The US clothing retailer Levi Strauss & Co. suffered a decline in sales and profits in the fourth quarter of the 2021/22 financial year, but was able to exceed market expectations in terms of earnings. In the current year, the denim specialist now wants to return to the course of growth.
On Wednesday night, the company said it had generated $1.59 billion in revenue for the three months ended Nov. 27. Compared to the same quarter of the previous year, this meant a decline of six percent. Adjusted for exchange rate changes, however, revenues remained stable. The clothing retailer pointed out that the closure of its own stores in Russia after the start of the war of aggression against Ukraine had a negative impact on sales development.
Fourth-quarter earnings fell short of last year’s level
Higher product costs, discounts and restructuring measures impacted earnings in the final quarter. Operating profit fell by 26 percent to 137.0 million US dollars. The reported net income shrank by almost two percent to 150.6 million US dollars (138.1 million euros), adjusted for special effects it fell by 19 percent to 136.6 million US dollars. However, analysts had expected an even more significant decline in advance.
For the full financial year, sales increased by seven percent (adjusted for currency effects +12 percent) to 6.17 billion US dollars. Reported net income was $569.1 million, up 3 percent from the prior year.
CFO Harmit Singh gains additional powers
For the current fiscal year 2022/23, the management now expects sales growth of 1.5 to 3 percent to 6.3 to 6.4 billion US dollars. Adjusted diluted earnings per share are expected to be in the range of $1.30 to $1.40, up from $1.50 a year ago.
A personnel decision is intended to help achieve the strategic goals: Chief Financial Officer Harmit Singh has been given additional powers and will operate as Chief Financial and Chief Growth Officer with immediate effect. “Harmit has been a trusted partner and an integral part of the company over the past decade,” CEO Chip Bergh said in a statement. “Over the past year, he has emerged as the key architect of our five-year growth plan that we unveiled at our Investor Day. His expanded role will allow for more immediate oversight of the implementation of our strategic actions.”