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Tag: Levi Strauss

  • Levi Strauss & Co. Sees Robust Q3 Growth Driven By Direct-to-consumer Sales Surge

    Levi Strauss & Co. Sees Robust Q3 Growth Driven By Direct-to-consumer Sales Surge

    Levi Strauss & Co. continues to prove its strength in the retail industry, experiencing significant profit in the third quarter. The primary factor driving this growth is the double-digit increase in sales through the company’s direct-to-consumer (DTC) channel.

    Financial Performance

    By the end of the third quarter on August 31, the firm’s net revenues had reached $1.5 billion, showing a 7% rise year-on-year. This growth is consistent in both reported and organic terms. Sales in the Americas, Asia, and Europe also saw considerable increases, with 6%, 12%, and 5% respectively. Specifically, the U.S. saw a 3% increase in sales, reflecting the company’s strong presence in the domestic market.

    The DTC channel played a significant role in this surge with net revenues increasing by 11% as per reported data and 9% organically. This is attributed to a 7% jump in the U.S., a 4% rise in Europe, and a staggering 14% surge in Asia. Meanwhile, wholesale net revenues also observed an uptick, though at a slower pace, with a 3% rise in reported terms and a 5% increase organically.

    Profit and Future Strategy

    The company’s operating margin saw remarkable growth, reaching 10.8% from the previous year’s 2.3%. The gross margin also improved by 110 basis points to a robust 61.7%. The driving factors for this improvement were a favorable channel mix and price increases, which were slightly offset by the effects of import tariffs.

    The net income from continued operations, excluding the Dockers business, stood at $122 million, a significant increase from last year’s $23 million. The company also successfully sold the Dockers intellectual property and operations in the U.S. and Canada for $194.7 million as of July 31. The remaining operations are projected to be sold in the first quarter of the upcoming year.

    The President and CEO of Levi Strauss & Co., Michelle Gass, lauded the company’s impressive performance, attributing it to the strategic shift towards becoming a DTC-first, comprehensive denim lifestyle retailer. Despite the complex macroeconomic environment, Gass expresses optimism about the company’s ability to sustain this profitable growth well into 2026 and beyond.

    Expectations for the Coming Year

    Levi Strauss & Co. has revised its full-year guidance upward, predicting a 3% increase in net revenues. This is a significant rise from the 1-2% growth forecast provided in the second quarter. This prediction assumes that import tariffs from China will remain at 30% and the rest of the world at 20%.

    Questions & Answers

    What was the primary driver behind Levi Strauss & Co’s growth in the third quarter?
    The key driver was the double-digit growth in sales from the company’s direct-to-consumer (DTC) channel.

    What led to the improved operating margin of Levi Strauss & Co.?
    The improvement in operating margin was driven by a favorable channel mix and price increases, partially offset by the impact of tariffs.

    What are Levi Strauss & Co.’s growth expectations for the upcoming year?
    For the coming year, the company predicts a 3% increase in net revenues, assuming that import tariffs remain the same.

  • Veteran Leader Hiren Gor Appointed As Levi Strauss & Co.’s Managing Director For Emerging Markets

    Veteran Leader Hiren Gor Appointed As Levi Strauss & Co.’s Managing Director For Emerging Markets

    Levi Strauss & Co has appointed Hiren Gor as the Managing Director for the South Asia, Middle East, and Africa (SAMEA) region, effective immediately.

    Gor is a veteran leader with a 16-year tenure at Levi’s, with his previous role being the General Manager for South Asia. During his time in the company, Gor has spearheaded retail expansion efforts, implemented the iconic store strategy, and increased the company’s digital and omnichannel operations. His promotion is aimed at aligning with Levi’s strategic plan of enhancing its footprint in crucial emerging markets.

    In his latest position, Gor will manage operations across South Asia, the Middle East, and Sub-Saharan Africa. He will be focused on fostering growth and intensifying the company’s presence in these diverse and highly competitive markets.

