Levi Strauss & Co. (LEVI) Q3 Financial 2020 27% decline in sales – tech2.org

Levi Strauss & Co. (LEVI) Q3 Financial 2020 27% decline in sales


A Levi’s logo on the shop window of Levi Strauss & Co. in London.

Chris Ratcliffe | Bloomberg Getty Images

Levi Strauss & Co. shares rose more than 9% on Tuesday after Davey Maker reported online sales growth of 52%, which helped offset losses elsewhere in the business during the fiscal third quarter.

Overall, sales fell 27% and net income fell 78% as Coronavirus epidemic store closures. But far less than the target the company had set was to achieve the internal goal.

CEO Chip Berg cited recent investments in building the expected performance that would strengthen Levy’s direct-to-consumer business. The company also gained market share in the major women’s apparel category. Berg said it relies less on promotion to close the goods.

“This quarter was much better than we expected, and it was a little bit of experience for me to say that revenue was down 27% … but we were profitable,” Berg said in an interview with CNBC.

“Every action we took, the hard choices we had to make very quickly in the epidemic, are really starting to pay off,” he said.

Based on refinitive data, Levy compared what it was expecting during its third quarter with data ending August 23:

  • Earnings per share: 8 cents, adjusted, vs. 22 cents expected loss
  • Revenue: $ 1.06 billion vs. $ 822.2 million expected

Levy’s net income fell from $ 124 million, or 30 cents per share, to $ 27 million, or 7 cents per share, a year earlier. Levy earned 8 cents per share, which was better than the estimated loss of 22 cents, according to Refinitiv.

Net revenue fell from $ 1.45 billion to $ 1.06 billion a year earlier, beating expectations of $ 822.2 million.

In the US, its net sales fell 29%, while they were down 16% in Europe and 42% in Asia.

The company said that its digital revenue globally, including sales of its own websites as well as its wholesale partners such as Amazon, grew 50% year-over-year, and about 24% of third-quarter sales – two years. First level.

Levy.com alone had 52% of sales, As customers came to Levi’s website for school-denim and tees. The company noted that online sales remained strong, even re-stores during the epidemic.

Wholesale revenue fell 29%, while direct-to-consumer sales, including sales from Levi-owned stores and 22% from Levi.com, were up. The company said sales from wholesale partners such as department stores currently account for about 10% of its total business, compared to 15% historically. And CFO Harmeet Singh told CNBC that the company aims to maintain its wholesale business at 10% -per cent, with a focus on increasing direct-to-consumer revenue, for the long term.

Levy said that it expects its business to suffer greatly from the uncertainty created by the epidemic for at least 2020, with its results likely to be weighed.

It said that by the end of the third quarter its total inventions had increased by 1% compared to a year earlier, which puts them in a “healthy” state before the holidays.

Barg said of the upcoming holiday season, “I am completely optimistic that we are not going down the rabbit hole on the hype … which I think is good for the health of the brand.”

With Tuesday’s market close, Levi’s shares are down about 22% this year. The company has a market cap of about $ 6 billion.

Read the full earnings press release here.

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