March 18, 2019, Levi Strauss & Co in San Francisco. At the flagship store, an employee is calling a customer with a shopping bag.
David Paule Maurice | Bloomberg | Getty Images
Levi Strauss & Co. Reported on Thursday that Q1 sales fell by double digits as continued store closures in Europe and a drop in foot traffic in the US due to Covid’s pandemic weighed on results.
However, denim makers have boosted their sales and profit outlook for the first half of this year, given that the global health crisis does not worsen from here. In an interview with CNBC, CFO Harmit Singh said sales are expected to return to pre-pandemic levels of 2019 by the fourth quarter.
Its share surged by more than 6% in after-hours trading.
“These results show really good evidence that we’re going from a pandemic to a stronger company,” CEO Chipberg told CNBC. “We exceed our expectations internally [and] Despite the closure of one-third of European stores throughout the quarter, it exceeded external expectations. “
Based on Refinitiv’s research, the company’s performance for the quarter ended February 28 is as follows, compared to what analysts expected.
- Earnings per share: adjusted 34 cents vs. forecast 25 cents
- Revenue: $ 1.31 billion vs. forecast $ 1.25 billion
Levi’s net income fell slightly from $ 152.7 million (37 cents per share) in the previous year to $ 142.5 million (35 cents per share). Excluding one-off costs, the company generated 34 cents per share, more than analysts predicted, according to Refinitiv.
Total revenue was $ 1.31 billion, down about 13% from $ 1.51 billion in the previous year. This was better than the $ 1.25 billion forecast by analysts.
According to retailers, sales fell by double digits year-over-year, primarily due to lower store visits during pandemics and continued store closures in some markets where Covid continues to regulate. Thing. In Europe, for example, more than 40% of Levi’s stores are currently closed, with other stores shortening business hours, the company said.
Levi’s wholesale sales fell 4% in the last quarter, improving from the previous quarter.
Direct consumer sales fell 26% as fewer customers visited Levi’s stores, especially markets that depended on tourism. According to Levi’s, this decline was partially offset by a 25% increase in sales of e-commerce owned by the company during the quarter. Total online revenue, including digital sales from wholesale partners, increased 41%.
According to Levi’s, although business trends are improving, revenue and sales are expected to continue to have a “significant negative impact” until at least the second quarter of 2021.
The company raised its earnings and profit outlook in the first half, assuming the pandemic wouldn’t worsen.
Currently, sales are expected to grow by 24% to 25% and adjusted profits are projected to range from 41 cents to 42 cents. This means that second quarter profits are between 7 and 8 cents. Analysts were looking for a nickel share earnings of 5 cents in the second quarter.
Levi’s shares have increased by almost 25% year-to-date. The company has a market capitalization of $ 10 billion.
Click here for the full Levi’s press release.
Levi’s (LEVI) reports first quarter 2021 earnings
Source link Levi’s (LEVI) reports first quarter 2021 earnings