    Gor’s strategic clarity, operational excellence, and strong affiliation with the brand have been highly praised by the company. Gianluca Flore, the Chief Commercial Officer at Levi Strauss & Co., expressed his confidence that Gor’s leadership will continue to enhance the company’s commercial performance and deepen its influence across these dynamic markets.

    Levi Strauss & Co. has recently reported promising second-quarter results, exceeding initial expectations. The financial report for the second quarter, which ended on June 1, revealed a 6% increase in net revenues on a reported basis and a 9% rise on an organic basis, amounting to US$1.4 billion.

    Questions & Answers

    Who is the newly appointed Managing Director for the SAMEA region at Levi Strauss & Co.?
    Hiren Gor has been appointed as the new Managing Director for the South Asia, Middle East, and Africa (SAMEA) region at Levi Strauss & Co.

    What were some of Gor’s achievements during his previous role at the company?
    During his tenure, Gor led retail expansion efforts, implemented the iconic store strategy, and grew the company’s digital and omnichannel operations.

    What were the second-quarter financial results for Levi Strauss & Co.?
    The company reported a 6% increase in net revenues on a reported basis and a 9% rise on an organic basis, reaching US$1.4 billion.

  • Levi Strauss forecast disappoints as pandemic resurgence shutters stores

    Levi Strauss forecast disappoints as pandemic resurgence shutters stores

    Levi Strauss & Co on Wednesday forecast first-quarter results below analysts’ estimates as the resurgence of COVID-19 shutters the denim maker’s stores in major markets, sending its shares 9% lower in extended trading.

    The spike in coronavirus cases from late last year has led to lower traffic at stores and fresh capacity restrictions for shopping centers in key regions such as California, denting retailers’ sales during the crucial holiday shopping season.

    Levi said 17% of its stores globally were still closed, with a new wave of lockdowns in Europe shuttering 40% of the company’s footprint there.

    The San Francisco-based company said it expects those stores to remain closed for the rest of the current quarter, resulting in a 10 cents to 12 cents hit to its earnings per share.

    Including that impact, Levi forecast first-quarter adjusted earnings per share of 20 cents to 24 cents, below expectations of 33 cents per share, according to Refinitiv IBES data.

    The company said it expects quarterly revenue to be down by a high-teens percentage in constant currency, more than estimates of an 11.9% drop.

    However, the company could return to pre-pandemic revenue levels by the end of 2021 if conditions do not worsen, Chief Financial Officer Harmit Singh said.

    Levi also beat estimates for the fourth quarter ended Nov. 29 as online sales soared.

    Total revenue in the quarter fell about 12% to $1.39 billion but beat expectations of $1.34 billion.

    Levi earned 20 cents per share on an adjusted basis, beating estimates of 15 cents per share.

    The company also reinstated its quarterly dividend at 4 cents per share.

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  • Levi Strauss ‘deliberate’ in moving production away from China

    Levi Strauss ‘deliberate’ in moving production away from China

    Levi Strauss & Co has been “deliberate and diligent” in moving production out of China because of uncertainty hanging over tariffs on goods imported from China, CEO Chip Bergh has told Reuters in an interview.

    Just 1 percent or 2 percent of Levi’s product sold in the US are manufactured in China, Bergh said, compared to 16 percent two years ago. Bergh was speaking one day before President Donald Trump said he would impose tariffs on another US$300 billion of Chinese goods, including apparel.

    Trump has used tariffs as a tool to negotiate better trade terms, saying bad deals cost millions of US jobs. Along with apparel, the new tariffs hit consumer goods such as electronics and toys and come in addition to those already imposed on $250 billion of other goods imported from China.

    The on-again, off-again nature of the US tariffs on Chinese goods had created uncertainty for many US retailers, Bergh said.

    “Every day is a new day,” he said. “Sometimes it looks like it’s definitely going to happen and then other days you think it’s off, it’s not going to happen.”

    San Francisco-based Levi’s, which returned to the public markets in March, is part of a wave of retailers that have been shifting supply chains out of China to countries such as Vietnam and Bangladesh. The trend was initially in response to higher Chinese wages but the exodus is expected to be accelerated by the new tariffs, which Trump said will go into effect September 1.

