When adjusted for the $15 million impact of the Denizen business exit, net revenues increased by 1 per cent on a reported basis and by 3 per cent in constant currency. The Levi’s brand saw a 5 per cent global growth, the company said in a media release.

In terms of regional performance, the Americas saw a 1 per cent decline in net revenues on a reported basis but remained flat in constant currency. Adjusting for the Denizen exit, the Americas recorded a 2 per cent increase. Europe posted a 6 per cent rise in net revenues on a reported basis and 7 per cent in constant currency, with positive growth across most markets and channels. Asia’s net revenues were stable year-on-year in reported terms but up by 4 per cent in constant currency. Other brands experienced a 7 per cent decline in net revenues on a reported basis, with Dockers dropping by 15 per cent, while Beyond Yoga surged by 19 per cent.

Direct-to-Consumer (DTC) revenues grew by 10 per cent on a reported basis and by 12 per cent in constant currency, driven by strong growth in the US (12 per cent) and Europe (9 per cent). E-commerce revenues also grew by 16 per cent, contributing to DTC accounting for 44 per cent of total net revenues. However, wholesale revenues declined by 6 per cent on a reported basis and by 5 per cent in constant currency.

Levi Strauss & Co.’s operating margin decreased slightly to 2.0 per cent from 2.3 per cent in Q3 2023, reflecting an impairment charge of $111 million related to the Beyond Yoga acquisition. However, adjusted EBIT margin improved by 250 basis points to 11.6 per cent, primarily due to higher gross margins. Gross margin saw a 440-basis-point increase to 60 per cent, benefitting from lower product costs and a favourable channel and brand mix. Selling, general and administrative (SG&A) expenses rose to $766 million, while adjusted SG&A was up by 4.8 per cent.

Interest and other expenses dropped significantly to $11 million from $38 million in Q3 2023. The company’s net income increased to $21 million, compared to $10 million in the same period last year, while adjusted net income reached $132 million, up from $112 million. Diluted earnings per share stood at $0.05, with adjusted diluted earnings per share at $0.33, the release added.

As of August 25, 2024, Levi Strauss & Co. reported cash and cash equivalents of $577 million and total liquidity of approximately $1.3 billion. Total inventories also decreased by 7 per cent.

“The underlying fundamentals of our business are getting stronger, driven by the Levi’s brand, which grew 5 per cent globally in Q3, a significant acceleration from H1 and the highest revenue growth in two years. We are making progress against our strategic priorities, including double-digit growth in our direct-to-consumer business, continued positive performance in the US, and Europe inflecting to growth,” said Michelle Gass, president and CEO of Levi Strauss & Co. “Looking to Q4 and beyond, we will amplify our focus on the Levi’s brand, exemplified by our new campaign with Beyoncé and an innovative product pipeline designed to build momentum with our fans around the world.”

“We delivered significant margin expansion and double-digit adjusted diluted EPS growth in Q3,” said Harmit Singh, chief financial and growth officer of Levi Strauss & Co. “Based on the continued strength of the Levi’s brand, we expect sequential progression to continue into Q4 as we accelerate revenue and profitability. We are also taking decisive actions to address the areas where we’ve underperformed, including our decision to evaluate strategic alternatives for Dockers. We remain confident in our ability to drive long-term shareholder value.”

Fibre2Fashion News Desk (KD)