Levi’s (LEVI) reports fourth quarter 2020 results and sales beat

Levi Strauss & Co. announced on Wednesday that its total holiday quarter sales fell 12%, marking an improvement from a drop of more than 20% in the previous period, weak buyer traffic in its stores having been partially offset by double-digit online growth.

Stocks recently rose more than 1% after-hours trading after initially falling more than 4%.

Chief Executive Chip Bergh told CNBC that last quarter’s results exceeded internal expectations for the denim maker, almost meeting the “best case scenario” Levi presented when the Covid pandemic began to hit the United States and to disrupt many businesses.

“We pivoted very hard to [direct to consumer] and in particular to electronic commerce, “Bergh said in a telephone interview.” Our e-commerce business was profitable in the fourth quarter and profitable throughout the year. “

Levi’s global digital sales, which include online sales of its merchandise through wholesale partners, accounted for 23% of fourth-quarter sales, up from 15% the year before.

Here’s how Levi Strauss & Co. performed in its fiscal fourth quarter compared to what analysts expected, using Refinitiv data:

• Earnings per share: 20 cents, adjusted, vs. 15 cents, expected
• Revenue: $ 1.39 billion vs. $ 1.34 billion, expected

For the three-month period ended Nov. 29, Levi earned $ 57 million, or 14 cents per share, up from $ 96 million, or 23 cents per share, a year earlier. Excluding one-time charges, he was earning 20 cents per share, which was better than the 15 cents expected by analysts, using Refinitiv data.

Net income fell 12% to $ 1.39 billion, from $ 1.57 billion a year earlier. It was better than the $ 1.34 billion forecast by analysts.

Digital sales globally grew 34%, which includes sales made on its partner platforms like Amazon.

Levi said its wholesale partners’ revenue fell 15% in the quarter, while its direct-to-consumer revenue was down 5%, due to lower visits to its stores.

As the coronavirus pandemic continues to disrupt normal business operations, the company said currently around 40% of its stores in Europe and 17% globally, including sites run by franchisees, are closed.

“The recent resurgence of the virus underlines that the ultimate impact of the Covid-19 pandemic remains very uncertain,” Levi said in his results release. “The company expects its business … to continue to be significantly affected for at least the first half of 2021, and there remains the possibility of additional inventories related to Covid-19 and other charges.”

Levi’s shares, at market close on Wednesday, were up just over 8% from a year ago. The company has a market capitalization of $ 8.8 billion.

Find the full Levi Strauss & Co. press release here.