Levi Strauss (LEVI) Earnings Q2 2023: A Comprehensive Look

Levi Strauss & Co. (LEVI) reported its second quarter 2023 earnings on July 6, 2023. The company’s results were mixed, with revenue falling short of expectations but earnings beating estimates.

The blue jean seller saw bright spots, however, in its direct-to-consumer sales and China market.

Key Highlights

• Total revenue decreased 9% to $1.3 billion. This was due to a 12% decline in wholesale revenue, which was partially offset by a 14% increase in direct-to-consumer (DTC) revenue.
• Net income was $1.6 million, or $0.00 per share. This compares to net income of $49.7 million, or $0.12 per share, in the same quarter last year.
• Adjusted earnings per share were $0.04. This compares to adjusted earnings per share of $0.29 in the same quarter last year.
• The company repurchased $48 million of its own stock in the quarter.
• Levi Strauss raised its dividend by 20% to $0.12 per share.

Shares dropped more than 6% in extended trading.

What Investors Are Saying

Investors were generally disappointed with Levi Strauss’s second quarter results. The company’s revenue missed expectations, and its guidance for the full year was also below analysts’ estimates. As a result, LEVI’s stock price fell by more than 10% in the days following the earnings release.

However, some analysts believe that Levi Strauss’s results were not as bad as they seem. They point out that the company’s DTC business is growing rapidly, and that its international business is performing well. Additionally, they believe that Levi Strauss is well-positioned to benefit from the ongoing recovery in the apparel market.

Levi Strauss’s second quarter results were mixed. The company’s revenue fell short of expectations, but its earnings beat estimates. Investors were generally disappointed with the results, but some analysts believe that the company is still well-positioned for long-term growth.

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What to Watch For in the Future

Here are some of the key things to watch for in the future of Levi Strauss:

• The continued growth of its DTC business. Levi Strauss’s DTC business is growing rapidly, and it is now the company’s largest revenue driver. The company plans to continue to invest in its DTC business in order to drive further growth.
• The performance of its international business. Levi Strauss’s international business is performing well, and it is now the company’s second-largest revenue driver. The company plans to continue to expand its international business in order to capture growth opportunities in new markets.
• The overall recovery in the apparel market. The apparel market is recovering from the pandemic, and this is expected to benefit Levi Strauss. The company is well-positioned to benefit from this recovery, as it is a leading brand in the apparel industry.

Levi Strauss’s Future Plans

In addition to its strong financial performance, Levi Strauss also announced some exciting future plans during its earnings call. The company plans to invest heavily in its DTC business, expand its international business, and launch new products and marketing campaigns.

Levi Strauss is also committed to sustainability. The company plans to use 100% recycled cotton in its products by 2025, and it has set a goal of achieving carbon neutrality by 2040.

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Overall, Levi Strauss is a well-positioned company with a bright future. The company is facing some challenges, but it is also well-positioned to overcome these challenges and continue to grow in the years to come.

Here are some additional resources that you may find helpful:

• Levi Strauss & Co. (LEVI) Earnings Release: https://investors.levistrauss.com/news/financial-news/news-details/2023/Levi-Strauss–Co.-Reports-Second-Quarter-2023-Financial-Results/default.aspx
• Levi Strauss & Co. (LEVI) Analyst Ratings: https://www.tipranks.com/stocks/levi/earnings
• Levi Strauss & Co. (LEVI) Stock Price: https://finance.yahoo.com/

Here are some additional details about Levi Strauss’s second quarter results:

• Revenue by segment:
  • Wholesale: $854 million (-12%)
  • Direct-to-consumer (DTC): $446 million (+14%)
• Gross margin: 48.4% (-30 basis points)
• Operating margin: 3.7% (-290 basis points)
• Earnings per share: $0.04 (-80%)

Revenue by geography:

• Americas: $664 million (-11%)
  • United States: $493 million (-12%)
  • Canada: $60 million (-7%)
  • Latin America: $111 million (+2%)
• Europe: $336 million (-10%)
• Asia Pacific: $300 million (+1%)

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Key drivers of results:

• Weaker wholesale demand in North America: The company’s wholesale business in North America was impacted by weaker demand from its key retail partners.
• Stronger DTC growth: The company’s DTC business continued to grow rapidly, driven by increased online traffic and higher average order values.
• Higher costs: The company’s gross margin was negatively impacted by higher costs, including freight and raw materials.

Outlook:

• Revenue guidance: The company expects revenue to grow between 1.5% and 2.5% in fiscal 2023.
• Earnings per share guidance: The company expects earnings per share to be in the range of $1.10 to $1.20 in fiscal 2023.

Levi Strauss's second quarter results were mixed. The company's revenue fell short of expectations, but its earnings beat estimates. Investors were generally disappointed with the results, but some analysts believe that the company is still well-positioned for long-term growth.

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