Levi Strauss beats Q4 estimates despite drop in revenue, profit
Levi Strauss was upbeat on its 2023 outlook Thursday as its fourth quarter results beat analysts’ estimates.
The US denim giant reported 6 per cent drop in revenue in the quarter ended November 27 as growth in its direct-to-consumer (DTC) channel was offset by a drop in wholesale.
Fourth-quarter revenue at the US denim giant was flat on a constant currency basis.
That came as the company’s net income dropped slightly to 151 million dollars from 153 million dollars a year earlier.
DTC revenue was down 2 percent in the period, but up 6 per cent on a constant-currency basis as strong growth in company-operated stores in the Americas and Asia offset a drop in Europe primarily due to store closures in Russia. Excluding Russia, constant-currency DTC revenue was up 10 per cent.
Meanwhile, wholesale revenue fell 8 per cent on a reported basis, or 4 per Vcent at constant currencies.
And as shoppers returned to physical stores following the end of years of on-and-off lockdown restrictions, global digital net revenue was down 7 per cent, but still approximately 29 per cent above pre-pandemic levels.
Full-year revenue, profits grow
For the full year, revenue of 6.2 billion dollars was up 7 per cent on a reported basis and up 12 per cent on a constant-currency basis, while net income widened to $569 million from $554 million.
Based on its latest results, the company now expects FY23 revenue of between $6.3 billion and $6.4 billion, which would represent reported revenue growth of between 1.5 per cent and 3 per cent.
It expects adjusted diluted earnings per share of between $1.30 and $1.40.
CEO and President Chip Bergh told investors, “In 2022, we delivered strong, profitable growth as well as significant market share expansion, demonstrating the enduring strength of our brands, the diversity of our business and our team’s focused execution of our strategic plan.”
He added, “Our high margin DTC business is delivering exceptional results and our diversification efforts provide additional growth drivers for sustainable long-term growth.”
Bergh also announced that the role of Harmit Singh, currently Levi Strauss’ CFO, has been expanded to Chief Financial and Growth Officer, effective immediately.
Bergh said,“Harmit has been a trusted partner and an integral part of this company for the past ten years. Last year, he served as the key architect behind the five-year growth plan laid out at our Investor Day, and his expanded role will enable more direct control to execute against our strategic initiatives.”
