Levi Strauss posts strong Q4 results driven by higher prices and strong demand
Levi Strauss reported net revenues of $1.7 billion in Q4, up 22% compared to Q4 2020 and up 7% versus Q4 2019.
During the three-month period ending 28 November 2021, the company reported a strong gross profit margin of 57.8%, up 350 basis points from Q4 2020 and 380 basis points from Q4 2019.
In the fourth quarter of 2021, the Levi's jeans maker separated its Dockers business to provide focus and reinvigorate the brand’s growth, as well as a similar, separate structure for the newly acquired Beyond Yoga business.
Levi Strauss added that its net revenues benefited from price increases, lower promotions, and a strong demand for its jeans and jackets.
For the full year, the US denim giant reported net revenues of $5.8 billion, up 29% versus fiscal year 2020 and flat to fiscal year 2019. Net income came in at $554 million, up from $84 million in fiscal year 2020 and $456 million in FY 2019.
Looking ahead at fiscal year 2022, the company expects net revenues growth of 11% to 13% compared to fiscal year 2021, between $6.4 billion and $6.5 billion.
Commenting on the results, Chip Bergh, President and Chief Executive Officer of Levi Strauss & Co said: "We had a strong finish to 2021 and I can confidently say that we are a stronger company than ever before. Today’s results reflect robust financial performance, marked by sequential improvement through the year, despite navigating ongoing business disruption from the pandemic. Through it all, we have stayed focused on our future and our momentum continues to accelerate into 2022.
"We are well positioned for long-term, sustainable growth - our strong brand equity is driving pricing power, we’re boldly diversifying our business and continuing to expand our high margin DTC business. As good as this past year has been, I am confident the future will be even better."
Harmit Singh, Chief Financial Officer of Levi Strauss & Co added: "We achieved strong results, including multi-decade record revenues and profitability, delivering an adjusted EBIT margin for the full year of 12.4% despite heightened supply chain challenges and product costs.
"This was the result of the unique strength of our brands and our ability to leverage our pricing power to more than offset inflationary pressures while also reinvesting in our growth. Looking ahead, with the foundational work we have done to advance our growth strategies and improve our structural economics, we are highly confident in our 2022 outlook and our ability to generate even stronger results for our shareholders."
