An employee holds a shopping bag while calling a customer at Levi Strauss & Co. flagship store in San Francisco, March 18, 2019.
David Paul Morris | Bloomberg | Getty Images
Levi Strauss & Co. reported a double-digit decline in fiscal policy in the first quarter on Thursday as ongoing store closures in Europe and ease of foot traffic in the U.S. due to the Covid pandemic outweighed the results.
But the denim manufacturer boosted its outlook for sales and profits in the first half of the year, provided the global health crisis does not get worse from here. CFO Harmit Singh said in an interview with CNBC that the company expects sales to return to 201
Its shares jumped more than 6% in aftermarket trading.
“These results point to very good evidence that from a pandemic we will emerge as a stronger company,” CEO Chip Bergh told CNBC. “We meet our own expectations internally [and] beat external expectations, despite the fact that a third of our stores are closed in Europe throughout the quarter. “
Here’s how the company fared in its quarter ending February 28, compared to what analysts expected, based on a survey conducted by Refinitiv:
- Earnings per Share: 34 cents adjusted against 25 cents expected
- Revenue: $ 1.31 billion versus $ 1.25 billion expected
Levi’s net income fell slightly to $ 142.5 million, or 35 cents per share. Shares from $ 152.7 million or 37 cents a share. Share a year earlier. Excluding one-time fees, the company earned 34 cents per. Stock, better than the 25 cents analysts had expected, according to Refinitiv.
The total turnover fell approx. 13% to $ 1.31 billion from $ 1.51 billion the year before. It came in better than analysts’ forecast of $ 1.25 billion.
The retailer said the double-digit drop in sales year-over-year was primarily due to the reduced foot traffic in its stores during the pandemic as well as ongoing store closures in some markets where Covid restrictions have been in place. In Europe, for example, more than 40% of Levi’s stores are currently closed, while others are working reduced hours, the company said.
Levi’s wholesale revenue decreased 4% in the last quarter, which is an improvement over the previous period.
Sales directly to the consumer fell by 26% due to fewer customers visiting Levi’s stores and especially in markets that depended on tourism. The decline was partially offset by a 25% increase in the company’s owned sales of e-commerce during the quarter, Levi’s said. Total online revenue, which includes digital sales from wholesale partners, increased 41%.
Although trends in the business are improving, earnings and sales are expected to continue to be “significantly negatively impacted” at least through the second quarter of 2021, Levi’s said.
The company raised its outlook for both revenue and profit in the first half of the year, provided the pandemic does not worsen.
Sales are now expected to grow 24% to 25%, and adjusted earnings are expected to be in the range of 41 cents to 42 cents, implying earnings of 7 cents to 8 cents in the fiscal second quarter. Analysts had demanded second-quarter earnings of 5 cents per share. Shares.
Levi’s shares have risen almost 25% year over year to date. The company has a market value of $ 10 billion.
Find the full press release from Levi’s here.