American firm Levi Strauss & Co's revenue surges 8% in Q2 FY24

American clothing company Levi Strauss & Co has reported net revenues of $1.4 billion in the second quarter of fiscal 2024 (Q2 FY24), representing an 8 per cent increase on a reported basis and a 9 per cent increase on a constant-currency basis compared to Q2 FY23.

The operating margin improved to 1.5 per cent, up from 0.7 per cent in Q2 FY23, driven by higher net revenue and gross margin. The adjusted EBIT margin saw a significant increase of 360 basis points to 6.0 per cent from 2.4 per cent last year. Gross margin also rose by 180 basis points to 60.5 per cent from 58.7 per cent in Q2 FY23, the company said in a press release.

Net income was $18 million, a notable improvement from a net loss of $2 million in Q2 FY23. Adjusted net income was $66 million compared to $15 million in Q2 FY23. Diluted earnings per share stood at $0.04, up from a diluted loss per share of $0.00 in Q2 FY23. Adjusted diluted earnings per share increased to $0.16 from $0.04 in Q2 FY23. Selling, general, and administrative (SG&A) expenses were $795 million compared to $768 million in Q2 FY23.

Net revenues in the Americas increased by 17 per cent on a reported basis and 16 per cent on a constant-currency basis. Adjusting for the shift in wholesale shipments and the exit of the Denizen business, the Americas saw a 3 per cent increase, with the US specifically up by 2 per cent.

In Europe, net revenues decreased by 2 per cent on both a reported and constant-currency basis, showing sequential improvement from Q1 across both wholesale and direct-to-consumer (DTC) channels.

Net revenues in Asia were roughly in line with the prior year on a reported basis and up 6 per cent on a constant-currency basis, building on 27 per cent growth in the prior year on a constant-currency basis, reflecting growth across most markets.

For other brands, net revenues increased by 10 per cent on both a reported and constant-currency basis.

DTC net revenues increased by 8 per cent on a reported basis and 11 per cent on a constant-currency basis. This growth was driven by a 12 per cent increase in the U.S. and a 7 per cent increase in Europe. E-commerce revenues grew by 19 per cent on both a reported and constant-currency basis, reflecting double-digit growth across the Levi’s and Beyond Yoga brands. DTC accounted for 47 per cent of total net revenues in the second quarter.

Wholesale net revenues grew by 7 per cent on a reported basis and 8 per cent on a constant-currency basis. Adjusted global wholesale net revenues decreased by 4 per cent YoY, reflecting sequential improvement from Q1.

“We delivered another strong quarter driven by the Levi’s brand's prominence at the centre of culture, a robust pipeline of newness and innovation, and continued momentum in our global direct-to-consumer channel. Our amplified focus on women’s and denim lifestyle is delivering outsized growth and driving meaningful market share gains,” said Michelle Gass, president and CEO of Levi Strauss & Co.

Fibre2Fashion News Desk (DP)