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Business

Jobs report, consumer credit, Levi Strauss earnings top week ahead

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 Surevest CEO Rob Luna, Semianalysis chief analyst Dylan Patel and University of Maryland economist Peter Morici provide insight on the stock market and the economy on ‘Making Money with Charles Payne.’

Investors will get a break on Monday as the New York Stock Exchange will be closed in observance of the Fourth of July holiday. While the upcoming week will be light for earnings, Wall Street will be focused on the latest jobs and consumer-related data. 

On Friday, stocks bounced between losses and gains, ultimately closing higher across the board with momentum picking up in the final hour of trading. The Dow Jones Industrial Average climbed 321.83 points, or 1.05%, to 31,097.26. Meanwhile, the S&P 500 and Nasdaq composite rose 1.04% and 0.9%, respectively. 

Ticker Security Last Change Change %
I:DJI DOW JONES AVERAGES 31097.26 +321.83 +1.05%
SP500 S&P 500 3825.33 +39.95 +1.06%
I:COMP NASDAQ COMPOSITE INDEX 11127.845123 +99.11 +0.90%

FOX Business takes a look at the upcoming events that are likely to move financial markets in the coming days. 

Tuesday 7/5

Kicking off the week for economic data will be durable goods and factory orders. In addition, private investment firm Allen & Company will hold its annual Sun Valley conference. 

STOCK MARKET NEWS: DOW, S&P, NASDAQ GAIN, AIRLINES DEAL WITH JULY 4TH TRAVEL CHAOS

Ticker Security Last Change Change %
TSLA TESLA INC. 681.79 +8.37 +1.24%
MSFT MICROSOFT CORP. 259.58 +2.75 +1.07%
AAPL APPLE INC. 138.93 +2.21 +1.62%
META META PLATFORMS INC. 160.03 -1.22 -0.76%
BRK.A BERKSHIRE HATHAWAY INC. 415,850.00 +6,900.00 +1.69%
GOOGL ALPHABET INC. 2,174.75 -4.51 -0.21%
CMCSA COMCAST CORP. 40.29 +1.05 +2.68%
PARA PARAMOUNT GLOBAL 25.21 +0.53 +2.15%
NFLX NETFLIX INC. 179.95 +5.08 +2.91%
DIS THE WALT DISNEY CO. 96.14 +1.74 +1.84%

According to Variety, this year’s guests will include Tesla CEO Elon Musk, Microsoft co-founder Bill Gates, Apple CEO Tim Cook, Meta CEO Mark Zuckerberg, Berkshire Hathaway chairman and CEO Warren Buffett, Alphabet CEO Sundar Pichai, Comcast chairman Brian Roberts, Paramount Global non-executive chairwoman Shari Redstone, Netflix co-founders Reed Hastings and Ted Sarandos and Disney CEO Bob Chapek.

Ticker Security Last Change Change %
COST COSTCO WHOLESALE CORP. 485.76 +6.48 +1.35%

Tuesday also marks the beginning of Costco’s new requirement that New Jersey customers must have a membership to buy gasoline. 

CONSUMER’S DRIVE TO KEEP ‘MARCHING FORWARD’ WILL SOON BE ‘QUITE DIFFICULT’: FMR ECONOMIC COUNCIL DIRECTOR

Wednesday 7/6

Economic data on the docket for Wednesday will include the Fed Minutes, the JOLTS report, the ISM non-manufacturing PMI and weekly mortgage applications. 

Federal Reserve Bank of New York President John Williams gives opening and closing remarks before the New York Fed Web Series on Culture: “Shifting Norms? The Intersection of Technology and Culture in Financial Services,” organized by the Federal Reserve Bank of New York.

Immigration rights activists hold a rally in front of the Supreme Court in Washington, Nov. 12, 2019, as the court hears arguments about the Deferred Action for Childhood Arrivals program (DACA). (Saul Loeb/AFP via / Getty Images)

The Fifth Circuit Court of Appeals will also hold a hearing on the Biden administration’s bid to overturn a block on new DACA applicants. 

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Thursday, 7/7

Taking the earnings spotlight on Thursday will be Levi Strauss and WD-40 after the bell. 

