By Dhirendra Tripathi
Investing.com – Levi Strauss (NYSE:LEVI) stock traded 3.7% lower Thursday on fears of write-offs owing to the company’s exposure to Russia.
Worries over rising raw material costs, a factor the company countered with price hikes in the first quarter, are also adding to the losses.
The maker of the iconic denim jeans said in a filing it would review assets specific to Russian commercial business for impairment in the second quarter, according to Reuters.
The company last month suspended operations in Russia, including new investments, following the country's invasion of Ukraine.
Levi’s first-quarter sales and profit topped estimates, driven by strong demand for its jeans, tops and jackets, and price hikes.
Cost pressures notwithstanding, the company improved its gross margins. It attributed this to selling more to consumers directly, lower promotional expenses, lower share of discounted sales and price increases.
The company recorded double-digit sales in every market, led by Americas, Europe and Asia in that order.
"We're not seeing any real pushback on pricing at all at this point," Reuters quoted CEO Charles Bergh as telling analysts in the earnings call, adding that there was room for stronger pricing in the second half of the year.
First-quarter revenue rose about 22% to $1.59 billion. Chief Financial Officer Harmit Singh said supply chain-related issues cut revenue opportunities by about $60 million, or 5%, primarily in the U.S.
Adjusted profit per share for the quarter ended February 27 was 12 cents higher at 46 cents.
The company is sticking to its annual guidance of 11%-13% growth in net revenue to $6.4 billion-$6.5 billion. Adjusted EPS is seen at $1.50-to-$1.56.