    They are expected to increase consumers’ costs and have an impact across the entire retail industry.

    Apparel retailers like Gap Inc, shoes and accessories brand Steve Madden and department store Macy’s have also acted to move production out of China.

    However, China still is a big supplier to the industry with 42 percent of apparel and 69 percent of footwear sold in the US made in China, according to the American Apparel and Footwear Association.

    Following the latest tariff news, several large retail trade groups warned the levied tariffs will hurt consumer purchases, raise prices and limit hiring.

    Levi’s has two of its own factories in Poland and South Africa but mostly uses third-party vendors or suppliers spread across 22 different countries, said Bergh, who joined the company in September 2011.

    “We’ve narrowed down our supplier base during the time that I’ve been here to really develop deeper, more strategic relationships with many of our suppliers,” he said.

    Many of Levi’s suppliers in China are publicly traded companies that have multi-country footprints, said Bergh, that have diversified risk by building factories in places like Vietnam and Cambodia.

    Levi’s also has put contingency plans in place “not just for China but also for Mexico in the event that NAFTA gets ripped up in a moment of rage or something,” Bergh said.

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  • Levi’s to opening 100 extra stores this year

    Levi’s to opening 100 extra stores this year

    San Francisco-based retailer Levi Strauss announced plans to open 100 new company-operated stores this year.

    The apparel maker, which launched on the US stock market last month, announced its plans for the store openings alongside a well-received debut batch of earnings as a public company.

    Company chief executive Chip Bergh told that most of the store openings would be in Europe and Asia, though mainline and outlet stores would open in the US as well.

    Levi’s posted a 7 per cent jump in net revenue to US$1.43 billion for the quarter ending February 24. The company produced a net income of US$147 million compared with the losses of US$19 million a year ago, when the results were hit with a tax-related charge.

    “We delivered our sixth consecutive quarter of double-digit constant-currency revenue growth,” Bergh said.

    “Growth was broad-based across all three regions and all channels, demonstrating that our strategies are working and our investments are paying off.”

    The 166-year-old brand operates 824 standalone stores, including 74 the retailer opened last year.

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  • Levi Strauss Asia growth slows down

    Levi Strauss Asia growth slows down

    Levi Strauss Asia growth last quarter was solid – but well behind the US and Europe rates.

    Higher profit in all three regions reflects improved margins.

    Levi Strauss Asia sales were up 9 per cent compared to a 46 per cent rise in Europe and 14 per cent in the Americas. But operating income in Asia rose 13 per cent, while in Europe it surged 79 per cent and in the Americas by 23 per cent.

    “The momentum and growth trends we saw in the back half of last year not only continued but accelerated in the first quarter,” says president/CEO Chip Bergh. “Our results clearly show our strategies are working and that the incremental investments we are making in marketing, direct-to-consumer expansion and our more diversified portfolio are paying off.”

    Excluding favourable currency effects of US$10 million, net revenues in Asia grew 5 per cent, reflecting direct-to-consumer expansion and performance.

    Net revenues overall grew 22 per cent on a reported basis and 16 per cent excluding $55 million in favourable currency translation effects, driven by broad-based brand growth in all regions and channels.

    Direct-to-consumer revenues grew 24 per cent on the improved performance and an expansion of the company’s retail network, as well as e-commerce growth. The company had 56 more self-run stores at the end of the first quarter than 12 months earlier.

    Net income fell $79 million because of a $136 million provisional non-cash tax charge. Excluding this, adjusted net income was $117 million, nearly double last year’s $60 million.

    Gross margin for the first quarter was 54.9 per cent of revenues, compared with 51.2 per cent in the same quarter last year, reflecting the margin benefit from revenue growth in the direct-to-consumer channel and international business, lower product-sourcing costs and favourable currency exchange rates.

    Operating income of $174 million was up 61 per cent for the first quarter while operating margin increased to 13 per cent.

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  • New USA tariff plan draws backlash from US retailers

    New USA tariff plan draws backlash from US retailers

    Failing US president Donald Trump is facing widespread backlash from US retailers and brands over his intention to trigger a trade war with China and other nations.

