An worker holds a purchasing bag whereas ringing up a buyer on the Levi Strauss & Co. flagship retailer in San Francisco, March 18, 2019.
David Paul Morris | Bloomberg | Getty Photos
Levi Strauss & Co. on Thursday reported a double-digit gross sales decline for its fiscal first quarter, as ongoing retailer closures in Europe and lightened foot site visitors within the U.S. as a result of Covid pandemic weighed on outcomes.
However the denim maker boosted its gross sales and revenue outlook for the primary half of the 12 months, assuming the worldwide well being disaster would not grow to be worse from right here. CFO Harmit Singh mentioned in an interview with CNBC that the corporate is anticipating gross sales will return to 2019, pre-pandemic ranges by the fourth quarter.
Its shares jumped greater than 6% in after-hours buying and selling.
“These outcomes level to actually good proof that we’ll emerge from the pandemic a stronger firm,” CEO Chip Bergh informed CNBC. “We beat our personal expectations internally [and] beat exterior expectations, regardless of having a 3rd of our shops closed in Europe over the complete quarter.”
This is how the corporate did for its quarter ended Feb. 28, in contrast with what analysts have been anticipating, based mostly on a survey by Refinitiv:
- Earnings per share: 34 cents adjusted vs. 25 cents anticipated
- Income: $1.31 billion vs. $1.25 billion anticipated
Levi’s internet revenue declined barely to $142.5 million, or 35 cents per share, from $152.7 million, or 37 cents per share, a 12 months earlier. Excluding one-time expenses, the corporate earned 34 cents per share, higher than the 25 cents forecast by analysts, in response to Refinitiv.
Whole income fell about 13% to $1.31 billion from $1.51 billion a 12 months earlier. That got here in higher than the $1.25 billion forecast by analysts.
The retailer mentioned the double-digit drop in gross sales 12 months over 12 months was primarily as a result of diminished foot site visitors in its shops throughout the pandemic, in addition to ongoing retailer closures in some markets the place Covid restrictions have remained in place. In Europe, for instance, greater than 40% of Levi’s shops at the moment are closed, with others working on diminished hours, the corporate mentioned.
Levi’s wholesale income fell 4% throughout the newest quarter, marking an enchancment from the prior interval.
Direct-to-consumer gross sales have been down 26%, as a consequence of fewer prospects visiting Levi’s shops and particularly in markets that depend on tourism. The decline was partially offset by a 25% improve within the firm’s owned e-commerce gross sales throughout the quarter, Levi’s mentioned. Whole on-line income, which incorporates digital gross sales from wholesale companions, was up 41%.
Although tendencies within the enterprise are bettering, earnings and gross sales are anticipated to proceed to be “considerably adversely impacted” at the very least by the second quarter of 2021, Levi’s mentioned.
The corporate raised its outlook for each income and revenue within the first half of the 12 months, assuming that the pandemic would not worsen.
Gross sales at the moment are anticipated to develop 24% to 25%, and adjusted earnings are forecast to be in a spread of 41 cents to 42 cents, which means earnings of seven cents to eight cents throughout the fiscal second quarter. Analysts had been calling for second-quarter earnings of 5 cents a share.
Levi’s shares are up almost 25% 12 months thus far. The corporate has a market cap of $10 billion.
Discover the total press launch from Levi’s right here.