Levi Strauss & Co.On Wednesday, the fiscal third quarter earnings and sales were higher than analysts expected. This was due to increased consumer demand during back-to school season. shoppers looked to stock up on the latest denim trends

After closing the day lower than 5%, its stock increased more than 2.2% during extended trading on news.

Many apparel firms have suffered from global supply chain disruptions. However, Levi’s has done well relative to other companies due to its diversification manufacturing. According to the company, less than 4% of global volume is from Vietnam. Production facilities there have been hard hit by periodic shutdowns During the pandemic.

CNBC’s Chief Executive Chip Bergh stated that “our supply chain is really a source for competitive advantage.” We can quickly move products around. For the past 18 months, we’ve run the business in different situations.

This is how Wall Street expected the company to do in the 3-month period ending August 29. It was based upon a Refinitiv survey of analysts.

• Earnings per share: 48 cents adjusted vs. 37 cents expected
• Revenues: $1.5 Billion vs. expected $1.48 Billion

The net income grew to $193million or 47c per share from $27m, which was 7 cents per shares, one year earlier. With the exclusion of one-time expenses, net income was 48 cents per shares. Analysts expected to earn 37 cents per share.

From $1.06 billion one year ago, revenue rose by 41% to $1.5billion. It slightly exceeded the estimates for $1.48 billion.

Bergh stated that Levi suffered a $10 million revenue loss due to supply chain problems.

The company reported that wholesale revenue increased by 45% over the previous year due to strong demand from the U.S.A and Europe. As more people visited Levi’s brick-and mortar stores for jeans and loungewear, direct to consumer sales grew 34% from 2020 levels. They also climbed by 3% over a 2-year period.

Digitized transactions were up by 10% and 76% respectively over the last two years. About 20% of Levi’s sales came from them.

It was noted by the company that Levi sells more merchandise directly to customers at higher price points and has a greater profit margin than it does using promotional offers.

Around the world, stores are being closed due to the ongoing health crisis. Levi reported that 10% of the company’s stores closed in its latest quarter. This was mainly due to Asia. It said that 4% of its stores remain closed.

Levi expects a 20%-21% increase in year-over-year revenue for its fourth quarter. Analysts had expected a 22% rise. It cautioned that it assumes that the health crisis does not dramatically worsen.

On an adjusted basis, it expects fourth quarter earnings to range between 38c and 40c per share. Analysts were expecting a per-share adjusted profit of 40cs.

Levi expects to earn adjusted earnings of between $1.43 and $1.45 per Share for the entire year. This is higher than Wall Street’s consensus estimate at $1.33 per Share.

Bergh explained that the expectation was for holiday to be “pretty good”. To ensure that Levi can be under every Christmas tree, we are chasing the demand, both from a supply-chain standpoint.

On Wednesday, the company announced that it had approved $200 million in share buybacks during its latest quarter.

Levi shares have increased by 21% over the past year, giving it a market value of $9.76 Billion.

Get the complete earnings report here