Levi’s clothing is displayed at a Kohl’s store in San Rafael, California on April 6, 2023.
Justin Sullivan | Getty Images
Levi Strausswhich has long relied on wholesalers like Macy’s And Kohl’s To drive its business, the corporate now generates nearly half of its revenue through its own website and stores, the corporate said Wednesday in announcing first-quarter results.
In the three months ended Feb. 25, direct-to-consumer sales accounted for a record 48% of total sales at Levi’s, up from 42% in the identical period last 12 months and up 25% on a two-year basis, the retailer said.
The shift is a boon for Levi’s profits. But it raises questions on the corporate’s relationships with its wholesale partners and whether it is going to hurt those retailers as they grapple with their very own existential challenges.
Levi’s also beat Wall Street’s profit and revenue estimates and raised its full-year forecast. Shares rose as much as 10% in prolonged trading.
Here’s how the blue jeans maker performed in its first fiscal quarter in comparison with Wall Street’s expectations, based on an analyst survey by LSEG, formerly often called Refinitiv:
- Earnings per share: 26 cents adjusted versus 21 cents expected
- Revenue: $1.56 billion versus expected $1.55 billion
The company reported a net lack of $10.6 million, or 3 cents per share, within the quarter, compared with net income of $114.7 million, or 29 cents per share, within the year-ago period. Excluding one-time costs related to Levi’s restructuring, the corporate reported earnings per share of 26 cents, above Wall Street estimates.
Revenue fell to $1.56 billion, down about 8% from $1.69 billion a 12 months ago. The decline in sales was primarily on account of a shift in Levi’s wholesale orders, which boosted profits by about $100 million in the identical period last 12 months.
Levi’s still expects full-year sales to rise between 1% and three% as the corporate struggles with a slowdown in consumer spending and an uncertain economy. However, it expects profits to be higher than previously thought. The retailer now expects adjusted earnings per share between $1.17 and $1.27, up from the previous range of $1.15 to $1.25.
Analysts had expected full-year sales growth of two.4% and earnings per share of $1.21, based on LSEG.
