The US clothing retailer Levi Strauss & Co. presented solid results for the first quarter of the 2022/23 financial year on Thursday. The company reported a significant drop in earnings, but it managed to beat market expectations.
In the three months ended February 26, group sales were $1.69 billion, up 6 percent from the same quarter last year. Adjusted for exchange rate changes, revenues grew by nine percent. According to its own statements, the company benefited in the first quarter from the postponement of delivery dates in the wholesale business and a sales increase of twelve percent (currency-adjusted +16 percent) in its own retail business.
The core Levi’s brand was able to increase its sales in America by seven percent (currency-adjusted +7 percent) to USD 823 million and in Asia by as much as twelve percent (currency-adjusted +22 percent) to USD 290 million. In Europe, sales fell 3 percent to $455 million, but grew 2 percent on a currency-adjusted basis. The smaller group labels Dockers and Beyond Yoga together generated sales of 121 million US dollars, surpassing the corresponding prior-year level by 24 percent (+25 percent at constant currency).
In addition to higher costs, restructuring expenses and value adjustments weighed on the result. Operating profit fell by 33 percent to 157 million US dollars compared to the same quarter last year. Adjusted for special effects, it shrank by 22 percent to 185 million US dollars. Reported net income fell 41 percent to $115 million. The analysts had previously expected an even lower surplus.
The management stuck to its forecasts for the current financial year. It continues to expect revenue to be up 1.5% to 3% to $6.3 billion to $6.4 billion and adjusted diluted earnings per share to be in the range of $1.30 to $1.40.