Levi’s clothes can be seen on a store shelf in Miami, Florida.
Joe Raedle | Getty Images
Levi Strauss & Co. reported on Wednesday that its total sales in the quarter fell 12%, marking an improvement over a drop of more than 20% in the previous period, as the weak buyer traffic in its stores was partially offset by double-digit online growth.
Shares recently rose more than 1% on the floor after hours, after an initial drop of more than 4%.
Chief Executive Chip Bergh told CNBC that the results for the last quarter exceeded the jeans maker’s internal expectations, almost reaching the “best case” that Levi presented when the Covid pandemic began to hit the United States and disrupt many businesses.
“We turn a lot to [direct to consumer] and especially for e-commerce, “said Bergh in a telephone interview.” Our e-commerce business was profitable in the fourth quarter and profitable throughout the year. “
Levi’s global digital sales, which include online sales of its goods to wholesale partners, accounted for 23% of fourth quarter sales, up from 15% in the same period last year.
See how Levi Strauss & Co. fared during the fourth fiscal quarter compared to what analysts had expected, using Refinitiv data:
- Earnings per share: 20 cents, adjusted, vs. 15 cents, expected
- Revenue: $ 1.39 billion versus $ 1.34 billion, expected
In the three-month period ended November 29, Levi earned $ 57 million, or 14 cents per share, compared with $ 96 million, or 23 cents per share, a year earlier. Excluding one-time charges, he earned 20 cents per share, which was better than the 15 cents expected by analysts, using data from Refinitiv.
Net revenue fell 12% to $ 1.39 billion, from $ 1.57 billion a year earlier. This was better than the $ 1.34 billion forecast by analysts.
Digital sales worldwide increased 34%, which includes sales made on partner platforms like Amazon.
Levi said his wholesale partners’ revenue fell 15% during the quarter, while his direct consumer revenue fell 5% due to fewer visits to his stores.
As the coronavirus pandemic continues to disrupt normal business operations, the company said that currently about 40% of its stores in Europe and 17% worldwide, including locations operated by franchisees, are closed.
“The recent resurgence of the virus highlights that the final impact of the Covid-19 pandemic remains highly uncertain,” said Levi in his release. “The company expects its business … to continue to suffer a significant adverse impact at least during the first half of 2021, and there is still the possibility of additional inventory related to Covid-19 and other charges.”
Levi’s shares, at the close of the market on Wednesday, rose a little more than 8% over the previous year. The company has a market value of US $ 8.8 billion.
Find the full Levi Strauss & Co. press release here.