Levis Tops Earnings and Sales Expectations Despite Sales Falling 12% in Q4

Levi Strauss & Co. reported their holiday quarter earnings that revealed sales falling 12%, despite online gains. Earnings and sales still topped analysts’ expectations.

In the year ago quarter sales had dropped over 20% so this was an improvement.

The company’s global digital sales, which include the online sales of its merchandise at wholesale partners, made up 23% of fourth-quarter sales. This is up from 15% in the prior-year period.

The company’s Chief Executive Chip Bergh told CNBC that the results for the latest quarter topped the denim maker’s internal expectations. They almost met the “best-case scenario” that Levi laid out back when the Covid pandemic first started to hit the United States.

“We pivoted very hard to [direct to consumer] and especially to e-commerce,” Bergh said in the interview. “Our e-commerce business was profitable in the fourth quarter, and profitable for the full year.”

For the fourth quarter, the company reported earnings per share of 20 cents, adjusted, vs. 15 cents, expected. Revenue was $1.39 billion vs. $1.34 billion, expected.

For the three-month period ended Nov. 29, Levi earned $57 million, or 14 cents per share, compared with $96 million, or 23 cents per share, in the year ago quarter. Excluding one-time charges, it earned 20 cents per share, which was better than the 15 cents expected by analysts, using Refinitiv data.

Net revenue fell 12% to $1.39 billion from $1.57 billion a year earlier. Analysts had expected $1.34 billion. Digital sales globally were up 34%.

“The recent resurgence of the virus underscores that the ultimate impact of the Covid-19 pandemic remains highly uncertain,” Levi said in the release. “The company expects that its business … will continue to be significantly adversely impacted for at least the first half of 2021, and there remains the possibility of additional Covid-19 related inventory and other charges.”

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.