Levi Strauss’ third-quarter revenue grew 41%
Apparel and footwear manufacturer Levi Strauss (NYSE:LEVI) has released its third-quarter 2021 financials.
Compared to last year:
- Revenue grew 41% to $ 1.5 billion.
- Operating income increased 134% to 216 million.
- Net income rose from 27 million to 193 million.
Sales recovered In the third quarter, Levi Strauss’s revenue grew across all sales channels: retail sales added 34%, wholesale – 45%, digital – 10%. Digital sales accounted for a fifth of total quarterly revenue. The most significant revenue growth was in the Americas – 52%. In Europe and Asia – by 27 and 34%. Compared to the pre-crisis 2019, sales of Levi Strauss added 3%.
During the quarter, about 1 in 10 of the company’s stores were still closed due to restrictions. However, by the beginning of October, the share of closed stores dropped to 4%. As a result, Levi Strauss predicts fourth-quarter revenue will grow 20-21% over 2020 and 6-7% over 2019. Ready for school After the easing of quarantine restrictions and the start of the new school season, the demand for casual clothes has grown.
Many manufacturers with factories in Vietnam are not ready to support such demand: another outbreak of COVID-19 in the country. For example, Nike, Columbia, Deckers, and Capri in Vietnam sew half of their clothes. Levi has no such problems: Vietnamese factories account for 4% of the company’s total production. “The supply chain is our competitive advantage. We can move products very quickly. We have diversified our production in the last 18 months,” said the head of Levi Strauss. Plus, Levi Strauss leggings and shorts are looking to enter the fast-growing and marginal sportswear market. In the report, the company announced the purchase of the Beyond Yoga brand for $ 400 million.
Levi estimates the division will add more than $ 100 million to revenue in the next fiscal year. “We had been thinking about a takeover for a long time, and the sportswear market looked attractive. There is great growth potential in this segment,” the company explained. Beyond Yoga’s revenue has doubled in the past three years.
Levi Strauss executives suggest that the new brand will help the company increase sales to women and, oddly enough, office workers: “People come back to the office, and you don’t see the suits anymore. Instead, you see people entering the office wearing casual and even sportswear.
And this is a global phenomenon. “What’s up with shares? During the day, October 6, Levi Strauss shares fell 5%. After the report, the securities rose by 3.7% to $ 25.1. Since the beginning of the year, the company’s shares have increased in price by 25%. The S&P 500 broad market index gained less over the same period – 17.9%.
