Shares of Levi Strauss (LEVI) soared 13% in premarket buying and selling Tuesday, a day after the denim large reported better-than-expected first-quarter revenue and gave a comparatively upbeat outlook on the Trump administration’s new tariffs.

After the bell Monday, Levi’s reported quarterly adjusted earnings per share (EPS) of $0.38, above the $0.28 consensus forecast of analysts polled by Seen Alpha. The corporate generated $1.53 billion in income, according to estimates.

Its Dockers enterprise now could be labeled as «discontinued operations,» as Levi’s made the choice through the first quarter to pursue a sale of the model after launching a review in October.

Pricing Changes Attributable to Tariffs Would Be ‘Surgical’

Levi’s CFO Harmit Singh stated on Monday’s earnings name that the corporate expects «minimal impression» from tariffs on its second-quarter revenue margins, as a lot of its stock has already been imported. Singh stated the tariffs might be a «important problem» later this yr, however he and CEO Michelle Gass stated they’re «fluid» and will change, based on a transcript from AlphaSense.

Gass stated any pricing changes because of the tariffs shall be «surgical.» The corporate imports merchandise from 20 nations into the U.S., and Gass stated Levi’s has created a «job power» to judge methods to attenuate the potential impacts of tariffs.

In a notice following the earnings, JPMorgan analysts upgraded Levi’s inventory to «obese» from «impartial,» whereas additionally trimming the inventory’s worth goal to $17 from $19. The analysts reduce their worth goal as a result of they consider tariffs will doubtless harm income this yr, however stated Levi’s ought to have the ability to mitigate an estimated 75% of the fee due to modifications to its enterprise since tariffs performed a job within the first Trump administration.