Levi Strauss & Co reported a weaker top line for the first quarter of FY24, which was attributed to the impact of its Russia business as well as a shift in wholesale shipments.

For the three months ended February 25, net revenues dropped 8 per cent year on year to $1.6 billion. 

Excluding the impact of the exit of the Denizen business and Russia – as well as a shift in wholesale shipments that negatively affected Q1 2024 over 2023 by approximately $100 million – net revenues would have been flat.

In the Americas, net revenues decreased 11 per cent. Adjusting for the shift in wholesale shipments and the exit of the Denizen business, both the Americas and the US were up 2 per cent.

Net revenues in Europe were down 7 per cent overall and down 5 per cent when taking the impact of the Russia business out of the equation.

Asia’s net revenues were 5 per cent on top of the 22 per cent growth in the prior year, reflecting growth across most markets.

On the bottom line, the company swung to net loss of $11 million from net income of $115 million in the prior year. Adjusted net income was $103 million compared to $135 million in Q1 2023.

However, president and CEO Michelle Gass remained optimistic and said the results beat the company’s expectations.

“The momentum in our global DTC business continues, with DTC up in all segments. Our efforts to stabilize our wholesale business are delivering results. We are on our way to transforming this company into a best-in-class DTC-first apparel retailer, setting the stage for our next phase of sustainable profitable growth,” Gass continued.

“The structural economics of our business improved in Q1 driven by significant gross margin expansion, disciplined expense controls and efficient working capital management,” added Harmit Singh, chief financial and growth officer.

The firm has raised its full-year outlook, expecting net revenues to be up 1 to 3 per cent.