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. because of the 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 does not turn out to be worse from right here. CFO Harmit Singh stated 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 your complete quarter.”
This is how the corporate did for its quarter ended Feb. 28, in contrast with what analysts had been anticipating, primarily based 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 web earnings 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 fees, the corporate earned 34 cents per share, higher than the 25 cents forecast by analysts, in keeping with 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 stated the double-digit drop in gross sales 12 months over 12 months was primarily because of the diminished foot site visitors in its shops through 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 stated.
Levi’s wholesale income fell 4% through the newest quarter, marking an enchancment from the prior interval.
Direct-to-consumer gross sales had been down 26%, resulting from fewer clients 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 through the quarter, Levi’s stated. Whole on-line income, which incorporates digital gross sales from wholesale companions, was up 41%.
Although developments within the enterprise are enhancing, earnings and gross sales are anticipated to proceed to be “considerably adversely impacted” at the least by means of the second quarter of 2021, Levi’s stated.
The corporate raised its outlook for each income and revenue within the first half of the 12 months, assuming that the pandemic does not worsen.
Gross sales at the moment are anticipated to develop 24% to 25%, and adjusted earnings are forecast to be in a variety of 41 cents to 42 cents, which means earnings of seven cents to eight cents through the fiscal second quarter. Analysts had been calling for second-quarter earnings of 5 cents a share.
Levi’s shares are up practically 25% 12 months thus far. The corporate has a market cap of $10 billion.