An worker holds a buying bag whereas ringing up a buyer on the Levi Strauss & Co. flagship retailer in San Francisco, March 18, 2019.
David Paul Morris | Bloomberg | Getty Images
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.
But the denim maker boosted its gross sales and revenue outlook for the first half of the yr, assuming the worldwide well being disaster does not develop into 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 results point to really good evidence that we will emerge from the pandemic a stronger company,” CEO Chip Bergh advised CNBC. “We beat our own expectations internally [and] beat external expectations, despite having a third of our stores closed in Europe over the entire quarter.”
Here’s 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
- Revenue: $1.31 billion vs. $1.25 billion anticipated
Levi’s web revenue declined barely to $142.5 million, or 35 cents per share, from $152.7 million, or 37 cents per share, a yr earlier. Excluding one-time fees, the corporate earned 34 cents per share, higher than the 25 cents forecast by analysts, in line with Refinitiv.
Total income fell about 13% to $1.31 billion from $1.51 billion a yr earlier. That got here in higher than the $1.25 billion forecast by analysts.
The retailer stated the double-digit drop in gross sales yr over yr was primarily because of the diminished foot site visitors in its shops throughout the pandemic, as properly as 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 presently are closed, with others working on diminished hours, the corporate stated.
Levi’s wholesale income fell 4% throughout the newest quarter, marking an enchancment from the prior interval.
Direct-to-consumer gross sales had been down 26%, on account of fewer prospects visiting Levi’s shops and particularly in markets that depend on tourism. The decline was partially offset by a 25% enhance within the firm’s owned e-commerce gross sales throughout the quarter, Levi’s stated. Total on-line income, which incorporates digital gross sales from wholesale companions, was up 41%.
Though developments within the enterprise are enhancing, earnings and gross sales are anticipated to proceed to be “significantly adversely impacted” at the least by means of the second quarter of 2021, Levi’s stated.
The firm raised its outlook for each income and revenue within the first half of the yr, assuming that the pandemic does not worsen.
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 suggests earnings of 7 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 practically 25% yr to this point. The firm has a market cap of $10 billion.