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Tag: straus

  • Levi’s boosts margins by retaining same price levels online

    Levi’s boosts margins by retaining same price levels online

    Denim brand Levi’s plans to scale back shipments to off-price retailers in the US as it targets a further improvement in gross margin and long-term ambitions in the growing Chinese market.

    The company ended the year reporting US$1.57 billion in sales, slightly behind analyst estimates, but with a gross margin up by 100 basis points compared to the prior year.

    Sales in Europe rose by 5 percent and its operating profit thereby a healthy 47 percent, but sales in Asia rose by just 1 percent, and operating profit there took a 43-per-cent hit, largely due to civil unrest in Hong Kong and India.

    While the company expects to take a hit in Mainland China after closing about half of its stores there in response to the coronavirus outbreak, the company says its sales there account for just 3 percent of its global turnover.

    “It probably puts a damper – at least in the short-term – for our growth plans in China, but we are here for the long-term,” CFO Harmit Singh said. “We are still long on China.”

    Singh said the company would restrict shipments to off-price retailers like Ross Stores and TJ Maxx, which erode profit margins. It will sell more products into a joint venture with discount department store Target and into other higher-priced retailers like department stores.

  • Levi Strauss Asia sales Books good Sales Numbers

    Levi Strauss Asia sales Books good Sales Numbers

    Levi Strauss Asia sales grew 12 per cent in the second quarter (on a constant-currency basis) with strong performance across both wholesale and direct-to-consumer channels.

    Globally, the denim-led lifestyle-fashion retailer achieved 9-per-cent growth on a constant-currency basis, however second-quarter income fell by US$49 million, largely due to $29 million in costs relating to the company’s IPO.

    Gross profit for the second quarter rose 4 per cent to $700 million.

    “Our second quarter and first half results reflect the continued strength of our diversified business model as we delivered broad-based growth across all brands, regions and key product categories despite a challenging retail and macroeconomic environment,” said Levi Strauss & Co president and CEO Chip Bergh.

    “For both periods, the Levi’s brand grew in all three regions across men’s, women’s, tops and bottoms and maintained its position at the centre of culture through iconic products and consumer experiences.”

    In Asia, revenue growth was broad-based across the region’s markets. The region’s operating income grew 4 per cent on a reported basis and 15 per cent on a constant-currency basis, reflecting higher revenues partially offset by a decline in gross margin and higher direct-to-consumer costs.

    Globally, sales by the company’s direct-to-consumer business grew by 9 per cent in the second quarter, primarily due to performance and expansion of the retail network and e-commerce growth. The company had 78 more company-operated stores at the end of the second quarter of this year than it did 12 months earlier. The company’s wholesale business grew reported revenues by 3 per cent, reflecting growth in all the regions.

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