Levi Strauss & Co., the renowned denim brand, reported a decrease in its second-quarter net revenues, amounting to $1.3 billion. The decline, which reflected a 9 percent drop on both a reported and constant-currency basis, was primarily attributed to a planned shift in wholesale shipments from the second quarter to the first quarter. This shift negatively impacted the quarter’s performance by approximately $100 million or 7 percent of net revenues.
The company’s net loss for the quarter was $2 million, while adjusted net income decreased to $15 million. Adjusted diluted earnings per share stood at 4 cents, down from 29 cents in the second quarter of the previous year.
Notably, the company experienced a 13 percent increase in DTC net revenues on a reported basis and a 14 percent increase on a constant-currency basis. This growth was primarily driven by strong performance in company-operated stores, outlets, and e-commerce platforms. E-commerce specifically saw a reported increase of 20 percent and a constant-currency increase of 21 percent, fuelled by double-digit growth across all segments.
Net revenues in the Americas declined by 22 percent on both a reported and constant-currency basis. However, DTC net revenues in the region increased by 6 percent, while wholesale net revenues declined by 33 percent.
European net revenues experienced a 2 percent decrease on both a reported and constant-currency basis. Excluding Russia, net revenues managed to increase by 1 percent on a constant-currency basis. DTC net revenues in Europe grew by 7 percent on a reported basis and 6 percent on a constant-currency basis (14 percent excluding Russia). Wholesale net revenues declined by 10 percent, reflecting cautious ordering behaviour among wholesale partners.
In Asia, Levi Strauss & Co. witnessed significant growth, with reported net revenues increasing by 18 percent and constant-currency net revenues rising by 27 percent. DTC net revenues in Asia experienced a reported increase of 30 percent and a constant-currency increase of 41 percent. Wholesale net revenues increased by 5 percent on a reported basis and 13 percent on a constant-currency basis.
Levi Strauss & Co.’s other brands, including Dockers and Beyond Yoga, had a mixed performance. Net revenues for these brands declined by 1 percent on a reported basis and 2 percent on a constant-currency basis. Beyond Yoga saw growth of 28 percent, while Dockers experienced a decline of 9 percent on a reported basis and 10 percent on a constant-currency basis. In the first half of the year, net revenues for other brands increased by 11 percent, primarily driven by an 8 percent growth in Dockers’ net revenues and a 19 percent growth in Beyond Yoga.
Considering the company’s performance, Levi Strauss & Co. adjusted its fiscal 2023 guidance. Reported net revenues are now expected to grow between 1.5 percent and 2.5 percent, compared to the previous range of 1.5 percent to 3 percent. The company also revised its adjusted diluted earnings per share to be between $1.10 and $1.20, down from the previous range of $1.30 to $1.40.