Live news: Shift to premium drinks boosts sales at Diageo

Levi Strauss said its revenues grew more than forecast in the lead-up to the festive season, even as it navigated supply chain woes that wiped out the benefit of Black Friday sales.

A shift to casual clothing has boosted demand for Levi’s jeans, including newer styles with a baggier fit, as consumers work from home during the pandemic.

The San Francisco-based company also got a boost last quarter as more shoppers returned to stores. It reported a 28 per cent increase in net revenues for company-operated stores compared with the same period a year ago.

Overall, net revenues jumped 22 per cent to $1.7bn in the three months to the end of November, surpassing analysts’ forecast of $1.68bn and the company’s own outlook that sales would grow as much as 21 per cent.

Levi said its revenues took a $50m hit from supply chain constraints during the quarter. That offset a 3 per cent boost from Black Friday sales and the company’s acquisition of the Beyond Yoga brand.

Harmit Singh, chief financial officer, said staffing challenges as well as supply chain bottlenecks kept Levi from meeting all of the demand for its products. Sales have not suffered much from price increases, he said.

“Demand is outstripping supply,” Singh said in an interview, adding that Levi has maintained pricing power during a period of elevated cost inflation fuelled by wages, commodities and store rent.

Levi predicted that net revenues will improve by 11 to 13 per cent in fiscal 2022 to between $6.4bn and $6.5bn, above analysts’ forecast of $6.37bn. It expects adjusted earnings of $1.50 to $1.56 per share, compared with Wall Street’s estimate of $1.53.

Shares rose 1.9 per cent in after-hours trading on Wednesday.

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