Levi Strauss & Co. (LEVI) Q3 fiscal 2020 gross sales fall 27% – Information by Automobilnews.eu

Levi Strauss & Co. (LEVI) Q3 fiscal 2020 gross sales fall 27%

Levi Strauss & Co. shares soared greater than 9% Tuesday after the denim maker reported on-line gross sales progress of 52%, which helped offset losses elsewhere within the enterprise throughout the fiscal third quarter. 

Administration informed analysts it expects the sturdy efficiency will proceed into the vacation quarter, although it’s calling for gross sales to be down 14% to fifteen% yr over yr throughout the interval, assuming the pandemic doesn’t worsen. The corporate additionally stated it is going to cease paying a dividend within the fourth quarter, but it surely goals to renew payouts in 2021, ought to the optimistic developments proceed. 

Levi’s third-quarter gross sales fell 27% resulting from coronavirus pandemic-related retailer closures, and web revenue tumbled 78%. However the declines have been lower than the corporate had anticipated, topping inner targets. 

CEO Chip Bergh cited current investments in constructing out Levi’s direct-to-consumer enterprise for the stronger-than-expected efficiency. The corporate additionally gained market share in the important thing ladies’s attire class. And it relied much less on promotions to maneuver merchandise off cabinets, Bergh stated. 

“This quarter was a lot better than we anticipated, and it is just a little little bit of an out-of-body expertise for me to say that when revenues are down 27% … however we have been worthwhile,” Bergh stated in an interview with CNBC. 

“All the actions that we took, the powerful selections that we needed to make very early within the pandemic, are actually beginning to repay,” he stated. In July, the corporate introduced it was slashing about 15% of its international company workforce, impacting about 700 jobs. 

This is how Levi’s did throughout its third quarter ended Aug. 23 in contrast with what analysts have been anticipating, based mostly on Refinitiv knowledge: 

  • Earnings per share: 8 cents, adjusted, vs. a lack of 22 cents anticipated 
  • Income: $1.06 billion vs. $822.2 million anticipated 

Levi’s web revenue fell to $27 million, or 7 cents per share, from $124 million, or 30 cents a share, a yr earlier. Excluding one-time expenses, Levi’s earned 8 cents per share, higher than an anticipated lack of 22 cents, in keeping with Refinitiv. 

Web income fell to $1.06 billion from $1.45 billion a yr earlier, beating expectations of $822.2 million. 

Within the Americas, its web gross sales fell 29%, whereas they have been down 16% in Europe and down 42% in Asia. 

The corporate stated its digital income globally, which incorporates gross sales by itself web sites in addition to its wholesale companions like Amazon, grew 50% yr over yr, and made up about 24% of third-quarter gross sales — double year-ago ranges. 

Gross sales from Levi.com alone have been up 52%, as prospects flocked to Levi’s web site for back-to-school denim and tees. The corporate famous on-line gross sales have remained sturdy, at the same time as shops reopen throughout the pandemic. 

Wholesale income fell 29%, whereas direct-to-consumer gross sales, which embrace gross sales from Levi’s owned shops and from Levi.com, have been down 22%. The corporate stated gross sales from wholesale companions like department shops at present make up about 10% of its whole enterprise, in contrast with 15% traditionally. And CFO Harmit Singh informed CNBC the corporate goals to maintain its wholesale enterprise on the 10%-target, longer-term, with the main target being positioned on rising direct-to-consumer income. 

The corporate famous progress throughout the quarter promoting extra to ladies — objects like crop tops and tattered denim shorts. Girls’s attire in 2015 was simply 20% of Levi’s whole enterprise, and has grown to 37% at present. Levi’s stated its longer-term goal for the ladies’s class is 50% of whole gross sales. 

Levi’s stated it expects its enterprise to be considerably harm from the uncertainty created by the pandemic for a minimum of the remainder of 2020, with the potential for coronavirus-related expenses weighing on its outcomes. 

It stated its whole inventories by the top of the third quarter have been up 1% in contrast with a yr earlier, placing them in a “wholesome” place forward of the vacations. 

“I’m cautiously optimistic that we’re not going to must go down the rabbit gap on promotions … which I believe is sweet for model well being,” Bergh stated in regards to the upcoming vacation season. 

CFO Singh stated Levi’s expects its fourth-quarter profitability to be about flat, to barely up, in contrast with the prior yr. 

As of Tuesday’s market shut, Levi’s shares are down about 22% this yr. The corporate has a market cap of roughly $6 billion. 

Learn the complete earnings press launch right here. 

Levi Strauss & Co. (LEVI) Q3 fiscal 2020 gross sales fall 27% – Information by Automobilnews.eu


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