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Levi Strauss Stock Leaps After Q2 Earnings Beat, 20% Dividend Boost

"Although the operating environment remains dynamic, the diversity of our business is providing the resilience and flexibility needed to drive solid financial results," said CFO Harmit Singh.

Updated at 9:39 am EST

Levi Strauss & Co.  (LEVI) - Get Free Report shares traded firmly higher Friday after iconic clothing maker posted stronger-than-expected second quarter earnings, confirmed its full-year profit forecasts and boosted its dividend. 

Levi Strauss said its adjusted earnings for the three months ending on May 29 rose 26% from the same period last year to Street-beating 29 cents per share. Group revenues, meanwhile rose 15% to $1.47 billion, narrowly topping Street forecasts of a $1.43 billion tally.

The denim jeans maker, which also owns the Dockers and Denizen brands, held its adjusted profit margins in place at 58.2%, thanks in part to its ability to pass on price increases while steering more shoppers to its digital channels.

Looking into the final months of its fiscal year, Levi Strauss reaffirmed its targets of revenue growth in the region of $6.4 billion to $6.5 billion, a 14% increase from 2021 at the higher end, and adjusted earnings of between $1.50 and $1.56 per share. 

"We delivered another solid quarter, growing reported net revenues 15% and adjusted EBIT 27%, while returning $80 million in capital to shareholders," said CFO Harmit Singh. "Although the operating environment remains dynamic, the diversity of our business is providing the resilience and flexibility needed to drive solid financial results in fiscal year 2022, while progressing us on our path to achieve net revenues of $9 to $10 billion and adjusted EBIT margin of 15% by fiscal year 2027." 

Levi Strauss shares were marked 3.11% higher in early trading Friday at $16.91 each, a move that would still leave the stock with a year-to-date decline of around 34%.

The San Francisco-based group said it will pay a quarterly dividend of 12 cents per share, up from its previous payout of 10 cents, after returning around $80 million to shareholders in the form of dividends and buybacks over the second quarter.