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Lululemon Athletica Inc

Casual denim trend, higher prices fuel Levi’s upbeat forecast

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Products are displayed at a Levi Strauss store in New York, U.S., March 19, 2019. REUTERS/Shannon Stapleton/File Photo

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Jan 26 (Reuters) – Levi Strauss & Co (LEVI.N) forecast annual sales and profit above analysts’ estimates after topping quarterly results on Wednesday, bolstered by higher prices and strong demand for its jeans and jackets, sending its shares up 8% after the bell.

People shopping for casual outdoor clothing as pandemic restrictions eased and a resurgence in retro fashion styles such as high-rise and loose-fitting jeans have buoyed demand for the company’s denims.

The Signature and Levi’s 501 jeans maker said it expects revenue between $6.4 billion and $6.5 billion in fiscal year 2022, compared with analysts’ estimates of $6.37 billion, according to Refinitiv IBES data.

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The robust demand has, however, coincided with increased production and shipping costs, forcing companies to raise prices to offset the inflationary pressures.

Levi plans to raise prices further in 2022 and beyond, Chief Executive Officer Chip Bergh said on a call with analysts, adding that demand outstripped supply in the quarter due to supply chain snarls.

Lower promotions, more full-price selling and the reopening of its European and Asian markets also lifted the Denizen brand owner’s sales in the reported quarter.

Compared to pre-pandemic levels, Asia net revenue was flat in the three months ended Nov. 28, recovering from a 23% slump reported in the third quarter.

Net revenue rose 22% to $1.69 billion in the fourth quarter, edging past analysts’ estimate of $1.68 billion.

Excluding items, Levi earned 41 cents per share, a cent above expectations.

Holiday season sales came in above its expectations, the company said, in contrast to downbeat estimates from retailers including Lululemon Athletica Inc (LULU.O) and Abercrombie & Fitch Co (ANF.N). read more

San Francisco-based Levi expects adjusted full-year profit per share between $1.50 and $1.56, compared with estimates of $1.52.

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Reporting by Deborah Sophia in Bengaluru; Editing by Vinay Dwivedi and Sriraj Kalluvila

Our Standards: The Thomson Reuters Trust Principles.

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Filed Under: BUSINESS Tagged With: Fashion, Lululemon Athletica Inc, New York, Production, Quarterly results, Shares, Supply Chain, York

Why Elite Female Athletes Are Turning Away From Major Sponsors

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Ms. Carreon-John noted that more than a third of the U.S. track and field women’s roster is made up of Nike athletes. “Individual situations of a handful of athletes are not representative of Nike’s support of women’s sport,” she said, adding, “No footwear, apparel or equipment manufacturer provides the level of support Nike provides to women’s sport, period.”

To be sure, Nike is a huge company and has supported a sprawling number of athletes for decades. “Nike has done a lot of great things, but sometimes when you’re the big brand, there are more opportunities to get things wrong at the end of the day,” said Merhawi Keflezighi, founder of HAWI Management, who represented Mr. Berian and manages Ms. Pappas. He commended the company for changing its policies for pregnant athletes and added that since 2016, the industry has become less aggressive about reduction clauses in contracts.

The new sponsorship opportunities are arising as the athletic apparel market continues to grow — a trend further fueled by the pandemic. Athleta and Lululemon were among the rare apparel brands that saw sales soar last year. In the running world, there were five to six brands that were more visible at the U.S. Olympic trials in Eugene, Ore., in June than in the past, Ms. Neuburger of Lululemon said.

“The athletic sportswear and athleisure market is transforming from growth to maturity with newer and rising entrants,” said Angeline Close Scheinbaum, associate professor of marketing at Clemson University. “So naturally, a shift in athlete endorsers from the market leader to other brands is occurring.”

Dr. Scheinbaum said that she viewed the trend as less of an exodus from established leaders and more about “athletes, especially women, joining a smaller brand that can become synonymous with these star athletes and their platforms and stories.”

Indeed, brands that are pursuing elite women athletes are keen to embrace their backgrounds and causes that matter to them. Ms. Cain said that the most famous women athletes have often become household names because they have an “and” tied to their performance — “athlete and activist” or “athlete and mental health advocate,” she said.

“Unless you have five different ways to sell yourself, you’re just not valued monetarily in the same way as the white dude next to you is,” she said. While that dynamic is unfair, she said, it has created a situation where women athletes often have bigger and more engaged followings online, and more brands are starting to take notice of that.

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Filed Under: BUSINESS Tagged With: Advertising and Marketing, Athleta, Athletics and Sports, Biles, Simone, Cain, Mary (1996- ), Fashion and Apparel, Felix, Allyson, Health, Industry, Lululemon Athletica Inc, Mental health, Nike, NIKE Inc, Oiselle Running Inc, Olympic Games (2020), Pappas, Alexi (1990- ), Running, Sport, Sporting Goods and Equipment, Track and Field, Tracksmith Corp, Women, Women and Girls

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