Levi Strauss raises outlook after second-quarter beat; shares fall after hours

Levi Strauss raised its full-year outlook after stronger second-quarter results, though its shares fell 6% in after-hours trading after slipping 1.2% in the regular session. For the quarter ended May 31, net revenue rose 8% to $1.56 billion, ahead of analysts' $1.52 billion estimate, while adjusted earnings were 28 cents per share versus expectations of 24 cents. Net income increased to $87.3 million, or 22 cents per share, from $67 million, or 17 cents per share, a year earlier. The company now expects fiscal-year revenue growth of 7.0% to 7.5%, up from 5.5% to 6.5%, and raised its adjusted EPS forecast to $1.46 to $1.52 from $1.42 to $1.48. Levi also increased its dividend, returned $54 million to shareholders through dividends, up 5% from a year earlier, and said its $200 million share buyback is expected to be completed in the third quarter. Levi said demand for denim and broader apparel categories, along with growth in its higher-margin direct-to-consumer business, supported results. Sales rose 9% in the Americas to $815 million, 4% in Europe to $420 million and 10% in Asia to $284 million. CEO Michelle Gass said the company's shift toward a broader denim lifestyle brand is gaining traction, with women's apparel sales up 11% and market share improving in men's and women's categories. Investors appeared cautious about whether expansion into a wider apparel mix, digital channels and company-owned stores could pressure pricing and margins.