Revenues jump at Levi’s as denim trend continues
Sales at American denim brand Levi's soared in the three months to 29 August 2021, despite several of its stores remaining closed.
Levi's reported fiscal third quarter net revenues of $1.5bn (£1.1bn), up 41% compared with the same quarter of 2020 and 3% compared with the equivalent period in 2019.
Levi's continued to experience some temporary store closures during the third quarter because of the COVID-19 pandemic. Approximately 10% of its stores were closed globally during the quarter, primarily in Asia, where third-party retail stores were also closed.
Direct-to-consumer sales increased by 34% year on year and 4% compared with the same period in 2019. Similarly, its global wholesale revenue was up 45% versus the third quarter of 2020, and 3% compared with the equivalent period in 2019.
In the same period, digital sales represented approximately 20% of total sales. The denim brand reported a gross profit of $862m (£633.7m), an increase of 49.4% compared with $577m (£424.1m) in the same quarter in the prior year.
Chip Bergh, President and Chief Executive Officer of Levi Strauss & Co, said: “We delivered a strong quarter with revenue growth versus pre-pandemic 2019 levels, despite a more difficult macro-environment than we expected.
“These results reflect the strength of the Levi's brand, improving momentum in our direct-to-consumer business and the scale and agility of our supply chain network where we have executed against macro-headwinds exceptionally well.”
It also acquired yogawear brand Beyond Yoga in August, for approximately $400m (£294m). As Levi’s enters the activewear category, the partnership will help the growing women’s category which is projected to become 50% of the total business.
“The acquisition of Beyond Yoga establishes our position in the fast growing, high-margin premium activewear market as we continue to capitalise on global casualisation trends,” added Bergh.
“Additionally, men’s yoga is a great opportunity for expansion and with our knowledge of that category, we can really help grow the business.”
While many companies in the industry are challenged with supply chain issues, Levi’s remained ahead of the problems faced by other retailers with its focus on diversified sourcing strategy. The company has already negotiated cotton pricing through spring 2022 to keep the near-term business effect of decade-high cotton prices minimal for the company.