Investing.com — Investors who wrote off old-school brick-and-mortar retailers may be kicking themselves.
Levi Strauss (NYSE:LEVI) jumped 10% on earnings, while Barclays (LON:BARC) upgraded American Eagle Outfitters (NYSE:AEO), Urban Outfitters (NASDAQ:URBN), Foot Locker (NYSE:FL), and Gap Inc (NYSE:GPS), with shares rising 6% for the former two and 4% for the latter two. The firm also boosted its rating on Kontoor, which makes Wrangler and Lee jeans. Shares increased 11%.
Levi Strauss & Co . reported better-than-expected third quarter results, with earnings per share of 8 cents that beat the expected loss per share of 22 cents, on sales of $1.06 billion, comparing to the estimated $822 million.
E-commerce revenue jumped 52%, while global digital sales — e-commerce plus pure-play and traditional wholesale customers — grew 50% compared to a year earlier, and made up 24% of third quarter revenue, double a year earlier.
Adjusted EBIT and adjusted diluted EPS were positive, and adjusted free cash flow was higher than the third quarter of the prior year.
Better yet, the company’s financial results continued to improve into the fourth quarter, Levi’s said in a statement.
Barclays upgraded the four retailers believing they will “materially benefit from sales recovery.” Kontoor Brands Inc (NYSE:KTB) is seen as a defensive play on a Covid surge and an offensive play on global growth, CNBC reported the firm as saying.
Levi’s sees inventory healthy heading into the holiday season.
“We bounced back this quarter, delivering profitability and generating strong cash flows,” said Harmit Singh, chief financial officer of Levi Strauss. “Revenues have been recovering from COVID-19 related disruptions faster than expected, driven by e-commerce, international and our women’s business, particularly within Europe and in the United States.”