© Reuters. FILE PHOTO: Products are displayed at a Levi Strauss store in New York, U.S., March 19, 2019. REUTERS/Shannon Stapleton/File Photo
(Reuters) -Levi Strauss & Co forecast annual sales and profit above analysts’ estimates after topping quarterly results on Wednesday, bolstered by higher prices and strong demand for its jeans and jackets, sending its shares up 8% after the bell.
People shopping for casual outdoor clothing as pandemic restrictions eased and a resurgence in retro fashion styles such as high-rise and loose-fitting jeans have buoyed demand for the company’s denims.
The Signature and Levi’s (NYSE:) 501 jeans maker said it expects revenue between $6.4 billion and $6.5 billion in fiscal year 2022, compared with analysts’ estimates of $6.37 billion, according to Refinitiv IBES data.
The robust demand has, however, coincided with increased production and shipping costs, forcing companies to raise prices to offset the inflationary pressures.
Levi plans to raise prices further in 2022 and beyond, Chief Executive Officer Chip Bergh said on a call with analysts, adding that demand outstripped supply in the quarter due to supply chain snarls.
Lower promotions, more full-price selling and the reopening of its European and Asian markets also lifted the Denizen brand owner’s sales in the reported quarter.
Compared to pre-pandemic levels, Asia net revenue was flat in the three months ended Nov. 28, recovering from a 23% slump reported in the third quarter.
Net revenue rose 22% to $1.69 billion in the fourth quarter, edging past analysts’ estimate of $1.68 billion.
Excluding items, Levi earned 41 cents per share, a cent above expectations.
Holiday season sales came in above its expectations, the company said, in contrast to downbeat estimates from retailers including Lululemon Athletica (NASDAQ:) Inc and Abercrombie & Fitch Co.
San Francisco-based Levi expects adjusted full-year profit per share between $1.50 and $1.56, compared with estimates of $1.52.
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