Levi Strauss (LEVI +3.27%) is slated to report its fourth-quarter and full-year results for fiscal 2021 (which ended on Nov. 28) after the market close on Wednesday, Jan. 26. An analyst conference call is scheduled for the same day at 5 p.m. ET.
Investors will probably be approaching the iconic denim and casual clothing retailer's report with mixed feelings. On one hand, there's reason for optimism, as Levi has been churning out good quarterly results. Last quarter, both sales and earnings beat Wall Street's consensus estimates. Moreover, in the first three quarters of fiscal 2021, earnings have sped by analysts' expectations.
On the other hand, the market has been struggling in 2022. So investors are probably somewhat apprehensive about how the market will react to Levi's earnings release. In this type of market, even better-than-expected results and guidance could result in the stock sinking.
Levi stock closed at $21.79 on Monday, Jan. 24. This price is 28% higher than the stock's initial public offering (IPO) price of $17 in late March 2019.
Image source: Getty Images.
Levi Strauss' key quarterly numbers
| Metric | Fiscal Q4 2020 Result | Levi's Fiscal Q4 2021 Guidance | Levi's Projected Change | Wall Street's Fiscal Q4 2021 Consensus Estimate | Wall Street's Projected Change |
|---|---|---|---|---|---|
|
Revenue |
$1.39 billion |
20% to 21% growth | 20% to 21% |
$1.68 billion | 21% |
|
Adjusted earnings per share (EPS) |
$0.20 | $0.38 to $0.40 | 90% to 100% |
$0.40 | 100% |
Data sources: Levi Strauss and Yahoo! Finance.
As with last quarter, Levi has relatively easy year-over-year comparables due to the pandemic, which hurt the year-ago period's results. Because the fourth quarter of fiscal 2020 ended before COVID-19 vaccines started rolling out, many people were still not venturing out much. Consumers weren't buying many new clothes, other than apparel for hanging out at home and for exercising. In the 2020 fiscal fourth quarter, Levi's revenue fell 12% and its adjusted EPS declined 23% year over year.
For context, last quarter (fiscal Q3 2021), Levi's revenue surged 41% year over year to $1.50 billion, driven by consumers refreshing their wardrobes as economies around the world broadly reopen, as I wrote in my earnings article. That result topped the $1.48 billion the Street had expected. By channel, wholesale's revenue grew 45% with direct-to-consumer (DTC) not too far behind at 34%. (DTC includes the company's own stores and its e-commerce site.)
Last quarter, net income according to generally accepted accounting principles (GAAP) was $193 million, or $0.47 per share, up from $0.07 in the year-ago period. Adjusted net income was $197 million, or $0.48 per share, up 500% from $0.08 in the third quarter of fiscal 2020. That result easily exceeded the $0.37 analyst consensus estimate.
First-quarter fiscal 2022 guidance
The market's reaction to Levi's upcoming release will probably hinge more on the company's outlook than its fiscal fourth-quarter results, relative to Wall Street's expectations.
So investors should know that analysts are currently modeling for revenue in the fiscal first quarter (ending in late February) to increase about 18% year over year to $1.54 billion and adjusted EPS to jump 26% to $0.43.
