Levi Strauss reported revenues of USD 1.5 billion for the third quarter on a reported basis, consistent with the prior year, with revenues held up by the U.S. denim brand’s Asia market.
The San Francisco-based company said Asia net revenues increased 12 percent on a reported basis and 18 percent on a constant-currency basis, reflecting growth across almost all markets in the region, including strong growth in China.
By channel, Asia direct-to-consumer net revenues rose 15 percent on a reported basis and 23 percent on a constant-currency basis, driven by strength in company-operated mainline and outlet stores and e-commerce.
Asia wholesale net revenues increased 8 percent on a reported basis and 13 percent on a constant-currency basis, said the American brand.
“In the third quarter, we delivered double-digit growth in our direct-to-consumer business, driven by strong comp-store gains, which helped offset continued softness in the wholesale channel, primarily in the U.S.,” said Chip Bergh, president and chief executive officer of Levi Strauss & Co.
“We are focused on the levers within our control and the actions we took in the third quarter are beginning to drive improvements in U.S. wholesale trends. As we look longer term, we remain confident in our ability to achieve our goals given the global strength of the Levi’s brand, the momentum in our direct-to-consumer business globally, and the exceptional growth potential of our product portfolio and our international business.”
For the three months ending August 27, net income was USD 10 million, compared to net income of USD 173 million in the prior-year quarter.
“We delivered Adjusted EBIT and Adjusted diluted EPS in line with our expectations while navigating a challenging operating environment,” said Harmit Singh, chief financial and growth officer of Levi Strauss & Co.
“While we saw sequential improvement in the business across the company as we moved through Q3 with both July and August up versus prior year, given the ongoing uncertainty in the macro environment, we are taking a cautious approach to our outlook for the fourth quarter. As we accelerate our transition to a DTC-led company, we have commenced an initiative to review our operating model and cost structure that should drive agility and material cost savings beginning in 2024.”
Levi’s has been making inroads in the Asia market, most recently with the appointment of K-pop girl group, NewJeans, as brand ambassadors in March this year.