Levi stock extends gains on Q1 earnings beat, 2024 guidance

Levi Strauss & Co. (LEVI) continues to climb higher in pre-market trading after reporting positive first-quarter earnings results on Wednesday, revealing in-line revenue figures of $1.56 billion and gains of $0.26 per share. The apparel company also raised its full-year guidance for 2024.

Morning Brief anchors Brad Smith and Seana Smith weigh in on the action surrounding Levi's stock and its outlook.

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Editor's note: This article was written by Luke Carberry Mogan.

Video Transcript

SEANA SMITH: Shares up nearly 14% in the pre-market shares, moving higher after the company beat the Street's expectations on both the top and bottom line. Now, that beat was driven by a jump that we saw in margins amid its cost-cutting efforts. We've talked to the CFO about those cost-cutting efforts over the last several quarters. The company also raising its fiscal 2024 guidance. That's a big reason why we're seeing this huge jump here in the pre-market.


But when it comes to these results, the Street also very optimistic about what they are hearing from Levi's. Morgan Stanley, one of the analysts that team out saying that management stood out positively, especially when you compare it to some of the disappointing or lackluster results that we got from some of this-- from some of Levi's peers, namely PVH. So cost-cutting really starting to take hold, productivity planning, that's all starting to pay off at this point. And we're seeing the fruits of that labor, obviously, in that upward guidance that we're getting from Levi's.

BRAD SMITH: Yeah, really interesting at least in the most recent quarter. The net revenue is ultimately 8% lower. And you look at some of the areas, the segments of this business geographically, America's net revenues down 11%. You also saw in Europe, net revenues decreased 7%. All of this considered here, you got to think about where they're going to be able to pull some levers and see strength. And it might be Asia. Asia net revenues, they were in line with the prior year but it's a large question of how much they can capitalize on the 22% growth in the prior year that they had already seen. I don't know what the jean replenishment rate is. I know that the CEO of Levi's historically has said he doesn't wash his jeans, so we'll see what the new incoming CEO as well.

SEANA SMITH: Do you wash your jeans?

BRAD SMITH: I think you're supposed to after a certain amount of time. Look, I don't want to--

SEANA SMITH: Say, if you don't wash your jeans because you're a jean wearer, I'm going to be--

BRAD SMITH: I do wear jeans.


BRAD SMITH: I am a jean wearer, indeed. I will accept that hat and title and yeah, that descriptive. Yes, and jean wash, sure, yes, I can safely say that as well. But anyway, before this goes too off the rails, wholesale net revenues. This is an important one for investors, really key in on here what the company has to say about it. Those wholesale net revenues actually declined by about 18% here. So that's going to be part of the shift that we're going to be waiting to hear from the CFO.

And for a deeper dive into the company's results, tune in to our live interview. You see how I did that? The Levi's CFO Harmit Singh joins tomorrow at 10:30 AM Eastern time. You do not want to miss that conversation. Good friend of the show here. We'll see what he has to say.