Levi Strauss Reports Solid First-Quarter Earnings
Just weeks after going public, Levi Strauss & Co., based in San Francisco, reported that its first-quarter revenues for 2019 were up 7 percent to $1.435 billion over the same period last year. Net income in the first quarter was $147 million compared with a $19 million net loss during last year’s first quarter.
The region that performed the best for the company was the Americas, which encompasses the United States, Canada and Latin America. Revenues in those geographic areas were up 9 percent to $717 million while in Asia revenues inched up 8 percent to $253 million, but revenues rose only 3 percent in Europe, to $465 million.
Chip Bergh, the company’s chief executive officer and president, noted that this was the sixth consecutive quarter of double-digit constant-currency revenue growth. “This shows the strategic results of our plan seven years ago to become a world-class omni-channel retailer,” he said in a conference call following the earnings results released on April 9.
Bergh noted that growth in the first quarter was driven mostly by Levi’s women’s business, which grew by 18 percent. “Skinny jeans and high-rise styles continue to be popular,” Bergh said.
Men’s bottoms sales were up 6 percent in the first quarter and still made up the largest percentage of revenues. “Wholesale business was up 8 percent despite continued door closures,” the CEO said.
Levi’s continues to open its own stores. At the end of the first quarter, it had 70 more stores than during the same time last year. Its retail plan for fiscal 2019 is to unveil 100 doors.
E-commerce business was up 24 percent over last year. The company has a plan to roll out an online shop later this year, and a pickup-in-store feature to help boost sales.
Looking around the globe, the company still feels there is a lot of untapped business to be found in China, where revenues inched up 5 percent in the first quarter compared to last year. “China continues to be a huge long-term operation for us,” Bergh said. “Part of the challenge is setting up the team. There is still more work to do on the franchise business. We feel we have barely scratched the surface.”
Looking at the rest of 2019, Levi’s chief financial officer, Harmit Singh, said the company that makes clothing under the Levi’s, Dockers, Signature and Denizen labels should see revenue grow in the mid single digits. “This may sound conservative, but it is still early in the year and there are uncertainties,” he noted.
Levi’s, which was a public company from 1971 to 1985, returned to being a publicly traded entity in late March. Its stock opened at $17 a share when it debuted on the New York Stock Exchange. Recently, it closed at around $22.88.