Levi Strauss & Co., one of the world’s largest brand-name apparel companies and a global leader in jeanswear, has announced financial results for the first quarter ended February 26, 2017. During the period under review, the fashion retailer’s net revenue grew 4 per cent on a reported basis and five per cent excluding US $ 10 million in unfavourable currency translation effects.
On a reported basis, direct-to-consumer revenues grew 10 per cent on performance and expansion of the retail network, as well as ecommerce growth. Wholesale revenues grew two per cent primarily reflecting growth in Europe. Gross margin for the first quarter was 51.2 per cent of revenues compared with 53.0 per cent in the same quarter of fiscal 2016, reflecting an increase in sales allowances, unfavourable transactional impact of currency and slightly higher product costs. These factors were partially offset by the margin benefit from growth in company operated retail in Europe and Americas.
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“Despite the on-going challenges in the industry, I am pleased that we delivered 5 per cent currency-neutral growth over a strong Q1 last year,” said Chip Bergh, President and CEO, adding, “We were able to deliver these solid results despite a declining U.S. wholesale business, because of the breadth of our portfolio. Specifically, we grew in all three regions, with particularly outstanding results in Europe; double digit growth in our direct-to-consumer business; and double digit growth on women’s and tops.”
Operating income margin for the first quarter was ten per cent compared with eleven per cent in the same quarter of fiscal 2016, primarily reflecting lower gross margins. The company had 51 more company-operated stores at the end of the first quarter of 2017 than it did at the end of the first quarter of 2016.
