Levi’s Says Sales Fell 62% in the Second Quarter

Levi Strauss & Co reported this week that sales had fallen 62% in the second quarter and that it would be slashing 15% of its corporate workforce.

Cutting this many jobs will impact about 700 jobs and the move is in effort to cut costs during COVID-19. According to the company, the move should generate annualized savings for the company of $100 million.

Levis revealed that online sales were not enough to make up for stores being temporarily shuttered for 10 weeks amid the coronavirus pandemic. A complete recovery “will likely take some time,” CEO Chip Bergh admitted in a memo sent to employees that was obtained by CNBC.

“Although we are starting to see some green shoots, we need to continue to be cautious,” Bergh added. “There could be a second wave,” of Covid-19 cases and resulting store closures.

Roughly 90% of Levi’s stores have reopened worldwide, but traffic and sales are still lagging levels from a year ago.

For the quarter ended May 24th, San Francisco-based Levi’s reported an adjusted loss per share of 48 cents and revenue of $498 million. Revenue was $1.31 billion a year ago.

The company reported a net loss of $364 million, or 91 cents a share, compared with net income of $29
million, or earnings of 7 cents per share, a year ago.

The loss was largely due to $242 million in restructuring charges and inventory costs related to disruptions from the pandemic, the company said.

Analysts were waiting for an adjusted loss of 49 cents per share on revenue of $486 million, according to Refinitiv data.

Sales in the company’s Americas region were down 59% overall. They dropped 68% in Europe and 61% in Asia.

“Unlike a number of our peers … we took the brunt of this in one quarter,” Bergh told CNBC.

The company is not offering a 2020 outlook at this time.

Disclaimer: We have no position in Levi Strauss & Co. (NYSE: LEVI) and have not been compensated for this article.