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Levi Strauss reports 61% increase in Q1 operating income

Levi’s Store
Image Courtesy: lipstiq.com

Growth across regions and channels helped Levi Strauss & Co., one of the world’s largest brand-name apparel companies and a global leader in jeanswear, to report a 22 per cent increase in net revenue on a reported basis in the first quarter of this fiscal.

“Incremental investments made in marketing and right strategies in place helped the company to continue growth trends that it reported in the back half of last year,” Chip Bergh, President and Chief Executive Officer, Levi Strauss & Co.

Notably, in America, Europe and Asia excluding favourable currency effects of US $ 6 million, US $ 39 million and US $ 10 million, respectively, net revenues grew by 13, 30 and 5 per cent.

Performance and expansion of the retail network, as well as e-commerce growth, helped the fashion retailer to note a 24 per cent increase in direct-to-consumer revenues on a reported basis.

Gross margin during the quarter under review was 54.9 per cent of revenues on a reported basis as compared to 51.2 per cent in the corresponding period of last fiscal.

The jeanswear brand reported a 61 per cent increase in operating income to US $ 174 million and 13 per cent increase in operating margin. However, the enactment of the 2017 Tax Cuts and Jobs Act resulted in decline in net income of US $ 79 million.

Adjusted net income in the reporting quarter went up almost by twofold from US $ 60 million last year to US $ 117 million in the current reporting quarter.

“More diversified portfolio and direct-to-consumer expansion are paying off,” added Chip Bergh.

In view of results witnessed, the company has raised its growth guidance to 6 to 8 per cent range for the full year.