Employees carry shopping bags while calling customers at flagship store Levi Strauss & Co. in San Francisco, March 18, 2019.
David Paul Morris | Bloomberg | Getty Images
Levi Strauss & Co. on Thursday reported a double-digit drop in sales in the first quarter of the fiscal year due to continued store closings in Europe and a drop in foot traffic in the US due to the coronavirus outbreak. Affect the results
But the denim maker helped boost sales and profit trends in the first half, assuming the global health crisis isn̵7;t getting worse from here, CFO Harmit Singh said in an interview with CNBC that the company expects sales. It will return in 2019, the level before the outbreak by the fourth quarter.
The company’s shares rose more than 6 percent in after-hours trading.
“These results provide really good evidence that we will become a stronger company from the outbreak,” Chipberg CEO told CNBC. [and] Overcame outside expectations even though one third of our stores were closed in Europe for the entire quarter. “
Here’s how the company did in the quarter ended Feb. 28 compared to what analysts had expected from the Refinitiv survey:
- Earnings per share: 34 cents, compared to the 25 cents expected.
- Revenue: $ 1.31 billion, versus $ 1.25 billion expected.
Levi’s net income fell slightly to $ 142.5 million, or 35 cents per share, from $ 152.7 million, or 37 cents per share, last year. Excluding the one-time charge, the company earned 34 cents per share, 25 cents better than analysts had expected, according to Refinitiv.
Total revenue fell about 13 percent to $ 1.31 billion from $ 1.51 billion a year earlier. That came in better than analysts had expected $ 1.25 billion.
The retailer said a double-digit drop in sales each year was mainly due to a drop in traffic during the outbreak, as well as ongoing store closings in some of the still-active markets. For example, in Europe, more than 40 percent of Levi’s stores are currently closed, with other stores opening at reduced hours, the company said.
Levi’s wholesale revenue fell 4% in the most recent quarter, marking an improvement from the previous period.
Direct-to-consumer sales fell 26 percent as fewer customers visited Levi’s stores, and especially in a market that relies on travel.Levi’s said some of the decline was partially offset by sales. Company-owned e-commerce increased 25 percent during the quarter. Total online revenue, including digital sales from wholesale partners, increased 41%.
Although the trend in business is improving. But it is expected that earnings and sales will continue. It was “significantly affected” at least until the second quarter of 2021, Levi said.
The company adjusted both revenue and profit trends for the first half of the year assuming the epidemic would not get worse.
Sales are now projected to grow 24% to 25%, and adjusted earnings are expected to be in the range of 41 cents to 42 cents, representing revenue of 7 cents to 8 cents during the second quarter of the fiscal year. Analysts call for second-quarter results of 5 cents per share.
Levi’s shares are up nearly 25 percent year over year, with a market capitalization of $ 10 billion.
Find the full press release from Levi’s here.