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What’s happening: Shares of Levi Strauss rose sharply on Thursday, after the company reported its first-quarter results.
What happened: The retailer posted stronger-than-expected quarterly sales and earnings for the quarter.
Levi Strauss also boosted its earnings forecast for fiscal 2024, taking its stock to a more than two-year high during Thursday’s session.
How were the results: The company reported a single digit decline in sales for its first quarter.
Why it matters: Levi Strauss has been focusing on its own stores and website to boost overall sales. Its direct-to-consumer (DTC) channel represented around half of the overall revenue in the first quarter, compared to 42% in the earlier quarter.
As of February 25, total inventories had contracted by 14% on a dollar basis, while direct-to-consumer net revenues surged 7%. However, wholesale revenues from third-party retail partners dipped 18% during the quarter.
The company also saw an increase in demand for its loose fits, which took the sales of women’s baggy jeans higher by 50%.
The company’s adjusted EBIT margin shrank 200 basis points to 9.0%, from 11.0% in the previous quarter.
“Both newness and strength in our core offerings are fueling consumer demand and driving meaningful market share gains,” CEO Michelle Gass said during the earnings call.
Management raised their projections for fiscal 2024 adjusted earnings to $1.17 to $1.27 per share, from their earlier forecast of $1.15 to $1.25 per share.
How shares responded: Shares of Levi Strauss jumped 12.4% to close at $20.97 on Thursday, while spiking to a two-year high earlier in the session. The stock has added around 29% year-to-date.
What to watch: Investors will continue monitoring sales at the company’s DTC channel, which is expected to provide a boost to overall results ahead.
Context: The CAD/USD forex pair moved lower on Thursday as investors assessed recent economic reports.
Details: The Bank of Canada is projected to start cutting interest rates this year but is widely expected to hold rates at its policy meeting next week. Canada’s jobs report is scheduled for release today, which will provide further insights into the economy’s strength.
Data released on Thursday showed Canada’s trade surplus widening to C$1.4 billion in February, from C$0.6 billion in the prior month. The figure also topped market estimates of a surplus of C$0.8 billion. Exports surged by 5.8% to C$66.6 billion, while imports grew by slower 4.6% to C$65.2 billion during February.
Weakness in the US dollar lent some support to the CAD/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell around 0.12% to 104.12 on Thursday.
Strength in the price of crude oil, one of Canada’s major experts, limited the overall losses for the loonie. WTI crude oil for May delivery gained $1.16 to settle at $86.59 per barrel on Thursday.
The CAD/USD forex pair fell slightly to 1.3544 on Thursday, after trading in the positive zone for most of the session. The S&P/TSX Composite Index lost 0.27% to settle at 22,051.79.
What to watch: Investors await the release of economic data on jobs and Ivey Purchasing Managers Index from Canada today. Analysts expect the unemployment rate in Canada to rise to 5.9% in March, from 5.8% in February, while employment in the country is projected to increase by 25,000 in March.
Average hourly earnings are expected to grow by 4.7% year-over-year in March, following a 4.9% gain in the prior month. The Ivey Purchasing Managers Index, which fell to 53.9 in February, is expected to improve to 54.2 in March.
Other Markets: European indices closed mostly higher on Thursday, with the FTSE 100, DAX 40 and STOXX Europe 600 Index up by 0.48%, 0.19% and 0.16%, respectively, and the CAC 40 down by 0.02%.
Russia’s drone strikes on Kharkiv cut power supply for around 350,000 Ukrainians. The news sent the safe-haven US dollar index higher this morning.
The Philippines said its annual inflation rate accelerated to 3.7% in March, from 3.4% in the prior month. The latest reading coming in better than market estimates of 3.8% lent support to the PHP/USD forex pair.
Hong Kong’s S&P Global SAR PMI rose to 50.9 in March, from 49.7 in February. This being the strongest reading since December 2023 sent the HKD/USD pair higher in forex trading this morning.
Australia’s trade surplus on goods narrowed to A$7.28 billion in February, from A$10.06 billion a month ago. It also came in short of market estimates of A$10.4 billion and exerted pressure on the AUD/USD forex pair.
Japan’s household spending fell by 0.5% year-over-year in February. This being significantly better than market expectations of a 3.0% decline sent the JPY/USD pair higher in forex trading this morning.
Germany’s factory orders, import prices and construction PMI, UK’s Halifax house price index and construction PMI, France’s industrial production and construction PMI, Spain’s industrial output, Eurozone’s construction PMI and retail sales, Italy’s construction PMI, Brazil’s gross debt to GDP and government budget value, India’s Bank loan growth, deposit growth and foreign exchange reserves, Mexico’s auto exports and car output, US nonfarm payrolls, unemployment rate, average hourly earnings, Baker Hughes crude oil rigs, Baker Hughes total rigs, Manheim used vehicle value index and consumer credit, Russia’s foreign exchange reserves, total vehicle sales and gross domestic product, as well as Turkey’s treasury cash balance and total vehicle sales.
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