Ticker Security Last Change Change %
LEVI LEVI STRAUSS & CO. 16.01 -0.31 -1.90%
WDFC WD-40 CO. 199.78 -1.58 -0.78%

On the economic data front, investors will digest the foreign trade balance, the latest in initial and continuing jobless claims, and the Energy Information Administration’s weekly crude stocks. 

St. Louis Fed president James Bullard will also give a presentation on the U.S. economy and monetary policy before the hybrid Little Rock Regional Chamber’s Power Up Little Rock Luncheon.

Friday 7/8

Wrapping up the week for economic data will be the June jobs report, wholesale inventories, and sales and consumer credit. 

New York Fed president John Williams will also speak on and participate in a discussion about monetary policy, the U.S. and Puerto Rico economic outlooks, and economic trends before an event hosted by the University of Puerto Rico’s Mayagüez campus.

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Business

Levi Strauss & Co. (LEVI) reaffirms 2022 outlook, boosts guidance

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A sign is posted in front of the Levi Strauss & Co. headquarters on April 09, 2021 in San Francisco, California.

Justin Sullivan | Getty Images News | Getty Images

Levi Strauss & Co. on Wednesday maintained its outlook for the full year and boosted its financial targets over the next five years as the denim retailer grows its e-commerce business.

The company views itself as much stronger than it was before the Covid pandemic and since its public market debut in March 2019.

“We are reaffirming full-year guidance, despite all the headwinds,” Chief Financial Officer Harmit Singh said in an interview, ahead of Levi’s annual investor day event. “The trends we’re seeing in the business give us confidence,” Singh said. “We are looking at the short term, while also not losing sight of the long term.”

In recent weeks, retailers from Walmart to Abercrombie & Fitch have alluded to the challenges that they are facing, from ongoing supply chain problems and mismatched inventories, to red-hot inflation and a potential pullback in consumer spending.

Retail executives have said that lower-income shoppers are already feeling the pinch of higher prices on goods and adjusting their budgets accordingly, while wealthier households are splurging on new outfits, makeup and luggage for summer travel. The split in behavior has resulted in a similar divide in the retail industry. So far this earnings season, luxury and high-end brands — from Canada Goose to Michael Kors parent Capri Holdings — have largely outperformed businesses that cater to price-conscious consumers.

Levi doesn’t expect the volatile economic backdrop will dent demand for its jeans.

It now sees annual revenue growing in a range of 6% to 8%, up from prior targets of 4% to 6%, through 2027. If achieved, that would bring Levi’s revenue close to $10 billion five years from now.

For fiscal 2022, it still projects sales to increase between 11% and 13% from 2021 levels, with adjusted earnings per share falling within a range of $1.50 to $1.56. Analysts had been looking for revenue to rise 11.8%, with Levi earning a per-share adjusted profit of $1.55, according to Refinitiv data.

By 2027, Levi said it aims to expand its direct-to-consumer business to 55% of total sales and triple e-commerce revenue.

Levi’s direct business accounted for about 36% of total sales in the retailer’s latest fiscal year that ended Nov. 28. Digital revenue, including from wholesale partners, made up 22% of total revenue of $5.8 billion that year, according to an annual filing.

“As we continue to scale [e-commerce], that business becomes a lot more profitable,” Chief Executive Officer Chip Bergh said in an interview. “Before the pandemic, our e-commerce business was a money-loser.”

In addition to growing online, Levi is also pushing shoppers to buy more than just the company’s iconic denim bottoms. It’s aiming to nearly double revenue from tops by 2027. Levi is also projecting its women’s business, which accounts for about one-third of sales currently, will double by then.

According to Singh, Levi’s women’s business has higher gross margins than the company’s overall average gross margins.

Levi anticipates its Dockers and Beyond Yoga banners to contribute combined revenue of nearly $1 billion by 2027. Levi acquired Beyond Yoga, famous for its women’s leggings and stretchy tops, for an undisclosed amount last year.

Shares of Levi are down about 28% this year.

This story is developing. Please check back for updates.

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Business

Conagra, Levi Strauss, Rite Aid and others

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Check out the companies making headlines before the bell:

Conagra (CAG) – The food producer’s stock tumbled 5.5% in the premarket after issuing a weaker-than-expected forecast for the fiscal year ending in May. Conagra’s results are being hit by higher transportation and raw materials costs.

