Levi's

  • Demin   jean maker Levi Strauss & Co. announced results for the first quarter of fiscal 2022 which   beat Wall Street forecasts on the top and bottom line.

  • The company managed to pass price increases onto customers and   increased sales volumes of t-shirts and jeans in the period.

  • Revenue was up 22% y/y to $1.59 billion (26% on a constant currency   basis), topping estimates of $1.55 billion. Levi’s took a knock from the   temporary suspension of its Russian operations, which comprise around 2% of   total sales. It also took a $60 million hit to total sales as a result of   supply chain constraints. Sales jumped 26% y/y in the Americas, 13% y/y in   Europe, and grew 11% y/y in Asia..

  • The direct to customer (DTC) strategy (which Nike has also   leaned-into in recent years) saw Levi’s DTC net revenues increase 35%, driven   by both company-operated stores and e-commerce. As a percentage of first   quarter company net revenues, sales from DTC stores and e-commerce comprised   30% and 9%, respectively, for a total of 39%. Wholesale net revenues   increased 15% reflecting strong demand for the Levi's brand globally.

  • · Gross profit increased 24% y/y to $944 million, with the gross   margin improving to 59.3% from 58.2%. Net income was up 37% y/y to $196   million, or 48 cents per share. Cash and cash equivalents totaled $678   million at the end of the first quarter, with net debt of $248 million. Free Cash   Flow (FCF) was negative at the end of the period due to share buybacks,   increased capex and higher dividends.

  • Levi’s reaffirmed its guidance for fiscal 2022 as it has not yet seen consumers trading down for less expensive apparel. It expects revenue growth of 11% to 13% y/y, to between $6.4 billion and $6.5 billion. And Adjusted diluted EPS of $1.50-to-$1.56.

Levi's