Levi Strauss raises prices, helping to boost profit and outlook

Core Insights - Levi Strauss's profits exceeded Wall Street expectations due to targeted price increases and a shift away from wholesalers [1][4] - The company reported a gross margin increase of 1.1 percentage points to 61.7%, surpassing analyst expectations [2][8] - Levi's raised its full-year sales outlook to a 3% increase, up from a previous guidance of 1% to 2% growth [7] Financial Performance - Net income for the quarter ending August 31 was $218 million, or 55 cents per share, compared to $20.7 million, or 5 cents per share, a year earlier [6] - Sales rose to $1.54 billion, a 7% increase from $1.44 billion in the previous year [6][10] - Adjusted earnings per share were 34 cents, exceeding the expected 31 cents [10] Strategic Initiatives - The company is focusing on direct-to-consumer sales, which grew 11% during the quarter, and expanding its product range beyond jeans [11][12] - Women's clothing sales increased by 9%, contributing to the overall growth [12][13] - Non-denim items now account for nearly 40% of the business, indicating a successful diversification strategy [13] Market Outlook - Levi's expects its operating margin to be between 11.4% and 11.6%, aligning with market expectations [8] - The company anticipates a gross margin increase of 1 percentage point, returning to its original outlook before factoring in tariffs [9][8] - The outlook remains contingent on the stability of U.S. tariffs on imports from China and other duties [9]