Levi Strauss (LEVI) – Levi Strauss beat estimates by 4 cents with an adjusted quarterly profit of 46 cents per share, and the apparel maker’s revenue also topped Wall Street forecasts. The company saw strong demand for its jeans, tops and jackets while successfully raising prices and cutting down promotions. Levi Strauss rose 3% in premarket trading.

HP Inc. (HPQ) – HP is surging 15.2% in premarket trading following news that Warren Buffett’s Berkshire Hathaway took an 11.4% stake in the maker of personal computers and printers.

Rite Aid (RAD) – The stock tumbled 18.3% in premarket action after Deutsche Bank downgraded the drugstore operator to “sell” from “hold.” Deutsche Bank said Covid hastened the decline of the retail pharmacy segment, and there’s a possibility that Rite Aid may not be able to generate enough earnings to continue as an operating company.

Wayfair (W) – Wayfair slid 4.1% in the premarket after Wells Fargo downgraded the stock to “underweight” from “equal weight.” Wells Fargo said the high-end furniture retailer will be hurt by waning demand, overly optimistic consensus estimates and other headwinds.

Rent the Runway (RENT) – Rent the Runway stock jumped 3.9% in the premarket after the fashion rental company announced a price hike for its subscribers.

CDK Global (CDK) – The provider of automotive retail technology agreed to be bought by Brookfield Business Partners for $54.87 per share in cash. The price represents a 12% premium over CDK’s Wednesday closing price.

SoFi Technologies (SOFI) – The online personal finance company’s shares slid 5.1% in the premarket after cutting its full-year outlook. The cut follows the White House announcing a student loan payment moratorium will be extended.

JD.com (JD) – JD.com announced that founder Richard Liu has left the chief executive officer position and President Xu Lei will take over as the Chinese e-commerce company’s CEO. Liu will remain as chairman. JD.com fell 1.1% in the premarket.

Teladoc Health (TDOC) – The provider of virtual doctor visits saw its stock gain 1.5% in premarket action after Guggenheim initiated coverage with a “buy” rating. Guggenheim said health care access is moving more toward digital interactions and that Teladoc has a broader service portfolio than other providers.

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Business

Levi Strauss to buy yoga apparel brand Beyond Yoga

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An employee holds a shopping bag while ringing up a customer at the Levi Strauss & Co. flagship store in San Francisco, March 18, 2019.

David Paul Morris | Bloomberg | Getty Images

Levi Strauss & Co. on Thursday agreed to buy the yoga apparel brand Beyond Yoga, launching the jeans maker into the competitive activewear space.

Levi didn’t disclose the size of the all-cash deal, which is expected to close in the fourth quarter.

Levi expects the acquisition will add more than $100 million to its net revenue next fiscal year, and immediately bolster its earnings.

“We’ve been looking at acquisitions for quite some time, and the activewear space has obviously been very, very attractive,” Levi CEO Chip Bergh told CNBC in a phone interview. “We see enormous growth potential here. It puts us as a company smack into the high-growth, high-margin activewear segment.”

Levi shares were up less than 1% in extended trading on the news.

After the transaction is complete, Levi said Beyond Yoga will operate as a standalone division within its business. Co-founder Michelle Wahler will continue to serve as Beyond Yoga CEO, reporting to Bergh.

Levi CFO Harmit Singh commented that Beyond Yoga has more than doubled its revenue while growing profitability over the past three years. The brand, headquartered in Los Angeles, was founded by two women in 2005. Its marketing often echoes messages of body positivity and size inclusivity to younger girls.

Bergh said Levi plans to expand the Beyond Yoga brand outside of the United States and open more bricks-and-mortar stores. The deal should also help Levi grow its women’s business, which accounts for roughly one-third of sales today. The goal is to grow women’s to 50%, Bergh said.

Levi’s acquisition is yet another vote of confidence that an already hot retail sector is growing even hotter, as companies from Kohl’s to Target vie for a sliver of the activewear market.

On Monday, Wolverine Worldwide — the company behind Merrell, Saucony, Sperry, Stride Rite and other shoe names — scooped up Lululemon rival brand Sweaty Betty for $410 million.

