Levi’s clothes are seen on a store shelf in Miami, Florida.
Joe Raedle | Getty Images
Levi Strauss & Co reported on Wednesday that total sales fell by 12% during the holiday quarter, which was an improvement over a drop of more than 20% in the previous period, as poor retail traffic at its stores was partially offset by growing double digits online.
Shares recently rose more than 1% in trading after hours of initially falling more than 4%.
CEO Chip Bergh told CNBC that the results for the last quarter were above the denim manufacturer’s internal expectations, and almost met the ‘best-case scenario’ that Levi laid back when the Covid pandemic hit the United States. States started hitting for the first time and disrupted many businesses.
‘We turned very hard to [direct to consumer] and especially for e-commerce, “Bergh said in a telephone interview. Our e-commerce business was profitable in the fourth quarter and profitable for the full year. “
Levi’s global digital sales, which include online sales of its merchandise at wholesale partners, accounted for 23% of fourth-quarter sales, up from 15% in the previous year.
Here’s how Levi Strauss & Co. during its fiscal fourth quarter compared to what analysts expected using Refinitiv data:
- Earnings per share: 20 cents, adjusted to 15 cents, expected
- Revenue: $ 1.39 billion versus $ 1.34 billion, expected
For the three-month period ended November 29, Levi earned $ 57 million, or 14 cents per share, compared to $ 96 million, or 23 cents per share, a year earlier. If it is not a one-time levy, it will earn 20 cents a share, which with Refinitiv data was better than the 15 cents analysts expected.
Net income fell 12% to $ 1.39 billion from $ 1.57 billion a year earlier. This was better than the analysts’ forecast of $ 1.34 billion.
Worldwide, digital sales increased by 34%, which includes sales on its partner platforms such as Amazon.
Levi said the revenue of its wholesale partners fell by 15% during the quarter, while the revenue directly to the consumer fell by 5% due to lower visits to its 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 franchise businesses, are closed.
“The recent revival of the virus underscores that the ultimate impact of the Covid-19 pandemic remains highly uncertain,” Levi said in his earnings report. “The company expects that its business … will significantly adversely affect at least the first half of 2021, and there is still the possibility of additional Covid-19 related inventory and other costs.”
Levi shares have been rising since the end of Wednesday by a little over 8% from a year ago. The company has a market capitalization of $ 8.8 billion.
Find the full press release from Levi Strauss & Co. here.