Levi’s Raises Outlook After Releasing First Quarter Results
Denim giant Levi Strauss & Co. continues to navigate the fallout from the COVID-19 pandemic. For its first financial quarter of 2021, released April 8, the brand reported net revenues of $1.3 billion, down 13 percent compared to the same quarter the previous year. The decline was attributed to closures of company-operated stores as well as third-party retail locations.
However, Levi’s global digital net revenues grew 41 percent in the first quarter. The success of digital sales gave the company the confidence to raise its outlook for the first half of this year to net revenues growing 24 to 25 percent over the first half of 2020. It also raised its first-half adjusted earnings per share to between 41 and 42 cents, said Chip Bergh, Levi Strauss & Co.’s chief executive officer.
“Our strong results this quarter were driven by faster-than-expected recovery in our business from our relentless focus on the priorities that are driving outsized performance,” Bergh said. “We continue to lean into our strategies, leading with our brands, investing in direct-to-consumer and diversifying our business while still operating prudently to manage the ongoing uncertainty, especially in Europe. As the vaccine rollout continues and consumer excitement returns, I am more confident than ever that we will emerge from the pandemic a stronger business and drive sustainable, profitable growth.”
Levi’s broke down performance by its international markets. In the Americas, net revenues declined 14 percent. Operating income in the Americas increased due to higher gross margins driven by the San Francisco–based company’s cost-reduction campaigns, which were a response to the pandemic. In Europe, net revenues declined 16 percent. In Asia, net revenues declined 5 percent on a reported basis and 8 percent on a constant-currency basis.