Big-box chains Dick’s Sporting Goods, Kohl’s and Target have also launched their own activewear offshoots, competing with the likes of Nike, Under Armour and Gap’s Athleta banner. There are a number of other smaller start-ups in the space, ranging from Outdoor Voices to Nobull to Bandier.

Even as Americans return to the office and to socializing with colleagues, many are still opting for comfortable and casual clothing, including stretchy bottoms and sneakers.

This shifting fashion trend has been coined “workleisure,” a play on athleisure garb that can be worn from a workout class to the coffee shop. It’s fueling further growth in the activewear category.

“As some people start going back to the office, you’re not seeing suits anymore, you’re seeing people go into the office in more casual clothing, even athleisure-type products,” Bergh said. “And it’s a truly global phenomenon.”

Levi shares are up 37% year to date. Its market cap is $11.1 billion.

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Business

Levi Strauss & Co. (LEVI) reports Q2 2021 earnings beat

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Levi Strauss & Co. said Thursday that shoppers are stocking up on jeans in new sizes and styles in the U.S. and China as they emerge from their homes during the pandemic.

The momentum both in stores and online boosted its fiscal second-quarter earnings and revenue ahead of analysts’ expectations. Although sales were still down 3% from 2019, the retailer anticipates fiscal third-quarter sales are on track to top pre-pandemic levels. That was something Levi previously didn’t expect to achieve until the fourth quarter.

Levi’s stock jumped around 3% in extended trading on the news.

While Levi raised its revenue and profit outlook for the rest of the year, the company cautioned it assumes the Covid pandemic doesn’t worsen around the world.

“There are a lot of things that are outside of our control, like the pandemic … and the Delta variant, and what’s going to happen next,” said Chief Executive Chip Bergh in a phone interview. “But the team has demonstrated a lot of agility and being able to respond.”

Here’s what the company reported for the quarter ended May 30 compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

  • Earnings per share: 23 cents adjusted vs. 9 cents expected
  • Revenue: $1.28 billion vs. $1.21 billion expected

Levi said it swung to a profit of $65 million, or 16 cents per share, from a net loss of $364 million, or 91 cents per share, a year earlier. Excluding one-time adjustments, Levi earned 23 cents per share, topping analysts’ estimates for 9 cents.

Levi’s revenue surged 156% to $1.28 billion from $498 million a year earlier. That beat expectations for $1.21 billion.

Sales in the U.S. and China surpassed 2019 levels, but were still down on a two-year basis in Europe due to ongoing store closures related to the health crisis. Roughly a third of Levi’s European stores, and 17% of its global locations, were closed during the period.

The company said 92% of its stores are reopened at the moment.

Price increases, savings on sourcing materials and lower promotional activity helped boost profits. It recorded record high profit margins.

A new denim cycle is what’s helping to drive sales momentum. In recent months, tight-fitting pants have been trending out of style, and instead shoppers are flocking to looser-hanging, wide-leg and flared jeans. Many consumers feel the need to totally refresh their wardrobes. Levi is also seeing growth in its tops business.

“We are seeing good evidence of the new denim cycle driven by the looser and baggier fits, which we’ve led, and that gives us a lot of optimism about the second half of this year,” Bergh told CNBC.

Levi also said it has been working to strengthen its wholesale operations by investing in relationships with key partners, such as Nordstrom, and getting out of stores that are synonymous with markdowns. Wholesale revenue in the latest period rose 167% from a year earlier.

And the company is still growing its digital business, with global e-commerce sales up 75% year over year, representing about 23% of total sales.

For fiscal 2021, Levi expects earnings of between $1.29 and $1.33 per share after adjustments. Analysts had been looking for earnings of $1.15 per share.

For the second half of the year, Levi expects sales to rise 28% to 29% compared with a year earlier, and be up 4% to 5% compared with 2019.

“Revenues in most markets are recovering faster than anticipated, and we are emerging from the pandemic with sustainable and improved structural economics,” Chief Financial Officer Harmit Singh said in a news release.

Levi raised its dividend by 2 cents per share to 8 cents for the third quarter.

Levi’s stock has rallied nearly 40% year to date. The company’s market cap is roughly $11.2 billion.

Find the full earnings press release from Levi’s here.

This story is developing. Please check back for updates.

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