Retail in Asia

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Levi’s Asia revenues surge 18 percent on growth across ‘almost all’ markets in the region

Levi Strauss posted a 9 percent decline in second-quarter net revenues to USD 1.3 billion, with double-digit sales growth in the denim maker’s Asian market not enough to offset declines in the U.S. and Europe.

SEE ALSO: Levi’s Asia sales up 12 percent driven by all markets outside China

The San Francisco-based company said Asia net revenues increased 18 percent on a reported basis and 27 percent on a constant-currency basis, on the back of growth across almost all markets, including strong growth in China.

In Asia, direct-to-consumer (DTC) net revenues rose 30 percent on a reported basis and 41 percent on a constant-currency basis, driven by strength in its company-operated mainline and outlet stores and e-commerce.

Asia wholesale net revenues increased 5 percent on a reported basis and 13 percent on a constant-currency basis.

In the Americas, net revenues decreased 22 percent, while Europe dropped 2 percent.

The company also swung to a net loss of USD 2 million during the quarter, compared to a net profit of USD 50 million for the same period last year.

“Our strong second-quarter DTC and international results in a challenging environment demonstrate the resilience of our business model and the health of the Levi’s brand globally,” said Chip Bergh, president and chief executive officer of Levi Strauss & Co.

“While U.S. wholesale remains pressured, we are pursuing initiatives to stabilize this business and drive market share gains. We are confident in our ability to navigate near-term headwinds and remain as optimistic as ever about the company’s future.”

Harmit Singh, chief financial and growth officer of Levi Strauss & Co added that the company achieved its second-quarter expectations across key metrics, “including significant progress on inventory, and the implementation of our U.S. ERP.”

“While we are adjusting our full year outlook, we expect second-half revenues up mid-single-digits and a low-double-digit adjusted EBIT margin as strong growth in our large DTC and International businesses continue,” said Singh.

“As wholesale stabilizes and COGS improve, our business model is uniquely positioned to generate significant financial leverage beyond 2023.”