    Just days after announcing tariffs on steel imports against the advice of officials, lawmakers and industry, Trump is now believed to be formulating sweeping tariffs on imported goods from China – a move retail and business groups warn will wipe away gains for the economy from the recent tax cuts.

    “This is not American industries crying wolf,” said Sandy Kennedy, president of the Retail Industry Leaders Association, which organised a letter to Trump, sounding alarm that such tariffs will boost prices of numerous consumer goods, including shoes, apparel and appliances.

    Twenty-four US retailers signed Kennedy’s letter, including Walmart, Target, Best Buy, Abercrombie & Fitch, American Eagle Outfitters, Columbia Sportswear, Costco, Dollar Tree, Gap, JC Penney, Kohl’s, Ikea, Levi Strauss, Sears, VF Corp and Wolverine World Wide.

    A second letter was signed by 82 shoe companies, including Nike, Payless ShoeSource, Under Armour and Shoe Carnival.

    “Adding even more tariffs on top of this heavy burden would mean higher costs for footwear consumers and fewer US jobs,” one of the letters said.

    “Given the price sensitivity of our products, any additional increases in our costs would strike right at the heart of our ability to keep product competitively priced for our consumers.”

    One of the issues worrying retailers and manufacturers is that Trump does not need approval from Congress to implement tariffs. He can impose unilateral tariffs on China citing national security grounds – the same rationale behind the steel tariffs – because a US government investigation had found Chinese had violated intellectual property rules.

    Trump has previously stated he does not fear a trade war because he believes America would win it.

    Widespread media debate about tariffs and the rationale behind them would also distract public attention from numerous controversies surrounding the Trump presidency, including a growing list of women revealing extramarital affairs with him, election tampering and his links to a company under investigation by the FTC for stealing personal details of 50 million Facebook users.

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  • Levi Asia bullish

    Levi Asia bullish

    Asia will be the backbone of global denim wear brand Levi & Strauss growth in the short and long term according to its CEO.

    Despite the slowing economic growth in the region, driven by China’s marked slowdown, Levi CEO and global president Chip Bergh says his company remains upbeat about consumer spending regionally.

    “We are very optimistic,” Bergh told Channel News Asia in an interview, (you can read the full text and watch the video here).

    “Despite the reported (growth) slowdown in markets like China, this is still going to be our fastest growing region, both short- and long-term.”

    He says the main driver will be the rapidly growing ranks of young Chinese consumers joining the middle class, who have strong emotional attachments to brands and who are eager to buy branded goods.

    “The demographics work to our advantage and we are strategically focused on Asia as a result of that,” Bergh told Channel News Asia.

    The soaring value of the US currency has impacted on Levi & Strauss margins in the region – and its reported earnings in its home currency. As a result the company had adjusted product prices in some markets “to protect the long-term structural economics of our business”.

    “At the same time, we are also working on the cost side of the equation to protect our growth margins and so we’ve been able to continue to grow and grow profitably,” said Bergh.

    In the third quarter of 2015, Levi’s reported a 15 per cent jump in earnings to US$58.2 million, thanks to double-digit growth in its women’s apparel collection and continued strength of the international retail business, including Levi Asia.

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  • Levi Strauss aims to revive its past glory

    Levi Strauss aims to revive its past glory

    Founder Levi Strauss patented the blue jeans in 1873 but the brand itself was established in 1853, and today its jeans can be found in over 2,800 stores in 110 countries.

    Although long enjoying iconic status, it has been difficult for Levi’s to consistently stay relevant and be at the centre of culture. It was 1996 when Levi Strauss reached its peak year, amassing USD7.1 billion of global sales – even bigger than Nike, which booked USD6.5 billion in sales that year.

    Entering 2001, the denim maker saw its sales plummet to USD4.1 billion – which for the next decade became the norm. The challenge today is that customers in its biggest markets, the United States and Europe, are not out spending on retail. And CEO Chip Bergh sees that over the past decade, denim and apparel in general has been on the decline.

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