilizing at satisfactory levels, and pointed to a rebound in wholesale demand, in Europe.
Levi&Strauss shares (LEVI.US, D1 interval)
The shares of apparel and footwear manufacturer Levi's are gaining more than 15% today and have broken above the 38.2 Fibonacci retracement of the 2021 downward wave. The next resistance level is around $24 per share.
Source: xStation5
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